AND GET DEBTFREE - Debt...
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www.debtfreedigi.co.za South Africa’s debt counselling magazine KEEP CALM AND GET DEBTFREE January 2013
Transcript of AND GET DEBTFREE - Debt...
www.debtfreedigi.co.za
South Africa’s debt counselling magazine
KEEPCALM
AND
GETDEBTFREE
January 2013
THE DEBT COUNSELLING INDUSTRY
Professional Indemnity - [email protected] Cover - [email protected]
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www.thedci.co.za
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consumer advise for debt solutions.
DEBT COUNSELLING EXPLAINED
Debt Counselling is a process which was promulgated into law back in 2006. The Dept. of Trade & Industry conducted in-depth research to determine the causes of over indebtedness, reckless lending and better ways of dealing with debt. A decision was taken that Usuary Act and the Credit Agreement Act be withdrawn and be replaced with the new National Credit Act. The National Credit Regulator was the industry body tasked to regulate the entire credit market ie. Register Credit Bureaux, Credit Providers, Debt Counsellors and most importantly to ensure that they all conform and comply to the NCA. Debt review is part of the NCA in section 86 which allows a consumer with credit agreements with registered credit providers to apply for the restructuring of his/her accounts in an effort to alleviate the danger of having an impaired record, repossession of assets and still ensuring that debt obligation is fulfilled by the consumer. Once a consumer has consulted with a DC to discuss his/her financial status, a determination by the DC whether or not the consumer is over indebted. An over indebted
consumer will then formally apply by filling in application form through the DC disclosing his/her financial position. The DC will conduct income and expenditure assessment , propose new repayment instalments and terms to the consumer’s creditors. The DC will then refer the debt review application to a Magistrate to grant an order. Should all negotiations satisfy the court , an order will be granted and formal restructuring of all accounts will be finalised.
Required documents for the application are normally an ID Copy, 2 months bank statement, copy of credit report (the DC can help you get this) and Proof of Income. It is advisable that when one notices a negative imbalance in income and expenditure or if you start skipping or short paying accounts, that you immediately consult with a DC to seek a solution and recommend available remedies i.e revisiting your Budget , making adjustments in your life and possibly applying for Debt Review to safeguard your assets.
Debtfree DIGI asked Debt Counsellor Octavia Hlatshwayo of Mzansi Debt Counselling to help explain the debt review or debt counselling process.
Debt review and distribution software.Proud Software provider to DC Partner, Payment Distribution Agency.
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Debt Wise Solutions
Administrators of the Debt Counselling Application Process
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C O N T E N T S
07 Editors notes Our Editor Zak King Speak his mind about what 2013 could hold for the industry.
09 News All the latests events making headlines
14 You stole my money
18 Trillion rand coin?
20 Living on Less Aircon vs open windows
22 Reduction in school fees
25 Announcement board
28 Debt counsellor profile Octavia Hlatshwayo
30 Service Directory
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The end of the year came and went in a blur. You hardly had time to make a few resolutions before so much time had passed you had already broken them. Suddenly January is almost over. Wow, when did that happen?
While things have been relatively quiet on the debt counselling news front, business has been surprisingly hectic for Debt Counsellors so far this month. Many firms are reporting higher than ever numbers of consumers reaching out for help with their debt. This is not such a bad thing. Getting help is the first step on the road to financial rehabilitation. More rehabilitated consumers is better for the economy.
So many consumers await until their debt is totally out of control before looking for help. It could be that more consumers are taking their debt serious and realising that sticking your head in the sand or borrowing from one creditor to pay another is not the best way to go. 2013 might just turn out to be ‘the year of the Debt Counsellor’. This months issue discusses one of the phrases that all Debt Counsellors hate to hear :”you stole my money”. Could SA mint a Trillion Rand coin like they were talking
about doing in the US? Check out the article and see how that would work. We also look at advise for cash strapped parents in regard to asking their school for a reduction in school fees. That’s in our Living on Less section along with some tips and bargains.
So before you go and break all your resolutions we hope that 2013 turns out to be a great year for all our readers and that this year you manage to take some big steps toward being debt free.
EDITOR’S NOTE
Debt Review Software by
Bitech is recognised as the leading Debt Counsellor software system supplier.
Simplicity is rich in functionality and caters for all Debt Counsellor requirements e�ortlessly.
Simplicity is leading edge technology and Bitech stay at the forefront of development - we continue to lead the way!
The Simplicity system is fully integrated with Hyphen PDA, which provides you, the Debt Counsellor, with an uninterrupted and e�cient service with no manual intervention and in total control.
Some features of the Simplicity system are completely unique unique, amongst others is the ability to create customised legal documentation instantaneously.
Bitech prides itself on its after sales service and the support it provides to Debt Counsellors - this is as important as the excellence of the Simplicity product!
p d a
Hyphen Technology (Pty) Limited is a member of the FirstRand Group
Hyphen PDA is a division of Hyphen Technology (Pty) Limited, which is wholly-owned by the FirstRand Group - �nancial soundness is important when considering a PDA!
Hyphen PDA is at the top of its game and is unrivalled in the collections and payment space.
Hyphen PDA essentially operates with the use of banking systems (iSeries mainframe computers) and the PDA and Payments Engine are fully integrated - as a result you will seldom, if ever, query the status of your collections or payments.
The reports generated are everything a Debt Counsellor will need to manage the business - reporting is immediate, current and always available.
27(0)16 987 5004/27(0)16 987 5006/27(0)16 987 2369
Contact Bitech
www.bitechsystems.hypermart.net
27(0)11 303 0060 extension 2
Contact Hyphen
www.hyphen.co.za
Debt Review Software by
Bitech is recognised as the leading Debt Counsellor software system supplier.
Simplicity is rich in functionality and caters for all Debt Counsellor requirements e�ortlessly.
Simplicity is leading edge technology and Bitech stay at the forefront of development - we continue to lead the way!
The Simplicity system is fully integrated with Hyphen PDA, which provides you, the Debt Counsellor, with an uninterrupted and e�cient service with no manual intervention and in total control.
Some features of the Simplicity system are completely unique unique, amongst others is the ability to create customised legal documentation instantaneously.
Bitech prides itself on its after sales service and the support it provides to Debt Counsellors - this is as important as the excellence of the Simplicity product!
p d a
Hyphen Technology (Pty) Limited is a member of the FirstRand Group
Hyphen PDA is a division of Hyphen Technology (Pty) Limited, which is wholly-owned by the FirstRand Group - �nancial soundness is important when considering a PDA!
Hyphen PDA is at the top of its game and is unrivalled in the collections and payment space.
Hyphen PDA essentially operates with the use of banking systems (iSeries mainframe computers) and the PDA and Payments Engine are fully integrated - as a result you will seldom, if ever, query the status of your collections or payments.
The reports generated are everything a Debt Counsellor will need to manage the business - reporting is immediate, current and always available.
27(0)16 987 5004/27(0)16 987 5006/27(0)16 987 2369
Contact Bitech
www.bitechsystems.hypermart.net
27(0)11 303 0060 extension 2
Contact Hyphen
www.hyphen.co.za
Simplici ty
INDUSTRY CONSUMER
NEWS FLASHFor daily debt counselling news in 3 minutes or less visit www.debtfreedigi.co.za
NCR HAVE NOT APPOINTED CAPITAL DATA AS A PDA In a recent Circular the NCR have announced that...the National Credit Regulator (“the NCR”) has not accredited Capital Software as a Payment Distribution Agency (PDA), and that it has not requested Capital Software to conduct any market research regarding the credit industry codes of conduct on its behalf. The NCR has to date accredited four Payment Distribution Agencies to collect and distribute debt review funds on behalf of consumers namely: National Payment Distribution Agency; Consumer Protection Excellence; Hyphen Technology;and DC Partners. Debt counsellors are advised and requested to ensure that collection and distribution of debt review funds are done by these accredited PDAs. Failure to do so will be construed as non compliance to the conditions of registration.
2013 STARTS WITH A BANGThough the month of January is only half way through, Debt Counselling firms are reporting increased numbers of applications for help this year compared to last year.This is no wonder as country wide indebtedness levels have grown. Consumers have struggled to curb spending and have rather turned to loaning money to maintain their lifestyle choices. As the “average” South African takes on more debt they bring themselves closer
to financial disaster. Investec economist Annabel Bishop reports that the “average” SA household now has 31,8% more unsecured debt than a year ago. Neil Roets, CEO of the debt counselling firm Debt Rescue says that this January there had been more than double the number of deeply indebted individuals applying for relief through the debt review process compared to last year. TheDCI web portal also report higher than normal figures. With “non stop” enquiries thus far this year.
DCASA REASSURE MEMBERSThe Debt Counsellors Association of South Africa have recently been the focus of some attention as their status as the leading Debt Counsellor association has come under threat with the NCR intent to withdraw it’s recognition of DCASA in terms of the industry code of conduct for Debt Counsellors. In a statement to members and the public DCASA have said :’ DCASA has been part of the positive industry collaborations since 2007 and has delivered many creative solutions to Debt Counsellors and the debt review industry to streamline the statutory debt review process...On 21 November 2012 the NCR threw a curve ball when they issued Circular 11. The cryptic nature of the circular made it impossible to understand the reasons, purpose and future vision of debt review...DCASA is a member of DRAC who engaged with the NCR in order to
NEWS CONT.
understand the Circular and to seek possible solutions. This process is still ongoing. DCASA have said that if it is the intention [of the NCR] to remove the old 2009 Task Team Agreement this will increase systemic risks in the credit industry and will take debt review back to the chaotic times experienced prior to the implementation of the Task Team Agreement. ... The policy of constructive engagement to deliver result is the main reason why so many DCASA members have contacted DCASA during the last month to express confidence and appreciation...Based on economic realities more Consumers will need assistance in 2013 and DCASA members are prepared and ready to assist. For them it is business as usual.’
DEBT COUNSELLOR ASSOCIA-TIONS SPEAK OUT AGAINST THE NDMA, DCASA AND BAD PRESS FOR DEBT REVIEWVarious Debt Counsellor representative bodies have spoken out in support of the NCR and against what they say are recent slanted press releases about the NCR’s withdrawal of support for the industry codes of conduct: In a statement called “Debt Counselling Industry Strikes Back At “Interested Parties” and Press Puppets” They said that “The Debt Counselling Industry has united on all fronts to back the NCR’s intention to withdraw the codes and recognition from the NDMA, DCASA, PDASA and the Credit Ombud” . Industry associations and activists which include the Alliance of Professional Debt Counsellors (AllProDC), the Black Debt Counsellors Forum (BDCF), Debt Counselling Union (DCU) and the Debt Counselling Industry portal (the DCI), have united in support of the NCR and
their findings. The Alliance of Professional Debt Counsellors (AllProDC) has said that “Under new management, the NCR is seen to be reclaiming its statutory responsibilities, which includes keeping all interested parties such as debt counsellors, credit providers and consumers at arm’s length and to re-instate its jurisdiction over the debt review process and credit industry”. They feel that for years this industry has been” manipulated by certain Association’s and Bodies...” .The BDCF states, “we place on record that the negative publicity is a deliberate attempt to undermine legislative gains of our parliamentary system and negative publicity jeopardizes the opportunities and legal rights of the consumer to the detriment of the South African economy.” Adding it’s voice the relatively new Debt Counselling Union is of the opinion that “several sweeping statements have been made by DCASA, the NDMA and the press that are neither justified, nor substantiated.” All these associations concur that the “interested parties were not consumer driven but rather driven by money and power. They have attempted to deliberately mislead and hoodwink the public through misrepresentation in the press and have given deceptive information in an attempt to muddy the waters of the debt counselling industry.”The group of Counsellors point to Gala Lunches held in Cape Town, Durban and Gauteng” whereby their attempt to entice a handful of reporters with false and misleading information has now led to the recent blasts of false reports. Certain reporters seem to be unusually influenced by the parties in question. They have failed to report objectively and have failed to correct mistakes that have been brought to their attention for many months. It seems as though this has been a deliberate smear
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campaign against the NCR, their findings and any activists who have stood up against BASA, the NDMA or DCASA’s tactics.” The BDCF notes “with disappointment the lack of impartiality the media orchestrates in support of shooting down successful legislation such as the NCA and that negative reporting is tantamount to irresponsible journalism.” “It is the opinion of the DCU that the NCR made the correct decision with regard to the codes.” “Credit providers would best serve their interests by adhering to the NCA instead of holding themselves to be above the law” says the All Pro DC. Deborah Solomon of theDCI agrees by stating that “five years on, the banks have only ever window dressed the debt counselling process and are still yet to embrace the idea and the law.” She says those speaking out in favour of the NCR’s announcement “are now the voice of this industry and represent more than 85% of all practicing Debt Counsellors.” She goes further to say:” Our joint recommendation, on the alternative solution that these interested parties seek, would be to get the banks to start respecting, applying and abiding by the law. This simple first step would solve at least 80% of all industry problems.”
BASA RENEGE ON THEIR WORD?A short time ago there was a large upheaval about the situation in Marakana. In typical fashion the banks (BASA) quickly made promises it now seems they do not intend to keep. At the time the issues surrounding garnishee orders came to the fore and after a lot of media focus on the abuses and inaccuracies of the system BASA issued a statement saying they would not make use of these in the future.
African Bank & Capitec have now come out and admitted to their intent to continue using this system until someone shows them something better. In meetings with the National Treasury they have only agreed to start talks and run some focus groups and studies about other options but they have admitted to their intent to continue using these in the meantime. The National Treasury are not impressed. The Treasury’s chief director for Financial Sector Development, Ingrid Goodspeed, told the media that the BASA statement was very clear in its wording in that signatories had committed not to use garnishee orders at all. Now they are going back on their word. It seems that this may once again simply have been a piece of media manipulation on the part of BASA members and that once again BASA have made promises it’s members don’t intend to keep. It will now probably be up to various outside parties to try force BASA to keep their word.
Daily news items on Debtfree DIGI. The news in 3 min or less. www.debtfreedigi.co.za
PAGE 18LIVING ON LESSReduced School Fees
NEXT PAGE 12YOU STOLE MY
MONEY
”You stole my money”There are few phrases that a Debt Counsellor ever wants to hear less than this particular unfounded accusation. It really cuts a Debt Counsellor to the heart when a consumer, that they have been helping, suddenly turns around and says these painful words. Unfortunately it seems that almost every Debt Counsellor in the country has faced this accusation at one stage or another.
Why do some consumers feel this way and what can Debt Counsellors do to avoid consumers coming to this conclusion?It must be said that many years ago their were one or two examples of unscrupulous so
called Debt Counsellors who took money from consumers and then did not deliver a service to consumers. This lead to them being removed from the profession and such occurrences have been rare since. The debt counselling field is now full of qualified professionals with lots of experience.
Why do consumers make this claim?Mainly this accusation is made when consumers find a discrepancy between what they have been paying and what a creditor tells them is their balance. In some cases consumers have been fed this story by devious collection agents or slanderous creditors. Also many consumers
CONSUMER
think that Debt Counsellors actually handle their money somehow.
How to avoid this accusationIt is important to educate consumers who enter the process to some of the challenges that exist. First off, if the Debt Counsellor recommends that the consumer make use of a Payment Distribution Agency to handle the money side of things then it needs to be clearly stated to the consumer that the Debt Counsellor does not ever touch the consumers money. This point cannot be over stressed. Debt Counsellors create the plan and the PDA make payments. Due to poor service delivery by PDA’s problems can arise and Debt Counsellors should not be shy to help consumers take the matter up with the NCR and to take legal action under the Consumer Protection Act against these service providers.
Consumers should also be made aware of the inadequacies of most credit providers software in showing debt review related matters. Consumers need to be warned that many creditors including the large banks are very bad at allocating funds from the PDA to the right accounts (for some weird reason). This results in discrepancies between PDA statements and creditor statements. These discrepancies should be detected as early as possible. If a creditor does not provide a monthly statement to the consumer the consumer should complain. Further once a consumer has their debt restructuring Court Order then 2 weeks after the Creditor has been served notice of the Court Order the consumer should go draw a statement to ensure that the creditor is complying with the Order. If not the matter should be taken further as the creditor
may be in contempt of the order. Debt Counsellors are neutral parties in the debt review process. They do not favour consumers nor any particular creditor. They draft proposals to court and allow a magistrate to restructure the debt. They facilitate the instructions as per the court order to a Payment Distribution Agency and do not handle funds. Most spend many hours trying to help creditors see the benefit of accepting the plan and capturing correct balances and account numbers. They appear at court and help consumers with good budgeting advice and counsel at a tough time in their lives. When a consumer suddenly turns around after all this hard work and says: “ You stole my money”, it hurts. So Debt Counsellors make sure your clients know who handles their money and consumers learn about the process and check on your creditors to ensure that they are doing their part. Don’t believe a total stranger (from a call centre) who claims to be from a creditor and makes unfounded accusations over your Debt Counsellor who has been there for you for months and years. Learn all the facts before making such hurtful claims.Do not give a person claiming to be a Debt Counsellor money without having visited their office and seeing their certificate from the NCR displayed. Make sure you are able to contact their offices via phone. Debt Counsellors should have a office land line and not just a Mobile number. Check on theDCI website or on the NCR to ensure they are registered. Some consumers choose to rather deal with Debt Counsellors who use Payment Distribution Agencies and don’t handle funds directly. If asked to hand over funds on the first visit beware!
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