Debtfree Magazine Jan 2017 by Debtfree Magazine

South Africaâ&#x20AC;&#x2122;s debt counselling magazine

HOW DEBT REVIEW WORKS January 2017 www.debtfreedigi.co.za

What you can expect from Hyphen PDA: • Increased Debt Counsellor Profitability • Flawless Systems • Meaningful Reporting • Contented Consumers!

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Chris van der Straaten, Head: PDA 082 557 0437

Malcom Povey, Head: Operations PDA 082 445 5604

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EDITOR’S NOTE debt restructuring plan oneself with paying via a PDA. The issue should give you an idea of how the process works and if it would be right for you. If you are already under debt review, this issue will remind you of what you have been through and where you are in the process at the moment. It will also help A lot of people make new year’s you see the way ahead. resolutions like: “this year I am going to get out of debt”. What a great idea! We also have some interesting industry Sadly, as we know, following through news to help you keep up to date and on new year’s resolutions can be a lot we consider a recent court case which is harder than making them. Most people having an impact on the industry. That fail by the end of the first month. and so much more. Time can slip by and good intentions can fall by the wayside Well, if this year getting rid of debt is if you don’t watch out. The key is to have one of the things in your life you would clear defined goals and identify steps like to tackle then, fortunately, we have you need to take each month to achieve some helpful info for you about one of them. We hope you enjoy the issue and the ways you may be able to do that. that the months that lie ahead bring you In this issue, we discuss all the different closer to all your goals (including being aspects of the debt review process. We debt free). look at how to combat debt, what to do when your debt is out of control, who can help you and how the debt review process works. We compare the NCT and Court processes. We also compare paying off your debts according to the The year sure has got off to a busy start, with petrol prices going up, electricity hikes looming, water getting increasingly scarce, President Trump causing all sorts of chaos (which has been good for the Rand) and all those tricky back to school costs.

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South Africaâ&#x20AC;&#x2122;s leading Debt Counsellors Click through to

www.creditmatters.co.za or call our national call centre on

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CONTENTS Worrying About Debt

what will it cost?

debt review process

NEWS

cpâ&#x20AC;&#x2122;S love debt review

SERVICE DIRECTORY

Worrying About Your Debt Is Killing You Scientists tell us that stress leads to all sorts of health issues and is incredibly bad for you. If you owe people money that you are struggling to repay each month, then you know all about that. Sleepless nights, a feeling of dread and even panic attacks are common among those with debt. Stress about debt can also make you more likely to fight with family and friends. Debt stress has also been shown to reduce workers productivity which puts your job at risk. All in all, debt stress is just plain bad for you. But if you have debt and are struggling to repay it each month you might wonder what can be done about it?

A lot of people hesitate to make needed changes even when they see a problem getting worse and worse. This can be true of people struggling with debt. Many people with debt mistakenly think that the answer to their situation is another loan. More borrowed money to throw at the debt problems you already have. This is a huge mistake!

Ask yourself: Can you dig your way out of a hole?

Getting rid of your debt will help you relieve the stress that is so bad for you and for your family. Less debt means less stress. Less stress means you can look forward to waking up each day It is much better to reduce your spending and going to work, spending time with by making big changes and also to try your family and friends. earn more and focus on getting rid of your debt. If you have already reduced If you are experiencing debt stress, then your spending and can’t earn more, but now is the time to act. Don’t waste time. still struggle to repay your creditors, Start your journey to living a debt free then the good news is that you still life. You will find it brings great peace have options which can help – like debt of mind. review.

Ways To Reduce Your Debt Credit is a useful tool which consumers use to improve their lives and build long term wealth for their families. However in the present economy it is possible that your debts can start to mount up and put a lot of stress on you. Like so many other things in life, you need to plan and work at dealing with your debt obligations to get the best results.

TIPS FOR DEALING WITH DEBT Know What You Owe Make a list of all your debts, list them from smallest to largest. Make a Debt Repayment Plan For quick victories pay off your smallest debts first; To save the most over time, pay off your highest interest rate debts first.

Reduce your monthly household spending Shop wisely, make a list before going to the shop, compare prices and watch for good deals.

Try to earn a little more and pay a little more If you are able to repay a few extra Rand toward any of your debts each month this will add up, saving you a lot Life is about more than just money If you are experiencing debt stress, talk over time. to your credit providers. Reasonable Get Help Sooner Rather Than Later credit providers, like ABSA, will try to If you have tried to reduce your work with you to make a plan that spending and repay your debts on works for you. your own but are still struggling, why not talk to a professional NCR Never skip debt repayments! registered Debt Counsellor? “At ABSA we want to help our clients deal with their debt obligations in a responsible way. We create banking that suits you”. - Tejal Desai – ABSA Debt Review Manager

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ContACt one oR youR debt Counsellor! 0861 one 266 562 ContACt oR ContACt youR one oR youR debtwww.one.za.com Counsellor! debt Counsellor! 0861 266 562 0861 266 562 www.one.za.com www.one.za.com sam Haasbroek:

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terms & Conditions aPPly

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ONE Insurance Underwriting Managers ONE Insurance (PTY) LTD Underwriting Reg(PTY) No. 1996/008987/07 Managers (PTY) LTD Reg No. 1996/008987/07 Underwritten by: ONE Insurance Underwriting Managers LTD Reg No. 1996/008987/07 Authorised Financial Services Provider Authorised FSP8783 Financial VAT No. Services 4370160501 Provider FSP8783 VAT No. 4370160501

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A Member of

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KEY ROLEPLAYERS IN THE DEBT REVIEW PROCESS CREDIT BUREAU

CONSUMER INSURANCE

CREDITOR

PDA

CREDITOR

THEY HANDLE THE MONEY

CREDITOR

NATIONAL CREDIT REGULATOR

DTI

DEBT COUNSELLOR

NCT

COURT

ATTORNEY THEY HANDLE THE LEGAL PROCESS

Consumer education is vital for debt review success! Be sure to read Debtfree Magazine every month. ~ The Professor

Good Debt Counsellor VS Bad Debt Counsellor Finding the right company to help you get out of debt is important. Like any professional service, you want the best person for the job - someone who you can easily talk to and someone who is good at doing their job.

Good Debt Counsellor

Displays their NCR issued Debt Counsellor Registration Certificate Has a physical office you can visit Does not ask for money up front

Does not make unrealistic promises

Takes time to advise you on your monthly budgeting Explains the process in detail

Provides you with material on the process to help you understand & remember

Balances the needs of the consumer with credit providers

You particularly want someone who is trustworthy and legitimate. A lot of dodgy firms out there tell you they can help with your debt through what they call ‘mediation’. The problem is that mediation offers no legal protection unlike debt review. Be careful of these debt mediators and any firm who tries to offer you another loan or offers to use credit to ‘consolidate’ your debt. You know you can’t afford more debt, so don’t go down that road. You want less debt, not more. Your goal should be to pay off the debt you already have, in the fastest possible way. If you want to pay off your debt in a reasonable and responsible manner every month, then you want to find a NCR registered, professional Debt Counsellor.

Bad Debt Counsellor

Does not display their NCR Registration Certificate Never wants you at their office

Always makes you deal with staff members and not themselves Asks for payment before doing any work

Tells you to pay money into their bank account rather than via a PDA Tells you that you can skip payments at the start of the process Implies they control the whole process and not the courts

Just tells you the debt repayment figure but offers no budgeting advice Has no service contract

Why Credit Providers Love Debt Review All credit providers hope that their clients will be able to make their debt repayments in full and on time every month but they also realize that this is not always going to be possible. A lot of energy and expense goes into collecting outstanding debts. Credit providers are always looking for ways to speed up collections and reduce the cost and stress to all parties. This is why debt review is such a great solution.

BENEFITS TO CONSUMERS & CREDITORS No More Unrealistic Promises Realistic repayment plans mean no more making promises you know you wonâ&#x20AC;&#x2122;t be able to keep.

Realistic repayment plans means credit providers can plan their cash flow better themselves.

No More Missed Payments Missing payments means that extra fees, charges and interest is added onto your debt each month.

Consistent repayments mean that a debt is being serviced well and reliably.

Helping Clients Good budgeting advice ensures you will be able to cover all your basic needs, which reduces stress and also ensures debts are paid faster.

Happy clients are at work more regularly; earn more, pay debt faster and will stay the creditor for many years to come.

THE DEBT REVIEW PROCESS Consumer consults a Debt Counsellor

2 Credit Providers supply information on all debts

4 Credit Providers agree or make counter proposals

Smaller debts paid off making more funds available for bigger debts

14 The consumer can begin to use credit again if they want

The consumer pays every month

12 The time comes when the consumer can leave debt review or all debt is settled

The consumer signs a confirmatory affidavit for the court

10 The PDA provides statements

The consumer starts to pay the new reduced monthly amount via a PDA

8 The court considers the plan and responses and makes a court order

A new repayment plan is made and sent to the creditors

6 Court documents are created including the plan and responses

A new monthly budget is made which covers all basic needs

A clearance certificate is issued & credit bureaus notified

What Will It Cost? With any professional service, it is reasonable to expect that professional fees will have to be paid. This is very true with Debt Review. Debt Counsellors commonly make use of commonly agreed industry fees* along with suggestions from the National Credit Regulator to price their services. The costs for debt review are not very high, as the idea is to help debt stressed consumers get out of debt as soon as possible, not to make more expenses for consumers. The fees involved are built into each consumer’s debt repayment plan and is based on how much they end up repaying each month toward their debt. This means that the repayments are simply part of what consumers repay each month not over and above that amount. “The reasonable cost of a debt review is quickly outstripped by the savings on credit account fees and charges that consumers receive. With consensual interest rate reductions under debt review becoming the norm, the long term financial benefit to consumers can run into the thousands of Rands” Sebastien Alexanderson, Debt Counsellor The industry has set up a fee structure which makes allowance for consumers who have less money and repay less toward their debt each month, to pay their Debt Counsellor a smaller amount in professional fees. Even those consumers, who have more and eventually pay a higher amount toward their debt because they can afford to do so, benefit from agreed caps on fees. Let’s look at some examples of what debt review might cost a consumer or a couple. Couples make a joint application and don’t have to pay two sets of fees. Being able to cover all your basic needs at home removes a huge amount of stress from your life. Debt review budgets help reduce any wasting of funds that can go towards your debts.

National Debt Advisors Fighting For Consumer Justice Tel: 021 007 1688

www.nationaldebtadvisors.co.za

EXAMPLES OF DEBT REVIEW COSTS* Scenario 1 Original monthly debt repayment obligation: R5000

Scenario 2 Original monthly debt repayment obligation: R10 000

Scenario 3 Original monthly debt repayment amount: R20 000

Restructured Debt Review Repayment Amount: R2000

Restructured Debt Review Repayment Amount: R4 000

Restructured Debt Review Repayment Amount: R8000

Application Fee: R50

Debt Counsellors Professional Restructuring Fee (Once off in Month 1) R2000

Debt Counsellors Professional Restructuring Fee (Once off in Month 1) R4000

Debt Counsellors Professional Restructuring Fee (Once off in Month 1) R6000 – Fee cap reached

Monthly After Care Fee (from month 2 onwards): R100 (5% of the repayment amount for 24 months then reducing to 3%)

Monthly After Care Fee (from month 2 onwards): R200 (5% of the repayment amount for 24 months then reducing to 3%)

Monthly After Care Fee (from month 2 onwards): R400 – Fee cap reached (5% of the repayment amount for 24 months then reducing to 3%)

Fee if restructuring consumer’s budget allows for full original debt repayment each month: R300 (also known as a rejection fee, since further debt counselling is not needed) Legal Fees: Varies. Debt review matters go either to court or tribunal. Cost can apply and are disclosed to consumers in advance. NOTE: V.A.T May be applied by the Debt Counselling Firm to Fees. *This article uses standard industry agreed fees which are correct at time of printing. These fees are currently not regulated or legislated. Fees are subject to change by amendment to the NCA or new regulations from the DTI. Consult your local Debt Counsellor for the current fee structure. Debt restructuring figures shown are for example only and do not relate to a specific case. They do not constitute a guarantee in the case of a new application. Each individual’s fees are determined by their Debt Counsellor based on their specific situation and repayment plan in accordance with published regulations.

Debt Review Offers Legal Protection Have you ever had the situation where you make an arrangement with a creditor to pay them back a smaller amount and feel relieved when they agree, only to have a different person from the same creditor call weeks later and demand a different repayment arrangement? It can be frustrating to keep getting these calls and to never have clarity on exactly what the creditors are happy with or not. You constantly worry that somewhere, one of your credit providers is starting to take legal action against you and might send you a summons any day. That is very stressful. With debt review that is not the case. Debt Review and Debt Counselling is part of a legal process of restructuring your debt. What this means is that because every debt review matter goes before a judge, magistrate or tribunal, you get finality and the protection of a court order. The restructuring plan is set out in a court order. That court order means that credit providers canâ&#x20AC;&#x2122;t later change their mind and try sue you. The matter has already been finalised in court.

Magistrates CourT Can hear all types of debt review matters Cost vary depending on how long the court matter takes Can issue a binding court order, restructuring debt repayments even if some creditors donâ&#x20AC;&#x2122;t cooperate Some courts can delay the process unnecessarily or are still unfamiliar with the process Generally shorter waiting times

Since debt review is a legal process, you will probably also need some legal help from an attorney or from the Debt Counsellor to get the court papers and court order in place. There are small costs associated with the legal side of things that are built into the process but these small costs are worth the peace of mind of knowing you have a real solution in place that everyone has to stick to. Debt Review matters can be dealt with by either your local Magistrates Court or in some cases by the National Consumer Tribunal (NCT). In either case, your Debt Counsellor will need you to sign an â&#x20AC;&#x2DC;affidavitâ&#x20AC;&#x2122; which is a legal document that simply shows that you agree with the repayment plan and really want to pay off your debt through debt review. Most of the time that means you will not actually have to go to the court itself and these papers can talk for you. Ask your Debt Counsellor about what your local Magistrates prefer: You being there in person to say you agree or just these papers.

National Consumer Tribunal Can only hear certain types of debt review matters Less fees Can only grant a binding order restructuring debt repayments if everyone is happy with the repayment plan Aim to resolve filing issues and make applications work Can sometimes take longer - depending on the NCT workload

Paying The Debt Since the amendments to the National Credit Act, consumers can choose one of two ways to repay their debts while in debt review. An organized consumer who doesnâ&#x20AC;&#x2122;t mind the risk and effort it takes, can pay each credit provider themselves according to the Debt Counsellorâ&#x20AC;&#x2122;s plan.

Paying Yourself More work for you Lots of different payment to different accounts Accounts get different amounts each month according to the plan. You have more control You have to be excellent at keeping records You pay normal banking costs to make payments You carry the risk of making mistakes

Alternatively, if the consumer wants convenience and less risk, they can make use of a NCR registered Payment Distribution Agency (PDA). PDAs are an important part of the National Credit Act. Your Debt Counsellor may advise you on what they feel is best for you.

Paying Via A Payment Distribution Agency Less work for you One payment One amount each month to the same account You have to rely on the PDA The PDA tracks everything You pay the PDA a small fee each month The PDAs carry insurance against mistakes

INDUSTRY

CONSUMER

NEWS FLASH For daily debt counselling news in 3 minutes or less visit www.debtfreedigi.co.za

DCRS Floundering

The industry holds its breath as the under promoted DCRS system possibly runs out of funding and support this month. The DCRS computer programme is a way for Debt Counsellors to negotiate with credit providers at the push of a button. The computer system works out if it likes the amount of money set aside out of the consumerâ&#x20AC;&#x2122;s budget and then takes what is left and applies several internal rules to work out how credit providers agree they are prepared to be repaid. The computer system has faced innumerable problems over the years one of which is the high price of looking after it every month. While many larger Debt Counselling firms enjoy using the system it was never promoted among Debt Counsellors and that led to poor uptake by smaller firms. This somewhat defeated the purpose of the system and resulted in no lessening of workload for credit providers (who had serious trust issues about the system anyway). Recently some of the banks have been threatening to cut funding for the system and at least one of the banks has already done so. Though they like the

rules, paying for a black box - which was not making their life easier and cheaper - just doesnâ&#x20AC;&#x2122;t seem to appeal to anyone. Despite the NCR coming out strongly in support of this particular computer programme and a lot of complaining about Debt Counsellors not using the system during 2016, even then no promotion of the system took place. Now with funding drying up, it looks like DCRS could be in serious trouble. It is a cause for concern for many credit providers and Debt Counsellors alike. The NCR seem desperate however to keep the credit provider system alive, for some reason and have been scrambling to get someone to host it and pay the ongoing costs. The NCR recently sent out a suitably vague circular to the effect that they are looking for someone to foot the bill but have not yet found anyone to do so. The major credit providers indicate that they will still accept and consider proposals made along the rules embedded in DCRS going forward since they helped formulate them. The concern is that they may begin to differ on future rule changes which will lead to more inconsistency and longer

NEWS CONTINUED

turnaround times. Fortunately, for now many Debt Counsellors have Excel spreadsheets or other programmes which reproduce the DCRS proposal rules and the PDAs have software in place that can duplicate the DCRS rules, as they stand at present. All that is clear is that the future of DCRS is presently unclear.

Eastern Cape Court Says No To Debt Review Declarator

After the success of the Rijkheer Declaratory Order in the North Gauteng courts and the positive benefits and clarity this brought to the process, the firm of attorneys (Jordaans Rijkheer & Partners) began to bring the matter before courts in other parts of the country. This would allow those courts to issue matching Declaratory orders which would then hopefully smooth the way for debt review in those areas. Despite almost a decade of hearing debt review court cases, it is amazing that many courts still are inconsistent in how they deal with debt review cases. This means that Debt Counsellors and attorneys have to adjust how they draft and present papers in different court rooms around the country. That can be very taxing and can cause unnecessary delays for consumers and credit providers who would like to get clarity

on their matters. Recently, the matter was put before court in the Free State and once again a Declaratory Order was issued copying the Gauteng ruling. When the matter was taken before the High Court in the Eastern Cape however things did not turn out as expected. The Eastern Cape High Court first had to decide whether the Attorneys can actually bring an application for a Declaratory Order. What they were questioning was if the firm of attorneys was evolved enough and had enough of a vested interest in the process that they had the legal right to make a request for a Declaratory Order. After looking at several legal precedents their ruling was that the attorneys did not. As such the matter was dismissed. This doesn’t mean that the court disagrees with the requests and items in the application but merely that they feel someone else (another ‘interested person’) would be better suited to bring such a request.

For daily debt counselling news in 3 minutes or less visit www.debtfreedigi.co.za

NEWS CONTINUED

SA’s Favourite Coming To A Close

Over the last few weeks consumers have been able to cast their votes online for their favourite Debt Counselling firms. Also out for the public to vote on, was their favourite Payment Distribution Agency or PDA. Recently, consumers, Debt Counsellors, attorneys and those working at Payment Distribution Agencies have been able to start to vote for their favourite service providers among credit providers. The aim of the online voting process among our readership is to see who makes emough of an impression on their clients and those they work with that these people will actually spend a minute to click on the poll and vote for these firms. In these busy times getting anyone to take some time and vote for you in exchange for nothing in return means a lot. The voting period is almost over and will close early in February 2017. Once the votes are in the winners will be announced on the www.debtfreedigi.co.za website. The winners will be able to proudly identify themselves as SA’s Favourite Debt Counsellor in their area (or PDA or CP).

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What is Reckless Credit? What happens when a credit provider gives credit to a person who does not understand what is required of them or that can never realistically repay that debt on time? Did you know that courts have the power to write off such debts because they are granted recklessly? “If a credit provider gives a consumer money, knowing that they will probably not be able to repay the money as agreed, then that is reckless” - Annienne Nel of Consumer Debt Support

We asked reckless credit expert, Debt Counsellor Annienne Nel of Consumer Debt Support, who is well known for going that extra mile for her clients, about when credit might be reckless and what can happen as a result. What can happen if a credit provider gives a consumer credit recklessly? A court can decide to either, make the reckless credit provider wait till after all other debt is repaid before they receive a cent or as we have seen in many cases, the court can even say that the debt does not have to be paid at all, ever. What if a consumer doesn’t put every single piece of information on a credit application? Does that mean that the credit can never be reckless? Consumers are only required to fully and truthfully answer the requests for information that credit providers put to them. In other words, if credit providers don’t request certain pertinent information from consumers, there is no legal duty on consumers to disclose that information. Credit providers are experts at financial matters and their staff are very well trained. They use very sophisticated computer programmes to figure out what a consumer can and can’t afford. It is Reckless Credit When: The consumer didn’t get a quotation of what the credit will cost them The consumer did not understand the documents shown about the credit The consumer can’t read the language of the documents about the credit The credit provider knew the consumer couldn’t afford to repay the credit There are illegal requirements in the contract documents

IN A NUTSHELL

Mind Shifting to Re-shape Lives Over-indebtedness affects close to 50% of credit-active South Africans, based on the latest Credit Bureau Monitor report Q2 2016. Compounding this are the recent economic and political factors that have kept South Africa teetering on the precipice of a downgrade. International credit rating agencies have not only played a role in the weakening of the rand but have also contributed to job losses, fuel and food price increases. Over-indebtedness affects close to 50% of credit-active South Africans, based on the latest Credit Bureau Monitor report Q2 2016. Compounding this are the recent economic and political factors that have kept South Africa teetering on the precipice of a downgrade. International credit rating agencies have not only played a role in the weakening of the rand but have also contributed to

job losses, fuel and food price increases. Mix these issues together and you have a perfect recipe for a nation that is struggling to make ends meet against a backdrop of poor economic growth. The most recent Credit Bureau Monitor Report reveals the extent to which consumers are struggling. The number of consumers with impaired records

stand at 9.67 million an increase of 124 000 from the previous quarter. Impaired accounts increased to 20.24 million an increase of 314 000 quarter on quarter.

not only to assist in the management of the debt but additionally to lead the person towards financial stability and wealth creation.

Consumers are often caught unawares particularly in the face of political and economic factors. The attraction of instant gratification combined with poor financial literacy and budgeting skills means that people plan poorly and as a result do not have extra disposable money to address interest rate hikes and increases in the cost of living.

In order to lead people in this direction Debt Counsellors need to build trust through continued engagement. Ideally, you should look at the ‘multiple touch-points’ that present themselves during the debt review lifecycle. At these ‘touch-points’ identify ways in which you can listen, educate, build credibility and provide the financial advice needed to retain your clients.

By the time consumers approach a debt counsellor they are already deeply trapped in the snares of debt. However, it is at this stage that a crucial and significant opportunity arises for debt counsellors. Over-indebted individuals have dreams that extend beyond the debt review lifecycle. With each overindebted individual lies the opportunity

Debt Counsellors have the opportunity to become the long-term financial advisors and planners that South Africans need. It’s a mind shift from debt management to wealth creation. Tough economic times, call for innovative thinking, which will lead towards longterm economic upliftment.

IN A NUTSHELL is brought you by the DCM Business Partnership Programme™, designed to support debt counsellors and consumers during the debt review process, in collaboration with the National Payment Distribution Agency (NPDA). For help, contact the NPDA on 0861 628 628. If you have suggestions for topics that you would like covered in future, please email info@dcmgroup.co.za Debt Review Awards Winner 2014 and 2015: NPDA: Payment Distribution; Client & Customer Service; Industry Support & Engagement Care Premier: Debt Counselling Software

Professional Debt Counselling Attorneys

T e l : 021 872 1968 1 1 MARKET STREET, PA ARL w w w. ste y nco etze e.co.za

Becoming Debt Free The debt review process is very useful when times are tough and you cannot afford to pay each creditor what they are owed every month. Debt review makes it possible to repay a reasonable amount every month to help reduce your debt bit by bit. The goal of every debt review is to pay up the debt and become debt free. This means that a consumer can then re-enter the credit market with a clean slate, better equipped to manage their future credit use. Some people are able to leave the debt review process after a short time because they begin to earn more money. This means they no longer need debt review. With the help of their debt counsellor they make arrangements with all their creditors to resume normal payments and credit use.

debt counsellorâ&#x20AC;&#x2122;s plan and court order and eventually pay up all their debts. They are then also debt free. Either way, whether ending early or according to the plan, the debt counsellor will help the consumer with the appropriate paperwork perhaps including a clearance certificate which shows which debts are paid. This information is also updated at the credit bureaus, who then remove any relevant information about the consumerâ&#x20AC;&#x2122;s debt review and debts.

Getting out of debt is a big deal. Very few people are able to say they are debt free. By sticking to the debt counsellorâ&#x20AC;&#x2122;s plan and never missing payments, consumers will be able to use the debt review process to not only repay their debts but learn to better manage their finances. This training Other consumers are, over time, able helps them to build a better financial future to repay their debts according to the for themselves and their family.

donâ&#x20AC;&#x2122;t be a twit

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Communication Communication Communication Communication is well defined as “the imparting or exchanging of information by speaking, writing, or using some other medium.” Debt Counsellors are independent intermediaries, trying to find a good solution for a difficult situation. Because the Debt Counsellor is in the middle, excellent communication with both Consumers and Credit Providers is of paramount importance. Let’s have a look at all of the different ways and times that Maximus makes communication easy: MARKETING Before you can communicate with a lead you need to know about them. For companies using an acquired leads strategy, Maximus provides users with a comprehensive Leads Management System. This system enhances communication by providing: • Inbound lead referral by uploading list or by host to host communication. • Capability to email or sms leads. All communications are recorded in the system. • Call recording of all outbound calls using the Teleforge add-in. Of course, the sms, email and telephone capabilities are there throughout the system and are available for the Consumer’s life with the Debt Counsellor. THE CONSUMER From the time that the Debt Counsellor accepts the case and sends out the Form 17.1, Maximus communicates with the consumer via SMS and e-mail, informing him or her of the progress of their case. For example, when proposals are sent, Maximus lets the Consumer know that the Proposal has been sent. In the latest enhancements, Maximus also provides Debt Counsellors the opportunity to communicate by SMS or in beautiful, rich HTML e-mail to any group or all of their customers with just a few clicks. The system provides a good stock of standard SMS and e-mail communication templates and Debt Counsellors can create their own exclusive templates.

CREDIT PROVIDERS Maximus automatically sends out all of the forms and proposals that are required to complete the Debt Review Process. Statutory and Task Team forms go without saying, but because Maximus is written by and for Debt Counsellors, there are extra documents that can be sent at a click. Some of these are: • Form 17.5: Announces to Credit Providers that Negotiations are over and that the matter is proceeding to the Court or Tribunal. • Form 17.6: A General Notice to Credit Providers that can be used, for instance, if the Consumer is deceased. • Reckless Credit Letter: Used when reckless credit is suspected to request further documentation from the Credit Provider • Termination Response letter ...and many more. As if this is not enough, with the latest enhancements, just as can be done for the Consumer, Maximus enables Debt Counsellors to create their own templates to communicate specific messages to Credit Providers. THE NCR Maximus helps the Debt Counsellor to report to the NCR by producing the NCR reports for the Debt Counsellor on a quarterly basis. All that the Debt Counsellor must add to the report is his or her Reckless matters and a signature. Snap! Form 42 done in 10 minutes. MAXIMUS Maximus users are the reason that Maximus exists, and the Maximus team is available to help in whatever way necessary for the Debt Counsellor and their unique circumstance. Every single query or request for assistance is carefully logged and followed up on. Communication is by e-mail or phone, and Maximus users consistently rate the team around 95% for customer satisfaction. The team use TeamViewer to assist the user with their query, whilst training them at the same time. Maximus provides users with excellent manuals and training, all with the aim of empowering the Debt Counsellor to Communicate both effectively and efficiently with all of their stakeholders. Next month we look at the information you need to run a successful practice.

Contact Maximus on 011 451 0041

Debt Counsellors Associations Announcement Board

The First NEC meeting will be held on Tuesday the 7th February 2017 Regional Meetings Western Cape Kwa-Zulu Natal Freestate

21/02/2017 16/02/2017 10/07/2017

FNB has been checkmated in Court: http://www.acts.co.za/news/blog/2016/12/fnbcheckmated-in-securitisation-case

The Date of the DCASA Annual Conference is Wednesday the 16th August 2017

www.dcasa.co.za

1. The Executive committee will hold its first meeting by end of March 2017 2. The main focus in 2017 is on ensuring that all BDCF members comply with all legislation, regulations and conditions of registration. 3. Our communication channels will be strengthened to enhance accessibility by members. 4. Special projects will be launched around April in areas such as Incapacitation or death of DCs, usage of PDAs by consumers, as well as fees. 5. Members and supporters will be fully engaged when the projects are launched to ensure maximum input and participation. We wish all Debt Counsellors the best for 2017!

www.bdcf.co.za

www.newera.org.za

Our Annual General Meeting will be held on 9th February 2017 in the Western Cape. Check the Facebook group for all the details on how to link in if you are not in the Western Cape.

www.allprodc.org

JANUARY

NEWSLETTER 2017 We are confident that 2017 is going to be a good year for our members. Sadly, it looks like it is going to be a tough year for consumers. Fortunately, we will be there to help consumers through the rough road ahead. This year there are a number of important developments coming for the industry and we plan to contribute as an association as much as possible. We encourage our members to continue to make good use of the Facebook group, to attend and host local meetings and we wish all our members the best for 2017. Annual General Meeting We look forward to holding our AGM on the 9th of February. The AGM will be held in Cape Town this year. All members are welcome to attend. We will have the chance to discuss the last 12 months as well as the year that lies ahead. We will also get the chance to discuss the various roles on the NEC and other teams who will concentrate on certain key issues this year. Members who are from further afield will be able to log into the meeting online. Please check on the AllProDC Facebook page for more details at the start of next week on how to do that. It is fairly easy and can be done from your computer or other internet active devices. NCR & CIF We plan to correspond and meet with the National Credit Regulator in regard to CIF participation and the issues surrounding CIF which we raised last year when the boycott began. It is our goal to find solutions with the regulator rather than get stuck at an impasse. Once the AGM has been held we will be able to approach this with fresh determination and a clear agenda from all our members.

www.allprodc.org

FACEBOOK: www.facebook.com/AllProDC / TWITTER: www.twitter.com/AllProDC

FINWISE - Innovative Debt Management Program

No monthly program fees! Accessible on PC or Desktop

• • • • •

Excellent audit trail Workflow management Easy to navigate functions Quick data capturing DCRS and standard proposals accommodated.

‘’ I was pleasantly surprised by our experience and changeover to Finwise. The new system is intuitive and easy to understand.‘’ Debt Counsellor Eastern Cape ‘’ I’ve found the Finwise system to be very useful. I’m new in the debt counselling field, I managed to find my way around the system as it is very user-friendly. The training manuals provided are also helpful and informative.’’ Debt Counsellor Gauteng

BUSINESS SUCCESS - THE “GO-GETTER” APPROACH Various things like good financial management and quality products are vital to run a successful business. Human capital, however, is the driving force in any business and can make or break a business. Looking at successful businesses, they are high energy and the staff are passionate, motivated and believe in the business objectives. The ‘’go-getters’’ see opportunities in every situation and when interacting with clients, they instill trust with the positive image they deliver about the organizations they work for. Persons with a ‘’can do’’ attitude are needed in all walks of life, the ones who say yes to change because change means growth. What kind of business leader or person are you? Challenge yourself to be a go-getter with a can do attitude and align your company with businesses practicing the same good conduct. Some Qualities of the ‘’Go-Getter’’ • The go-getter attitude does not hesitate; he/she thinks, when do I start? • The go-getter attitude does not ponder whether he/she can, they know they can get it done with collaboration and action. • The go-getter believes in him/herself, and the company. He/she believes in the times ahead and wants to be a key part of it. • The go-getter sees continual change as a recurrent opportunity. • The go-getter only knows one way of doing and living: with bravery, self-assurance, passion and integrity. Why settle for less? DC Partner is positively orientated towards change, growth, industry development, product enhancement and delivering high quality customer service. Article by: Petro de Beer

Say yes to change, say yes to a company with a ‘’Can do Approach ‘’ and a ‘’Go-Getter team’’!

Head Office 59 Victoria Street, George Telephone 044 873 4530 Fax 086 246 2450

www.dcpartner.co.za

Nedbank V Jones Did this case change Debt Review forever?

Every now and then a court case comes along that changes the way that debt review is done. For example, back in 2009, when chaos ruled in the industry, the NCR went to court and asked for a Declaratory Order to find out if matters had to go to court or not. The ruling came back and said: Yes, debt review matters must go to court (at some point). The ruling also helped organize the process somewhat. There have also been supreme court rulings about the process which made everyone start doing things in a different way. Now an interesting ruling in a Nedbank matter has some people saying that the whole way debt review has been done over the last few years was wrong. One of the things that happened in this case, is that the court made an order that says courts must not issue orders which change the interest rate on debts since that is not one of the powers given courts by the National Credit Act. The ruling also said that no court orders can be issued where the monthly repayment does not cover the interest portion of a credit account since it doesn’t meet the purposes of the NCA (eventual satisfaction of a debt).

‘immediately people have called this ruling into question’ Now, immediately people have called this ruling into question. For example: Does allowing a debt to grow to be limited by NCA Section 103(5) not meet the purpose of the Act? If Section 103(5) of the Act is an integral portion of the Act (this is the

section that only allows a debt to double if you miss payments) then allowing payments less than the interest portion would not conflict with the purpose of the Act. Would it? Regarding rearrangement of a debt with reference to the interest portion -The question is: can two responsible parties to an agreement not agree to a reduction or change to that agreement? Part of the issue here might be that perhaps the original agreement is not ever actually amended and some creditors see the debt review court order as sitting separate to the original agreement. Some Debt Counsellors are worried that every court order ever issued is invalid and that consumers are at risk. They worry that Nedbank may now go and undo any court order where an interest rate was changed for any reason.

We Asked Nedbank

Debtfree Magazine spoke to Nedbank and asked them (1) why they took the matter on and (2) what they hoped to accomplish? The answers may not be what you expect. DF: What is Nedbank Debt Review Departmentâ&#x20AC;&#x2122;s intention toward interest rate reductions? Do you have any problems with agreeing to changed rates (for example through DCRS)? Nedbank: Nedbank Ltd is committed to responsible debt counselling and, as one of the main signatories, remains steadfast in our commitment to the Task Team agreement. It has always been our position that, in many circumstances, the relief afforded in terms of the National Credit Act, 2005 does not always provide sufficient assistance to our over-indebted clients. For this reason, within industry agreed standards, Nedbank Ltd continues to grant interest rate concessions and has no plans to discontinue this practice. DF: Would you like to comment on the Jones ruling and the intent behind the matter? Nedbank: There were two reasons behind the bringing of the Jones application. The first reason is that there are a few Magistratesâ&#x20AC;&#x2122; Courts that are of the view that a

debt review order cannot be rescinded or varied. This is patently incorrect in terms of the rules of the Magistratesâ&#x20AC;&#x2122; Court Act and is something that has plagued not only Credit Providers but Debt Counsellors and Consumers alike. The second reason for bringing the Jones application was to address the practice of unreasonable proposals. Anyone who has been in the industry for any length of time will know that there was general confusion in the early years and many of the re-arrangement proposals and court orders did not make any economic sense. By and large, the industry has developed and grown and, with the buy-in and interaction of all the industry role players, we have all matured and improved the way that we handle debt review matters. There do, however, remain a few pockets of resistance within the industry. We cannot force parties to negotiate in good faith or to adhere to industry standards, they always have the recourse to the Courts who then have to adjudicate the merits of the proposal placed before the Court. Our intention behind bringing the Jones application was to ensure that the Courts who adjudicate on these matters have a clear understanding of what their powers are with regard to debt review matters. Specifically, many industry parties have been concerned about the practice of reducing interest rateswithout Credit Providerâ&#x20AC;&#x2122;s consent, fixing interest rates, particularly on bonds, for unreasonably long periods of time and ordering the client to pay unreasonable installments that do not even cover the monthly interest due on the credit agreement. These practices very often lead clients into a worse financial position than what they were at the time that they entered into the debt review process. DF: So, do you feel that rates can be reduced at all? Nedbank: There appears to be a view in certain Courts, following the Norris and Jones judgments, that debt review orders cannot be granted where the Credit Provider has agreed to the reduction in the interest rate. We respectfully disagree with this position. We do not believe that courts should be making orders in respect of interest rates in any shape or form. If a Credit Provider agrees to a reduction of the interest rate, that is an agreement between the parties and the Court can note that such agreement exists but it is not for the Court to adjudicate the issue of

interest. Where the Credit Provider and the other parties have not entered into a rearrangement agreement, the contractual interest rate will apply and a reasonable instalment to solve the debt must be offered. ‘Nedbank Ltd would like to assure our clients and all industry role players that we remain dedicated to assisting our clients to lighten the burden of financial distress.’ Nedbank Ltd would like to assure our clients and all industry role players that we remain dedicated to assisting our clients to lighten the burden of financial distress. Not only do we pro-actively support and encourage debt counselling for clients who can benefit from this process but we also have numerous other projects and programmes aimed at ensuring the financial well-being of our clients. Our resolve to support our clients through times of financial difficulty and our commitment to the debt review process remains unchanged.

The Real Issues

So, it seems that Nedbank’s real issue was where courts had changed interest rates without Nedbank agreeing to do so, like in the Jones matter when the original court order was granted. Where they do agree actually to changing the interest rates, they have no problem whatsoever. They say that, while the NCA doesn’t say a Magistrate can just change interest rates by themselves, it is possible for two parties to make an agreement. This agreement can be ‘noted’ in the court order but not specifically ordered. For example, it might be shown on a list showing the repayment plan from the Debt Counsellor. They don’t feel a court can rule on anything about interest rates or refuse to rule because interest rates changes are shown. They want courts to stick to ordering the changes allowed in the NCA and operating according to normal MCA rules otherwise.

‘It does however, show that Nedbank do not intend to go and try undo every court order issued since 2009 which features an interest rate change agreement.’

So, Nedbank see a clear difference between (a) making an order to change rates and (b) simply making a note that the parties have agreed to do so. Is this just a case of semantics? Perhaps. It does however, show that Nedbank do not intend to go and try undo every court order issued since 2009 which features an interest rate change agreement. Some say the simple solution is to not mention the interest rate in the prayers and to simply show the agreed repayment amount and term of repayments. The interest rates can be sorted out in the background between both parties. The big question is, despite what Nedbank think: Does this court case mean that all previous debt review court orders where changes to interest rates were â&#x20AC;&#x2DC;notedâ&#x20AC;&#x2122; are invalid? We will soon see what happens and if many magistrates feel that this is the case, then this matter may have to be elevated to even higher courts for further clarification. Already courts in the Western Cape have started to reject applications based on this ruling and though still isolated, this is troubling. This matter may call for the NCR and other parties, like the Debt Counsellors associations, involvement in a hurry in order to protect the hundreds of thousands of consumers involved.

All professionals have professional indemnity if the unforeseen happens. Do you as a professional Debt Counselor have professional indemnity as stipulated by the ethical code?

086 111 2882

Telephone 0861 112 882 Facsimile 086 605 9751 Mobile 082 449 6856 EMAIL andre@in2insurance.co.za

www.in2insurance.co.za

MELIORLEAF WONâ&#x20AC;&#x2122;T LOAD YOUR PREMIUMS OR REPUDIATE A LEGITIMATE CLAIM Specialist insurance for people in debt review. Ask your debt counsellor.

CALL US NOW 0861 635 467 www.meliorleaf.co.za

JOB

apply for your Join the Meerkat Team An exciting place to work! Meerkat are looking for:

Frontline Agents, Collections Agents, General Administrators, to join our energetic team.

This is a great opportunity to become part of a fast-paced, high growth and professional debt counselling environment. If you are looking for a company with an entrepreneurial spirit at its heart, and are keen to join a dynamic, hardworking but fun team contact us. We would love to hear from you! Mail us on info@meerkat.co.za

MyMeerkat (PTY) Ltd. Meerkat is an authorised financial services provider (FSP 46535)

dream job now Debt Review Sales Manager Job type: Full-time Location: Northern Suburbs, Cape Town, Western Cape The successful candidate will have substantial current experience in the Debt Counselling industry and understand all processes. Key requirements: • Proven successful track record in debt review sales management including lead generation and online marketing with a good understanding of major marketing channels • Above average marketing and sales skills • Sound debt review knowledge and experience • Accounting knowledge and experience Key performance areas: • Responsible for developing sales channels and maximising sales opportunities • Grow and develop the sales team • Monitor the performance of sales to provide management with an analysis thereof • Assist in developing sales scripts, training and workflows • Monitor sales team for quality assurance, improve deficiencies and build on the strengths of individual performers to optimise sales. • Monitor and report on marketing communications • Analyse sales and marketing trends to make better informed decisions • Responsible to lead, guide, develop, support and manage a team of debt review agents, ensuring compliance with industry codes and adherence to operational requirements, processes and systems. We are offering a top salary commensurate with proven ability as we require an exceptional individual. Please email CV to info@debtenders.co.za

“ It always seems impossible

until it is done”

- Nelson Mandela

Specialist Attorneys dealing with Debt Review matters Magistrates Court and High Court Matters Tel 021 913 2514 Fax 0866070940 Email info@liddles.co.za PHYSICAL ADDRESS 7 Chenin Blanc Street, Oude Westhof Postal address PO Box 3407, Tygervalley, 7536

Debt Counsellors Care Group

You handle the front office and we will handle the behind the scenes admin work for you. For More Info On How We Can Help Your Debt Counselling Practice Be More Profitable CLICK HERE

DEBT COUNSELLING COMMUNITY SUPPORT DCCS want to thank DCM and NPDA for their generous contributions and support. With their help we were able to not only distribute needed end of year holiday hampers to deserving debt review families but also Back To School hampers to several families. DCM and NPDA have been consistent supporters of the DCCS projects and have made a big difference in the lives of several vulnerable debt review consumers since we began.

DEBT COUNSELLING COMMUNITY SUPPORT

DCCS are already planning our next campaign. If you know of worthy community projects or projects launched by consumer sunder debt review please let us know. We would like to help spread the word. If you are a Debt Counsellor and have consumers who would benefit from additional support which would enable them to stay in the debt review process please let us know.

Check out our website for pictures, stories and more and as always if you would like to get involved in one of our projects (like our back to school project for Jan) then we ask that you simply email admin@dccsupport.co.za

Service D

click the ca

Debt CounsellORS

Support services

TRAINING

FINANCIAL

FINANCIAL PLANNING