Debtfree South Africa’s debt counselling magazine
AUGUST 2010 www.debtcounsellingsa.co.za
Editor
First off, we would like to welcome our approximately 2000 new readers this month. Welcome to the Debtfree DIGI family. We hope that you too, enjoy staying current with trends and developments in the debt review industry. With the NCR Task Team releasing its report, DC’s country-wide have been talking about where the industry is heading. If you have not had a chance to read through the report yourself then feel free to have a look at our “highlights” article.
Contents 02
Editors notes
03
Decoding the jargon
06
Get... out of your clothes
08
Before Complaining
10
NCR Task Team Report
16
Legal Precedents
18
ABSA Debt Review
20
News Flash
22
Service directory
If you are an attorney or a DC who likes to stay current with the ever shifting legal aspects of debt review, then have a look at legal guru Brett Carnegie’s comments on recent legal precedents which you may find helpful next time you are in court. Finding it expensive to maintain your wardrobe? Maybe you can pick up a trick or two in our article “get more wear out of your clothes”. Also in this issue we welcome DRS to our service directory (in force) and hope you will enjoy our news, funny stories and more.
Editor
CONSUMER
Decoding the jargon Sequestration? What is it? Sequestration is a mechanism for dealing with insolvency. Simply put a person is insolvent when their liabilities exceed their assets. When one is insolvent in South Africa, you can apply to Court to be declared “legaly insolvent.” You may be more familiar with the term “liquidated” or “put into liquidation”. This applies to a Company, Close Corporation or a Trust. In the case of an individual the term used is “sequestration” the better known, American term is “Bankruptcy”. This is not as bad as it once was and may be a process that can permenantly relieve a person of their debts.
to allow creditors to oppose the application (if they so desire). On the date of the hearing the Provisional order is made final. At this point the individual is now “sequestrated”. A trustee or curator is appointed by the Master of the Court and they are tasked with selling the assets and paying the creditors (and reporting etc). Once the creditors are paid from the available funds that the curator has procured (from things like asset sales etc) any outstanding balances are written off entirely.
What are the requirements? How does the process work? There are two types of creditors: preferential First a provisional application is made to the and concurrent. “Preferential creditors” are Court and a provisional order will be granted. mostly the banks (who you have bonds etc The matter is generally postponed for a month with), and the other types of creditors are “concurrent”. It is necessary to show the Court that if your assets are sold the preferential Sequestration, in simplest creditors will be paid in full and the concurrent terms is a mechanism for creditors a minimum of 20c in the Rand. However that is a very simplistic explaination dealing with insolvency, it is generally best to speak to an expert about much like Liquidation (for the calculations.
companies) or Bankruptcy as they call it in the United States
A person with no assets can also sequestrate, but he has to pay 20c in the Rand (in cash) to the Court toward all debts.
An example of how it works: When a house is sold on an insolvency auction, the first money goes to the bank, (bond) and the balance (if any) gets distributed amongst the concurrent creditors. If for example the bond is R500 000 and the concurrent creditors are R100 000 and the house only sells for R400 000, then the bank gets R400 000, it must write the balance of R100 000 off and the other creditors must all write off the debt owing to them. No creditor can ever claim payment for that debt again. If the house sold for R550 000 then R50 000 would go to the concurrent creditors after settling the bond.
The consumer must contact the credit bureau concerned to raise an objection or lodge a complaint. The bureau has 20 business days in which to resolve the issue. If the bureau is unable to resolve the issue, the consumer should refer the matter to the Credit Information Ombudsman
The major advantage of course is that as soon as the final order is granted a person is “sequestrated� and is totally free from debt. The creditors (any and all past creditors) can no longer try recover funds from the individual. A hidden benefit is often that a sequested person can stay in their property until it is sold, which could be anything from 4 – 6 months (or more) without paying any debt repayment - meaning further possible savings to help get the consumer back on their feet. Below are some questions often asked: Does this mean I can never use credit again? In South Africa a person can rehabilitate after four years and life then gets back to normal, debt free (this is done at a court level) this enables him/her to start a new life to get back on his/her feet without the burden of having to pay off debt indefinately.
What about running or starting a new business? During the period of sequestration, it is possible to enter into debt, start a business or buy assets, with the permission of the curator.
What about my furnishings, does everything need to be sold off? The person can make an offer to the curator to purchase back his/her property or assets and arrange to pay it off. Generally this offer would Some advantages of sequestration are: As soon as the provisional order is granted, all be given preference. legal actions and collections are suspended, bringing great relief from phone calls and Disadvantages letters. The moment a person decides to The costs are very high especially when sequestrate, she/he stops paying all debt. To compared to Debt Counselling. The application pay any further debt at this stage would be may also possibly be turned down by the Court throwing good money after bad, this helps in (although normally your legal counsel would explain the likelihood of this happening). that immediately cash flow improves.
Things to keep in mind: Where persons are married in community of property, one application is brought Where persons are married out of community of property, and both persons are applying for sequestration, it would consist of two separate applications – meaning higher costs. Debt Review vs Sequestration When is debt review the answer and when should sequestration be considered? Well, If the debt review will assist with the restructuring of the debt, and the person will recover within a resonable period, then debt review is the obvious answer. Thus you will find that recently some courts have turned down some sequestration applications and rather ordered a debt review. However if the debt review process is merely an attempt to solve a hopeless situation and postpone the inevitable, then it is best that the person sequestrates as soon as possible (provided they can afford it and would qualify).
Some famous people who were sequstrated: Donald Trump (twice); Walter Disney (before starting Disney Pictures) Abraham Lincoln (16th American Presidentbefore he was president ); Milton Hershey (4 times – on the fifth go he started Hershey’s chocolates, now a huge international company); Meat Loaf (before “Bat out of Hell” album which still sells +- 200 000 albums per year); William C. Durant (He founded General Motors, Chevrolet and Durant Motors. Durant Motors was established in 1921 but unfortunately failed in 1933 after the Great Depression. General Motors went on to become the biggest car manufacturer in the world); Willie Nelson (country and western singer); Thomas Jefferson (American President); Kim Bassenger (actress); David Crosby (Crosby, Stills and Nash band); Heidi Fleiss (the famous “madam”); Zsa Zsa Gabor (actress); Ulysess S Grant (18th American President);
A special thanks to Nanika Prinsloo for her help Archie Griffin (football player); in putting this article together. M C Hammer (singer); Prinsloo & Associates OFFICES: Paarl, Barrydale, Mosselbay, Cape Town, Somerset West EMAIL: nanika@vodamail.co.za TEL: 072 855 8106
Isaac Hayes (voice of “Chef” on South Park); La Toya Jackson (Michael Jackson’s sister – singer and actress); Don Johnson (actor); Larry King (famous talk-show host); William McKinley (25th President of the USA)
CONSUMER
Get more wear out of your clothes!
We all know how expensive new clothes can be and when times are tight you simply do not have money to spare on new clothes every month. Here are a few tips on how to preserve your clothing for longer.
3. It Pays to Get Hung Out to Dry Clothes dryers not only cost a lot to buy and run, but they cook and beat the life out of your clothing too.
1. Wash less Often, and ONLY in Cold Water Many of us are guilty of “over laundering” our clothes, which not only costs time and money Drying your clothes on a good old-fashioned but is usually unnecessary. Washing and drying clothesline can increase the lifespan of some is often actually harder on your clothes than garments by as much as fifty percent. wearing them! 4. Catch them while they are small Consider wearing apparel items more than Most rips and tears start out small, so check once between washes and wash most clothing your clothes carefully after every wash to catch in cold water only; cold water costs less, is and mend snags while they’re still small and gentler on fabrics, and will get most clothes easy to fix. A stitch in time saves nine as the just as clean as hot water. saying goes.
Avoid overwashing your clothes, but remember if it smells... it’s time to wash it! 2. to Bleach or Not to Bleach... Bleach is great for making whites brighter and lighter, but the downside is that it can cause clothing to disintegrate more quickly. If you need to lighten stains or brighten white clothes, one idea is to try using baking soda and hot water instead.
5. Zip Up Before You Wash Up Metal zippers on jeans, jackets and other apparel items are like tiny chainsaws in the washer or dryer. If you leave them unzipped they rip away at other clothes during the wash and dry cycles. Best zip them up first. 6. Soggy Shoes The lifespan of a pair of shoes is often cut short by the effects of moisture, even more so than by pounding pavements. To make your shoes last longer, don’t wear the same pair every day.
Give each pair at least a day in between wears to dry out from the moisture they absorb from your body and the environment. Frequently shining or sealing shoe leather with a good polish or waterproofing agent like Scotch Guard helps protect against the damaging effects of moisture. 7. Resole or Replace When the soles of your shoes start to wear thin don’t just throw them out and buy new ones. You can have the soles replaced instead of spending more money on replacing the entire shoe. Just make sure you take your shoes to a good shoe repair shop.
REMEMBER looking after your clothes is a good way to keep your costs down and it just makes good sense. If you have more tips, which you feel you would like to share, feel free to send your tips to: magazine@debtcounsellingsa.co.za
INDUSTRY
CONSUMER
Before Complaining to the Banking Ombudsman When serious disputes arise you may wish to complain to the Ombudsman for Banking Services. However there are a few things to keep in mind before lodging your complaint.
ABSA Tel: 011 350 7870 Fax: 011 350 7733 Email: resolve@absa.co.za
Before the Banking Ombudsman will deal with a matter they require that the banks have been contacted directly (and presented with a written complaint) and if no response has been received within 20 days then they are willing to become involved.
African Bank Tel: 011 564 6643 Fax: 011 207 3862 Email: lungisa@africanbank.co.za
Capitec Tel: 021 941 2058 To the right you will find a list of the contact Fax: 0860 11 1129 details at the major banks where one can lodge Email: clientdispute@capitecbank.co.za a complaint. FNB For those banks not listed you can contact Tel: 011 283 8023 the Banking Ombudsman on 0860 800 900 Fax: 011 632 2317 and they will supply you with the appropriate Email: care@fnb.co.za contact details. Nedbank The Banking Ombudsman asks that a copy Tel: 011 295 5497 of the complaint document submitted to the Fax: 011 295 0287 relevant bank be included in your complaint to Email: preadr@nedbank.co.za the Ombudsman. Standard Bank Please feel free to visit the Ombudsman for Tel: 0860 101 101 Banking Services website to download the Fax: 011 636 2911 complaint form on: www.obssa.co.za Email: ecru@standardbank.co.za
Now that you, as a Debt Counsellor, have entered into the debt review market with zest and zeal, hoping to not just add value to people’s lives but also create a functional effective business that can grow into a legacy for the future, you are suddenly faced with more challenges than you may have initially anticipated. These challenges, although frustrating, create an opportunity for growth and improvement across the board. One of the many challenges that you may face as a Debt Counsellor is the “fine line” between debt restructuring and financial advice, with emphasis on “fine line”. Somehow the relationship between these two functions (Debt Counsellor and Financial Advisor) are intertwined and very difficult to separate. As a Debt Counsellor you may have been asked the following – “what about my insurance policies or where can I get a product that is specific to my debt review process?” or “what do I do about my portfolio?” In terms of legislation from both the Financial Services Board and the National Credit Regulator, you need to be accredited in order to trade in either environment effectively with a keen eye on compliance. At Debtplan, being Hollard partners,
about 18 months ago we discerned that a need would arise to not only provide clients with niche based industry specific products but also a backup fiduciary and financial planning function to you as a Debt Counsellor. We spent our time wisely, (and it has been just as frustrating and challenging for us to operate effectively in this space) and have neverthe-less managed to forge ahead partnering Debt Counsellors across the country. These partnerships have enabled Debt Counsellors and their staff to work more effectively on their core function – debt restructuring, by passing on the financial planning and insurance function to Debtplan. Through our larger than average infra-structure and the backing of the Mobicorp Group which consists of Smart Insurance SA & UK, Bikefinsponsors of the Honda racing team, and Streamline (Chips Away), we have confidently grown into our role and functions with aplomb. Should you require us to partner you and assist in keeping the “fine line” a line none the less, feel free to contact us and a Relationship Manager will meet with you, to discuss a business model that is best suited for you and your business.
INDUSTRY
NCR TASK TEAM ON DEBT COUNSELLING
Findings and Recommendations Debtfree DIGI has been bringing you all the ongoing news regarding the NCR’s Task team over the last few months. Finally the Task Team has released its findings along with proposed improvements in the debt counselling process. As a reminder the Task Team was set up by the NCR in October last year to propose measures to reduce the backlog of unresolved
cases under debt review. The Task Team was chaired by Advocate Neville Melville, with the following members: Paul Slot (Debt Counselling Association of SA); Johan de Ridder (Banking Industry) and Rob Easton-Berry (Consumer Friend). The team was assisted by Marlene Heymans (NCR); Sue Hutton (Consultant) and Mareesa Kreuser of the University of Pretoria Law Clinic.
Report Highlights: As at the end of June 2010 over 180 000 consumers had applied for debt counselling with an average of 7500 new applications being received each month. “Our findings show that backlogs in the debt review process are being caused by a complex set of factors including severe capacity constraints in the judicial system, weaknesses in the process, inadequate operational compliance by credit providers and DC’s as well as possible abuse of the process by consumers,” says Task Team chairman, Neville Melville. Over the past eight months, the Task Team conducted an extensive consultation with DC’s, credit providers and payment distribution agents (PDA). PDA’s are responsible for the collection and distribution of payments on behalf of consumers who are under debt counselling. The NCR obtained a High Court Declaratory Order in August 2009, which gave clarity on the interpretation of a number of the contentious sections of the Act. Since then, the volume of cases processed through the Magistrates Courts increased significantly, but the backlogs remain high. “It is obviously not to the advantage of either credit providers or over-indebted consumers for debt review cases to drag on for years,” says Melville. “It poses a risk to the financial system and is contrary to the intention of the NCA of speedily getting over-indebted consumers back on their feet and into the economy.”
distribution of consumer repayments. For example, there is no provision in the NCA for interim payment arrangements pending the date of the Magistrate Court hearing, resulting in payment interruptions being treated as defaults. “There is also no effective collection mechanism to ensure that consumers continue making monthly payments to meet their obligations in terms of restructured payment plans,” says Melville. There are currently more than 1642 debt counsellors registered with the NCR. It is estimated that around 1000 are currently practicing as DC’s. Gabriel Davel says that the report highlights that there are shortcomings on the part of both DC’s and credit providers. He notes that many DC’s do not provide “realistic” debt restructuring proposals to credit providers and “do not provide followup support to consumers to ensure that they continued to meet their financial obligations under the new arrangements”. (If you are a DC and want to offer Debtfree DIGI as part of your “after care” service to your clients please mail: magazine@debtcounsellingsa.co.za we will be happy to assist you.) “We also found many cases where DC’s promote the debt review process as a type of payment holiday, with no realistic intention of effective rehabilitation” says Davel.
Paul Slot, one of the leading debt counselling groups (and a member of the Task Team) says that technology could play an important role in helping debt counsellors and credit providers to accurately assess the financial The team found that there was a lack of situation of indebted consumers and help standardisation of debt review documentation them to restructure their debt. “The computer as well as problems related to the receipt and programmes which support debt counsellors
constitutes a critical factor in the success of the debt review process,” says Slot. ”Software packages therefore need to comply with minimum standards and must be thoroughly tested.” The implication is that the NCR would do so.
Many Debt Counsellors do not provide “realistic” debt restructuring proposals to credit providers and “do not provide follow-up support to consumers” to ensure that they continued to meet their financial obligations under the new arrangements.
effectively from an administrative perspective under the proposed debt review process enhancements, format standardization and debt restructuring rule principles in the Task Team recommendations with the aim to solve increasing numbers of cases through consent agreements, rather than through contested court hearings,” he says. This would obviously be advantageous to all parties.
He added that the banking industry is encouraged by significant progress made during the last few months. Progress include broad credit industry support for the proposed process improvements as well as the set of consensual debt restructuring rules for deserving cases in the Task Team report. The deployment of the restructuring rules will be supported by a centralized, independently governed web-based rules system which will enable the application and validation of Rob Easton-Berry, a specialist attorney who debt restructuring proposals. This system does work for major retailers and a member of is sponsored by the banking industry and is the Task Team, says the accurate assessment presently under development (see Debtfree of the consumer’s financial position is an DIGI June 2010). important first step in the debt counselling process. “Retail credit providers believe the The industry also believes that ongoing efforts financial assessment should be fair to all parties are required to inform consumers of the benefits, involved”. “For the consumer, the budget risks, costs and obligations of the debt review should reduce lifestyle costs within reason process and to advise consumers on dealing and for credit providers the budget should be with debt distress. This is especially true of DC’s drawn up to ensure that the maximum possible who are looking for new clients. According to amount has been made available to repay the the report there were also indications that a debt.” growing number of consumers may be abusing the debt counselling process and using debt Johan de Ridder, a banker (and member of counselling as an excuse for not meeting their the Task Team), says credit providers support payment obligations. However that may simply the Task Team’s proposals and would work to be the opinion of credit providers sneaking combat over-indebtedness. “Banks and DC’s their way into the report. “The problem is need and should be able to co-operate more being compounded by certain DC’s who are
encouraging consumers to abuse the system,” says Melville. The banking industry is working with the NCR on a public awareness campaign dealing with these issues. It remains to be seen whether the campaign will promote Debt Counselling for those who qualify or rather try dissuade people from making use of the process much like material produced by the NDMA.
Banks and Debt Counsellors need and should be able to co-operate more effectively from an administrative perspective under the proposed debt review process enhancements, format standardization and debt restructuring rule principles
As to who would represent DC’s it seems that DCASA as the only real representative body of any size will be invited. At present DCASA represent about 1/3rd of practicing DC’s in South Africa. The Task Team are pushing for the implementation of codes of conduct and establishment of a Debt Review Ombud to adjudicate disputes would also play an important role. This proposal was met with a very favourable response from all parties. “The Task Team’s recommendations are largely voluntary measures and will depend on the co-operation of different players in the industry,” says Melville. “However, whilst the implementation of these voluntary measures is important, it is critical that the Act be amended in order to address the problems which have been identified in the report.”
“Debt counselling has an important role to play in dealing with the impact of the financial crisis. A more efficient and effective debt The Task Team recommended significant review process will not only benefit individual process changes for debt counsellors and consumers, but the economy as a whole”, credit providers in order to streamline the added Davel. resolution of cases. It also proposed a number of improvements to the documentation With 8 million consumers in serious credit produced by both credit providers and debt trouble in South Africa and with only 180 000 counsellors. However it does not seem as if people under debt review at present, debt the NCR themselves will be producing any of counselling is currently only helping just over these documents as guidelines. Rather the 2% of the population who find themselves in Task Team recommended that a “national debt trouble out there. It remains to be seen how review committee” be established consisting of many new consumers will be made aware of representatives from credit providers, DC’s and the benefits (through the Banking Sectors PDA’s. This committee would serve as a forum campaign) and apply for debt counselling in for the collaboration between the different the near future. stakeholders in order to improve the efficiency and effectiveness of the debt review process. Special thanks to: Bullion PR & Communication
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Do not wait until you are registered and then learn by trial and error- Enroll now for The Bridge __________________________
For more information about The Bridge, or if you would like to find out about our other service offerings, contact: Christina: Peter:
082 450 7459 082 782 0595
Workshop Ov erview
In te r vie w Te ch niq ue s
P r a ct i c al e x amp le s
Ap p l i c at io n F o rm Co mp le t io n
Co mp le t io n o f F o r m 17 . 1; 17. 2; 17 . 3 ; 1 7. 4 e tc .
B ud g e t C a l cu la t io n
P ro p o s a l P re p a r a ti o n
Co u rt D o cu me n t s p re p a r a tio n
In so l ve n c y
Wh a t i f s ce n a ri o s
N P D A t r ai nin g p ro g r a m
B us ine ss F und a m e n t al s
N C R Re q ui re me n t s
ccambouris@eccsystems.co.za www.mgconsulting.co.za
INDUSTRY
Uncertainty
The minefield of Section 86(10) Terminations in accordance with the provisions of the National Credit Act, 34 of 2005 Legal fisticuffs are being felt in the High Courts of our land with unfortunate ramifications for credit providers, consumers and debt counsellors, though with varying degrees, depending on which view is ultimately held to be correct by the Appellate Division. Our central protagonists are Judges KathreeSetiloane AJ on the one side and Kemp, J on the other. In the vexing question of what constitutes proper termination of the debt review process in terms of Section 86(10) of the National Credit Act, 34 of 2005, Kathree- Setiloane AJ has sought to reply upon her understanding that “the purpose of the act is clearly to promote and protect consumers. The Act must accordingly be interpreted to give effect to this core purpose”. In the other corner, Kemp J has stated of Kathree- Setiloane AJ that:” to interpret the act through the lenses of the promotion and protection of consumers is with respect to lose sight of the other objectives of
the Act and to load the bias in favour of the consumers unfairly against the rights of the credit providers and ultimately, to potentially prejudice the rights of consumers, as their well being and accessibility to credit is premised on a healthy and profitable industry.” (SA TAXI SECURITISATION( PTY) LTD V NAKO EASTERN CAPE JUDGMENT DELIVERD ON 8th June 2010) For the moment, in (SA SECURITISATION (PTY)LTD V MATLALA SOUTHERN GAUTENG HIGH COURT DELIVERED ON 29TH JULY) Kathree- Setiloane AJ seems to have had the last say where she confirmed her finding in (STANDARD BANK OF SOUTH AFRICA LTD V KRUGER AND PRETORIUS (separate cases)) that: “Once the Debt review process has been initiated, which thereafter results in the referral of the debt review to the Magistrates Court, the Credit Provider is not entitled to institute proceedings to enforce its claim, unless the Magistrates Court has made a determination
in terms of section 87 of the Act.” She also makes the finding that the referral must be made before notice in terms of section 86(10) is received by the credit provider. This means that the application must be issued at court and served on the Credit Providers by fax, email (provided with permission) or in accordance with the rules of the Magistrates Court to prevent the termination of the debt review process. The uncertainty of the situation is reflected in the decision of the National Credit Regulator to approach the High Court for and order declaring that, notwithstanding the lapse of the 60 business day period from the date which the consumer applied for debt review the Credit Provider may not validly give notice in terms of section 86(10) of the Act to terminate the debt review process provided for in section 86 in the following circumstances:
The debt counsellor has failed to make a proposal to the Magistrates Court in terms of section 86(8)(b) of the Act and the consumer has failed to apply to the Magistrates’ Court in terms of section 86(9), but such failure is due to the failure of the credit provider to comply with its obligations under section 86 of the Act It seems from my experience that many consumers have been regularly paying their rehabilitation payment as determined by the debt counsellors, but due to uncertainty in the law as well as the debt counsellor’s lack of understanding of the law, the debt counsellors have failed to bring the section 87 applications to the magistrate court timeously for determination. It’s a pity that the NCR has failed to include such circumstances in their declaratory. Perhaps the NCR should be placed under more pressure to do so. In the mean time the debt counsellors should be focused on getting their applications issued and served within the 60 day period.
Prior to such notice the debt counsellor has made a proposal to the Magistrates Court in terms of section 86(8)(b) or the consumer has applied to the Magistrates’ Court in terms of Would you like to receive a copy of one of the section 86(9);or judgements mentioned in this article? Contact Brett Carnegie on: The credit provider has prior to such notice Tel +27 (0)21 447 0332. received notice of a date for a hearing Email brett@carnegielaw.co.za contemplated in section 87(1) and such hearing has yet to take place; or
INDUSTRY
ABSA Debt Review
During July 2010 ABSA met with Debt Counsellors country-wide to inform them of changes in regard to ABSA’s Debt Review process. During July Pascal Sinclair (of ABSA’s Business Partner Interactions) was a very busy man, travelling the country from meeting to meeting. Debtfree caught up with him at the Cape Town Meeting with DCASA. What was all the fuss about? Well, in June 2009 ABSA realised that with the incredible growth of Debt Counselling and the ever increasing amount of applications that were being made they did not have “enough skilled staff” or an “in-house system” that could handle the work load. As a result ABSA turned, like so many others, to Rob Easton-Berry and his company Consumer Friend who had and still has an excellent reputation in the industry. ABSA gave Consumer Friend a year long mandate to handle ABSA debt review matters. As Mr Sinclair puts it: “Rob Easton-Berry saved ABSA debt review.” In 2009 the University of Pretoria as well as Africa International Advisors (on behalf of the NCR) released a report regarding hold ups in the system. It was seen that there were many snags in the system at that time. ABSA themselves also conducted what was called the DC Barometer survey. ABSA, in their own survey, found that about 60% of proposals they were receiving
were not being responded to within 10 days and that 49% of DC surveyed complained that ABSA CoB’s were not being received in 5 days. A further complaint from the surveyed DC’s was that half the counter proposals they received were extremely unrealistic. Most DC’s will confirm that once Consumer Friend became involved a huge change was noticed and ABSA proved themselves to be a friend to the consumer with an extremely high rate of proposals being accepted and very few unnecessary terminations taking place. However things are now changing at ABSA Debt Review. As of 01 August ABSA will be handling all Debt Review matters in-house. What does this mean for DC’s? Well, Mr Sinclair assures DC’s that things will be “business as usual” and that “all that will change will be the contact numbers.” We can only hope. ABSA has been training staff since January 2010 and has been running tests at their new centre during the month of July to iron out any problems. Their new call centre has gone live and is already assisting DC’s and PDA’s with regard to review matters.
The call centre will issue each clients review with a unique reference number which the DC can use to track matters. The Debt Review department has been authorised to accept and make proposals for all ABSA products themselves without having to consult individual product houses within ABSA for approval. This means that they will be able to respond faster, as they will not have to wait on “Home Loans” or “Vehicle Finance” for their input. The Review Department will make that call themselves. The Debt Review Department will even be able to issue settlement figures, which will greatly assist in many cases.
to try smooth issues that arise there. DC’s were asked at the presentations not to simply cc them on each and every issue that arises but to view them as a last resort.
Terminations When asked about ABSA’s policy on terminations in terms of Sect 86(10) Mr. Sinclair told Debtfree ABSA are focusing only on clients accounts where ABSA have not received funds for 4 months or more. This allows time for DC and legal fees to come off as well as any PDA reference number issues to be solved. “In most cases we are really only looking at those accounts which are now sitting 6 months in ABSA have also been conducting workshops arrears” says Sinclair. There is also a plan afoot with all PDA’s, in an effort to assist them in to notify the DC of a pending termination in an getting the clients funds to the right ABSA excel spreadsheet 5 days before a 86(10) letter accounts as speedily as possible. They have also is generated. They also intend to allow for 10 sent out communication to DC’s which outline business days to pass before an application which funds should go into which accounts will then possibly be terminated. This will allow and what the various account numbers should for PDA ref number and payment issues to be look like. They hope this will cut down on resolved or matters to be set down. ABSA have any confusion that may occur when a client in the past seemed to have the interest of the provides a DC with incomplete details on their client at heart in this area and it remains to be form 16 and help in assigning the accounts seen if there will be any change in this area. on the distribution software provided by the various PDA’s. One nice feature of ABSA’s banking policy is to never change an account number whether Relationship Officers it is being handled by Legal, Collections or A new feature which DC’s have been asked Debt Review. We all know what confusion can to make limited use of is the new position of result from that sort of thing (no banks will be relationship officers for each province at ABSA named). ABSA have also confirmed that they Debt Review. These officers (like Bongani will be allowing for service of Court documents Redebe formally of the NCR) will assist in via electronic means. trouble shooting in some cases but their main focus it to look at system problems and find The industry waits to see how things progress solutions that will help speed up turn around over the next few months. Will it be “business time and staff issues in the centres. They will as normal”? We hope so. also be working closely with the various PDA’s
INDUSTRY
NEWS FLASH Call for help Kerry Smith of DRS Algoa is compiling a report to the NCR regarding summons which the credit providers are issuing despite the fact that a court order has been granted and that the consumer is not in default.
Walking in your clients shoes They say it is important to put yourself in your client’s position to be able to empathise with them. One DC in the Western Cape found this very easy to do this past month... with a little help from Consumer Friend.
She says: “This is becoming a huge problem as summonses are being erroneously issued by credit providers (in particular the major banks). Unfortunately, the action has to be defended in court and such costs can be astronomical for any person let alone a consumer who is under debt review. The credit providers seem to be using this as a bullying tactic which is working because of lack of available funds to defend the action.”
After experiencing some problems with his credit card he gave the bank a call. They informed him he was “under debt review”. It seems that someone at Consumer Friend captured the DC’s details from a 17.1 sent for a client of his on their system. Soon he received a CoB (within the 5 day target too).
Please forward her any similar issues which you may have. Her details are as follows: Tel: (041) 364 1888 Fax: 086 692 3463 Email: kerrys@drssa.co.za
It’s interesting to note that according to the CoB the DC in question is his own Debt Counsellor with an Afrikaans version of his name. Debtfree asked how things were progressing, his company replied: “We are happy to report that he is a keen and co-operative participant in the rehabilitation process” We hope he manages to sort the matter out or his DC will have to issue a 17.4 for him.
DC 3rd quarter report to NCR Dont forget to hand in your quarterly report to the NCR. The deadline for the 3rd Quarter report is Sunday,15 August 2010!
Service Directory Debt Counselling AA Debt Counselling Centre Anthea Johannes NCRDC531 Tel: +27 (0) 21 982 0522 Cell: +27 (0) 84 402 7032 Alan Watts NCRDC 962 NCR registered Debt Counsellor Tel: 084 4448439 Fax: 086 6501954 alan@active-debt-counselling.co.za www.active-debt-counselling.co.za Central SA Debt Counsellors 082 950 7806 Fax: 086 563 1621 Consumer Assist Andre Snyman Tel: 0861 628 628 Darran Manikam NCRDC704 debt@mailbox.co.za DebtSafe 0861 100 999 Durban Debt Counselling Services Suite 112, 1st floor Union Club Building 353 Smith Street Durban, 4001 Tel: 031 301-7893 Fax: 031 301-5809 phumla.ngema@telkomsa.net Debt Counselling South Africa Cape Town Branch Tel: 021 919 66 94 Rod De Witt NCRDC831 Visit: www.debtcounsellingsa.co.za
Debt Knowledge Debt Counselling 082 379 2337
gary@ndad.co.za www.ndad.co.za
Debtonators 041 585 0276
Think Green Debt Counselling Sandi Pauw sandipauw@mweb.co.za Tel : 012 991 6638 Cell : 082 460 7800 Fax : 086 219 2615
Fincorp debt Counsellors cc Cecilia Zwarts fincorpdc@yahoo.com Helpdesk Debt Counsellors Allan Hoffman Tel: 0861 000 754 Help-U-Debt (Vaal Triangle) Wanine Tel: 082 445 3967 Help-U-Debt (Potchefstroom) Madra 083 390 3275 Help-U-Debt (Parys) Marilouise 082 920 6249 Help-U-Debt (Vanderbijlpark) Herma 083 320 8303 MG Consulting For your Debt Counselling Service M.C. Cambouris NCRDC1403 Telephone: 021 919 4618 082 450 7459 082 782 0595 Fax: 086 622 0690 Bellville NDA Debt Counsellors Your Trusted Debt Counsellors Gary Williams (NCRDC 143) Tel: 034 315 3880 Fax: 086 612 4112
Incentive Debt Counselling “Paving the way to a Debt Free Tommorrow” Darran Manikam NCRDC704 Tel: (031) 409 9379 Fax: (031) 409 1327 Cell: 0845898286 Branches: Phoenix and Shallcross Indigo debt counsellors CC Tel: 087 808 9734 Fax: 086 580 8675 indigodc@iburst.co.za Ramonti Debt Counselling Jacob Ramonti - NCR DC 932 Cell : 082 962 4537 Fax: 086 658 7627 Email:ditsamai@yahoo.co.uk Soweto Rihanyo Debt Counselling (012) 804 50 57 U-Win Debt Counsellors Coreli Roos NCRDC509 Aliwal North, Burgersdorp, Bethulie, GariepDam, Smithfield, Springfontein Cell:079 626 66241 croos@global.co.za
BORDER REGION: DRS BEACON BAY Office: 043 748 5644 DRS EAST LONDON Office: 043 7212 656 DRS KING WILLIAMS TOWN Harry Light Cell: 082 573 5803 Office: 043 643 3024 Email: harry@drssa.co.za DRS MTHATHA Office: 047-5323356 DRS QUEENSTOWN Office: 045 838 9764 EASTERN CAPE: DRS ALBANY Office: 041 365 5857 DRS ALGOA Craig Wheetman Cell: 083 299 0311 Office: 041 364 1888 Email david@drssa.co.za DRS BOND CHOICE P.E. Office: 041 393 7000 DRS CENTRAL 041 586 2020 Email leon@lynxsa.com DRS DESPATCH Office: 041 933 1189
DRS HUMANSDORP Office: 042 291 0135
DRS ROODEPOORT EXPRESS Office: 011 472 4171
DRS KIRKWOOD EXPRESS Office: 087 8080 500
DRS RUSTENBURG 083 740 4620
DRS PORT ELIZABETH Office: 041 453 8961
DRS ZAMBESI EXPRESS Office: 012 7555 225
DRS SIDWELL EXPRESS Office: 041 451 0474
KWA ZULU NATAL:
DRS SOMMERSET EAST Luther De Bruyn Office: 042 243 1107 FREESTATE: MANGAUNG Zune Coetzer Office: 051 436 4515 Email zune@drssa.co.za SOUTH FREESTATE Office: 053 591 0734 GARDEN ROUTE: DRS GEORGE Office: 044 874 2820 Email francoisv@drssa.co.za GAUTENG: DRS CENTURION EXPRESS Office: 012 653 0127
DRS DURBAN NORTH EXPRESS Office: 031 584 6305 DRS GREYVILLE Office: 031 309 8716 DRS KOKSTAD Office: 039 727 1430 DRS PHOENIX 082 374 7040 WESTERN CAPE: DRS BELLVILLE Office: 021 948 8523 / 4 DRS DIAMOND Office: 021 421 8563 DRS TYGERBERG Office: 021 945 4062
DRS HARTEBEESPOORT Office: 012 253 1231
DRS WEST COAST Marius Coetzee Cell: 082 978 4407 Office: 022 713 3766 Email mariusc@drssa.co.za
DRS LIMPOPO CENTRAL Office: 015 297 1387
Debt DRS SALDANHA Office: 022 714 3939
DRS PRETORIA NOORD Office: 012 546 2187
DRS SOLUTIONS 084 586 5600
Support services Staff Line Ndizani Executive Recruitment Cell no: 083 3028163 Direct Line: (011) 468 - 2150 E- Mail: saki@staffline.co.za
Blank Design For all design and marketing needs including websites, brochures, business cards etc. Steve Rosenberg steve@blankds.com 083 700 2020 www.blankds.com Designtimes South Africa’s creative resource www.designtimes.co.za
Financial ABSA Customer Debt Repair Line 0860 356 356 Credit Ombudsman 0861 662837 Experian 011 799-3400 debtcounsel@experian.co.za Eric Streso Financial Planner B Juris LL B CFP MBA Tel: 0833273358 Fax: 086 612 7912
Fair Debt 0829019788 or 012-3772558 ray@fairdebt.co.za PACFIN Financial Solutions Head Office Tel: +27 11 9757445 Fax: 0865368783 36 Van Riebeeck road Kempton Park 1619 pieter@pacfin.co.za Monte Carlo Building No 8 Voortrekkerstreet Kempton Park 1619 Kempton Park Contact: Reyno Coetzee Tel: +27 11 3945363 Fax: 0866048002 Cell: +27 73 3690884 kemptonpark@pacfin.co.za Boksburg / Germiston Contact: Armand Posthumus Tel: +27 11 8921911 Fax: 0865620378 Nelspruit Contact: Ann Baker Tel: +27 13 7415559 Fax: 0880 1374 15559 Cell: +27 82 9024236 jeleroux@telkomsa.net Springs Contact: Wynand Mclachlan Tel: +27 11 8113728 Fax: +27 11 8113728 Cell: +27 83 2754014/5 wynmc@telkomsa.net Gooseberry Business Advisory Tel: 012 644 0589
Nedbank Debt Rehabilitation & Recoveries Services 0860 109 279 STD Bank Debt review Helpline Telephone: 0861 111 402 TransUnion 0861 482 482 Thinkmoney Financial comparison website Contact: Gareth Mountain Tel: 079 0996 798 www.thinkmoney.co.za WIZARD Vereeniging Making Mortgage Magic Wanine Smit Tel:+27 16 454 1132 Fax:+27 86 686 3678 Cell:+27 82 445 3967 www.wizard.za.com
Financial Planning Eric Streso Financial Planner B Juris LL B CFP MBA Tel: 0833273358 Fax: 086 612 7912
Legal Brett Carnegie Attorneys Tel: +27 (21) 4470332 Fax: +27 (21) 4470338 Mobile: +27 (0)82 320 6099 www.carnegielaw.co.za Physical Address: Suite 23(B) Unit 8 Waverley Business Park Mowbray 7700 Ludick Attorneys bev.ludickattorneys@gmail.com Prinsloo & Associates Attorneys and conveyancers Nanika Prinsloo Farm Bergamot, Paarl 7620 P O Box 6199, Paarl 7620 14 Laing Street, Barrydale 6750 Cell: 072-8558-106 Fax: 086-623-5986 nanika@vodamail.co.za www.empowerlaw.co.za
Micro Lenders Credit Bureau 0861 28 7328 www.mlcb.co.za TransUnion 0861 886 466 www.transunion.co.za XDS 0860 937 000 www.xds.co.za
Other Association of Debt Recovery Agents: 011 781 3337 www.adraonline.co.za Banking Ombud 0860 800 900 www.obssa.co.za Credit Bureau Association 011 886 8519 www.cba.co.za
Credit Bureaus
Credit Providers Association 011 789 6825 www.cpa.org.za
Compuscan 0861 514 131 www.compuscan.co.za
Department of Trade and Industry 0861 843 384 www.thedti.gov.za
Computer Profile Bureau 0861 28 7328 www.c-p-b.co.za
Financial Advisory and Intermediary Services Ombud 012 470 9080 www.faisombud.co.za
Experian www.experian.co.za Business- 0861 63 60 70 Consumer- 0861 10 5665
Financial Services Board 012 428 8000 www.fsb.co.za
Furniture Traders Association 011 789 6770 Legal Resources Centre 011 836 9831 www.lrc.org.za Long Term Insurance Ombud 021 657 5000 www.ombud.co.za Micro Finance South Africa 012 345 0809 www.mfsa.net Motor Industry Ombud 012 841 2945 www.miosa.co.za National Credit Regulator 0860 627 627 www.ncr.org.za Ombud for Short term Insurance 011 726 8900 www.osti.co.za Pension Funds Adjudicator 021 674 0209 www.pfa.org.za South African Fraud Prevention 0860 101 248 www.safps.org.za The Banking Association 011 370 3500 www.banking.org.za SA fraud protection service (free service) www.safps.org.za 0860 101 248
EVENT South African Law Centre Debt Counselling Workshop Delegates will be given an overview of the evolution of the debt review industry, its contribution to society, its prospects and the obstacles that hinder the purposes of the industry. They will learn the findings and recommendations of the National Credit Regulator’s Task Team into debt counselling and possible changes that might emanate from that. Ethical behavior comes under the spotlight, and we will examine how the Consumer Protection Act will affect the debt review industry. Delegates will also be given insight into how to bring matters to court without being dismissed outright Speakers: Peter Setou, Stephen Logan and Mareesa Erasmus VENUE Johannesburg: The Forum, Bryanston; 19th August
The next course will be on: 23-27 August 2010 Venue: Bellville, Cape Town, Western Cape The course fee is R3 800.00 Contact details: Tel: 012 420 4155 / 012 420 5910 Mr Frans Haupt / Ms Aniki van Wyk
WORKSHOPS ON CONSUMER RIGHTS & INSOLVENCY Prinsloo & Associates ATTORNEYS AND CONVEYANCERS DATE: To be advised Cost: Free Contact: Nanika Prinsloo Cell: 072-8558-106 email: nanika@vodamail.co.za Fax: 086-623-5986 www.empowerlaw.co.za
Price: R2500.00 Contact Gunther Deutsch at gunther@salc.co.za
DC Training The University of Pretoria is offering a 5-day training course (and written examination)
If you want to subscribe, advertise or be listed in our directory please contact us! magazine@debtcounsellingsa.co.za Would you like your after care clients to recieve Debtfree each month? All you need to do is forward us their email address to magazine@debtcounsellingsa.co.za