Debtfree DIGI May 2015 by Debtfree Magazine

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

May 2015 www.debtfreedigi.co.za

CONTENTS EDITORS NOTE

NEWS

THEY ARE COMING TO TAKE MY CAR

DEBT REVIEW AWARDS NOMINEES

SERVICE DIRECTORY

Dear Debt Counsellor

The last piece in the puzzle to Debt Counsellor cash flow & profitability Hyphen PDA has developed to be the undisputed, number 1 Payment Distribution Agent in South Africa in terms of the number of active Consumers, the total collections from Consumers as well as the total value of distributions made to Credit Providers on a monthly basis. Number 1 in all facets of the Debt Counsellors’ core requirements and their needs of a PDA. Hyphen PDA is a division of Hyphen Technology (Pty) Limited. Hyphen Technology offers a simpler way to manage financial transactions. Providing cash flow management solutions tailored to the Clients’ specification that will enable improved operational efficiencies and reduce risk and costs irrespective of their banking affiliation. Hyphen Technology boasts the cream of the crop in its Client base. Similarly, the PDA has an eye catching Client base, which is the envy of our competitors and we are able to offer any number of extremely credible references for Debt Counsellors to validate. Hyphen Technology is wholly-owned by FirstRand Investment Holdings Limited, which exclusively houses all the non-banking interests of the FirstRand Group. Sound financial standing, stringent compliance and good governance practices are the cornerstone of the business, This offers unquestioned safeguards for Consumer monies collected for distribution. The financial standing of the Company is such that in the unlikely event of a fraud or a natural disaster, Consumers monies can be refunded without any reliance on fidelity insurance (which is available in any event). The PDA continually receives audit reports from the National Credit Regulator which state that no adverse findings can be found against Hyphen PDA. The PDA system, specifically developed for Debt Review matters and the Hyphen Technology payment system, used in Hyphen’s core business, operate off the same platform - the two systems are fully integrated. This means that, unlike other PDA’s, Hyphen PDA does not have to in-source bank payment systems and transfer files and data between two independent

and totally unrelated systems - this in-sourcing increases the risks associated with handoffs and possible resultant payment and reconciliation failures. The unrivalled benefit for the Debt Counsellor Client base is that they don’t have to continually query the status of payments or collections or unnecessarily request a Proof of Payment from the PDA which the PDA has to obtain from its Bankers after a time delay. In fact, if so required, a Proof of Payment is made available immediately on demand. With Hyphen PDA, the system works when it is supposed to - not some of the time, but all of the time! No excuses, no delays, queries, frustration or multiple requests! Importantly, Hyphen focuses on the profitability of its Debt Counsellor Client base - that is what we are about! Our whole philosophy is that if the Debt Counsellor is not financially profitable, then it is unlikely that the Debt Counsellor will succeed in helping its Consumer Clients optimally. The key driver of Hyphen’s PDA offering is its Cash Flow Toolkit which enables the Debt Counsellor to increase the success of its collections and as a result, its own cash flow through fees which are brought to book earlier. This toolkit is a unique offering of various aids and tools to assist Debt Counsellor strategic decision making, it is pre-emptive, rather than reactive to the Consumer mix or individual Consumer payment habits. Hyphen PDA has the highest success ratio in the Country using all available collection channels for the convenience of the Consumer. Some of Hyphen PDA’s seasoned Debt Counsellors are achieving outstanding collection success rate of 90% on their overall portfolio. When requested to do so, the PDA Executive serves in an advisory capacity to the Directors of a Debt Counselling Company in order to singly focus on the success of the enterprise and to keep the Company abreast of industry Developments and Opportunities. The PDA boasts the fact (humbly, we might add!) that it has an unrivalled and phenomenal record for having an insignifi- cant amount of “Unidentified” funds from Consumers in its suspense account. After 6 years of operations, the PDA has less than R200,000 in unidentified funds, as declared in its official statements to the NCR, which is certainly not the case with rival PDA’s. This is Hyphen PDA’s testimony to its operational excellence. Unidentified funds are defined as funds belonging to a Consumer who cannot be traced because of Consumer mistakes with deposit referencing which bypassed the PDA’s controls to avoid this. Hyphen’s reporting to its Debt Counsellors, Consumers and Credit Providers is of the highest standard, it is immediate, appropriate and always on-time, all the time!

Hyphen PDA validates account numbers and references (primarily Banks) prior to making payments of any sort. This obviates monies being paid repeatedly over the payment channels, any payment failures and returns and ultimately landing up in a suspense account or worse still, being lost! Hyphen PDA has an exceptional Support Centre to assist our Client base, which gives Debt Counsellors the comfort that they will receive a same day response, everyday, to every query. Our staff are meticulous and knowledgeable in the payments arena. We are proud of the number of staff members who have a tertiary education and who are employed within the PDA. The leadership body of the PDA consists primarily of qualified ex-Bankers who, by profession, are seasoned payments experts. Hyphen PDA also supports its Consumers through making Consumers Statements available on its Portal, ready for viewing or download at the click of a button.

Debt Counsellor System Our Debt Counsellor System is the most important tool of the trade that any Debt Counsellor can have - it is singularly the most important investment that any Debt Counsellor can make, and the most important asset they can hold, lack of which has probably been the ruin of many within the industry - historically, the demise of the African Bank PDA and CPE with their systems caused untold hardship to many Debt Counsellors and Consum- ers. Our business partner, Bitech, with their Simplicity system is unrivalled. Simplicity has over 50,000 active Consumers on the system. Bitech is fully funded and supported by Hyphen PDA and Hyphen therefore stands fully behind the Company, its owners and operations. The Simplicity Value Proposition is explained in more detail below. The founding member and owner of Bitech is a very skilled computer programmer who has an exemplary track record and who also lectured in programming. The benefit is that the Simplicity System is a Debt Counsellor system developed over 8 years by Bitech for Debt Counsellors, based solely on requirements originating from Debt Counsellors. In other words, any development done was on a â&#x20AC;&#x153;needsâ&#x20AC;? basis and not developer prescribed! Simplicity comes at an affordable price and its pricing structure is tiered especially with new Debt Counsellors in mind. That being said, the biggest Debt Counsellors in the Country also use the system. Simplicity is in a state of continuous development and is fully synchronised with Hyphen PDA, which means that the status of every transaction at Hyphen PDA is reflected on the Simplicity screen on a near time basis.

Importantly, the Debt Counsellor owns the debt review data since the data resides on the Debt Counsellor’s computer server. Unlike other PDA’s, the Debt Counsellor can therefore never become a “prisoner” of a specific PDA without the option of being able to select a new service provider which has been necessitated for any number of reasons such as bad service, repeated payment failures, lack of innovation or customisation. The reason for this is that in the case of other PDA’s the data resides on their server and you, the Debt Counsellor, is totally at their mercy! Simplicity is, functionally, the richest Debt Counsellor software in the Country. The software is leading edge in terms of its independent modules which are: leads management, operational and task management adding to the overall efficiency of the Debt Counsellor’s operations, Client management proposals which are generated using all the available methodologies including the DCRS (Simplicity is at the forefront and the largest user of DCRS), Payment Plan Management which mirrors Hyphen PDA, Credit Provider Management (which is the best in the Country since there are no duplications on the Credit Provider database), file storage, which means that in the extreme the Debt Counsellor does not have to even open a paper trail, a legal suite which enables the Debt Counsellor to rapidly customise or change its legal suite of documents and finally, customised and re-usable Customer reporting of any nature that the Debt Counsellor may require at the press of a button. Simplicity creates efficiency - be prepared! This means that the Debt Counsellor’s resources are not squandered on inefficient, time wasting activities! This leads to a lower cost for the Debt Counsellor operation. The layout of the screens promotes rapid click and sort and a columnar presentation of data as well as other rapid single click views together with immediate change facilities. The capture of data is the fastest within the industry since auto prompts eliminate many of the typical search fields found in software applications. Bitech provides phenomenal support facilities. They provide Online Training and Help facilities in terms of systems videos (only specific items have to be interrogated), team viewer assistance to help any capturer or user with immediate assistance. Bitech also provides on-site training - by request and appointment - or alternatively training at Hyphen PDA offices. Simplicity is unbeatable in terms of its functionality, user presentation, usability, efficiency and Debt Counsellor Management. Yours sincerely Chris van der Straaten, Hyphen PDA Lets talk: +27 82 557 0437, cvanderstraaten@hyphen.co.za Hyphen PDA works right, all the time - not just some of the time! We’d love to have you as our Client.

www.hyphen.co.za

EDITOR’S NOTE The crazy short weeks of long weekends and public holidays are now behind us. Ahead lies cold weather and the danger of drinking too much hot chocolate, eating too much comfort food and not being active enough through winter. Beware! Extra weight - like debt- can be easy to put on and not so easy to get rid of. To quote half the cast of GoT “winter is coming”. As the weather cools normally our electricity bills go up and with Eskom trying to get us to pay more than ever for their services it looks to be a long winter indeed. Rising costs are seeing more and more people turning to debt review to try service their debt responsibly while still being able to cover their normal day to day costs. Starting the process can be a really stress relieving time. Though it involves big changes it is quite exciting. This issue we have a look at when the excitement wears off and you seem to be in the grind. If you are in this place in your debt review be sure to read the article. We have recently been getting a lot of requests for info on what to do when people call you claiming to be a sheriff and saying they have to take your car for safekeeping. We discuss this and what to do when you get such a call. We also have lots of industry news about the NCR, securitisation and more. With under a month to go till the 2015 Debt Review Awards, excitement is running high here at Debtfree. The whole team is helping

organise the event. This issue we get a first look at some of the nominees. These are the top companies country wide who are making a good name for themselves and the industry. Each year the Award winners are announced at a red carpet evening Gala event. This year the Gala is being held in Gauteng. Guest and speakers from all over the industry and all the nominees will attend dressed up all smart and hopefully go home with a Golden Piggy Bank in hand. We are really excited to be part of the organising team. The results of the public voting poll about who your favourite service providers are will also be announced on the night. More about that in this issue. So enjoy the issue, and wrap up warm, keep an eye on how much you spend, eat and pay off. Who knows, this could be the last winter before you manage to get debt free.

CreDit ProteCtion – Debt review Applied to go under debt review? Why not insure all your accounts on the One Credit Protection? we will contribute towards your accounts in the event of the following: Death – we settle the account temporary Disability – we pay the Debt Review payment for 6 months Permanent Disability – we settle the account Critical illness – we settle the account retrenchment – we pay the Debt Review payment for up to 9 months

Debt

At a rate of R 3.25 per R1000, our rates are among the best and our benefit structure is the best in the market.

CREDIT PROTECTION – DEBT REVIEW Applied to go under debt review? SinGLe Joint Why not insure all your accounts on the One Credit Protection?

AMoUnt inSUreD

R 5 000,00

R21,25

R26,25

R86.25

R111,25

Benefit structure: Death – WeR37,50 settle your insured accounts R47,50 directly R10 000,00 Temporary Disability – Debt Review payment for 6 months to your PDA R15 000,00 R53,75 R68,75 Disability – We settle your insured accounts directly Critical Illness – We settle your insured accounts directly R20 000,00 R70.00 R90,00 Retrenchment – Debt Review payment for 9 months to your PDA

R25 000,00 R30 000,00 R35 000,00 R40 000,00 R45 000,00 R50 000,00

Marijke Wessels R102,50 R132,50 Portfolio Manager, Gauteng, KZN & Free State Mobile 082 729 3833 Email marijke.w@one.za.com R118,75 R153,75

R135.00 Sam Haasbroek

R175,00

R167,50

R217,50

Portfolio Manager, Western, Eastern Cape & Northern Cape R151.25 R196,25 Mobile 082 550 7294 Email sam.h@one.za.com

www.one.za.com

082 729 3833 marijke.w@one.za.com Ensuring uninterrupted Debt Review protection Terms & Conditions apply terms & conditions apply

ONE Financial ONE Services Holdings (Pty) Limited Reg Reg no: no: 1998/005199/07 Financial Services Holdings (Pty) Limited 1998/005199/07 is a juristic representative One Commercial Motor and Liability (Pty)(Pty) Ltd.Ltd. FSP: is a juristic of: representative of: One Commercial Motor and Liability FSP:8783 8783 by Absa Insurance Risk Management Services Ltd. Ltd. UnderwrittenUnderwritten by Absa Insurance Risk Management Services A Division of

INDUSTRY

CONSUMER

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

NOMINEES ANNOUNCED

and up it is anticipated that the review will see The Debt Review Awards is an awards program fees increase slightly. which recognises excellence in the field of debt review. The Awards happen mid year each year and look at who has been doing particularly NCR SEEKING DECLARATORY well over the last 12 months. Industry Panels ORDER OVER AUCTIONS consider companies and announce the top Though BASA have stated that auctions of candidates at present in SA. The various Panels assets is a last recourse for their members in discuss Debt Counsellors, PDAs and Credit getting funds back from consumers the NCR Providers of all sizes. In the Month leading up are forging forward with an application for to the Debt Review Awards gala the names a Declaratory Order to say whether creditors of the nominees are announced. Winners are can sell assets for tiny portions of their worth. announced on the night of the gala. The Debt Armed with horror stories of homes being sold Review Awards nominees can all be found on on auction for as little as R10 or other ridiculous non market related prices the case is expected www.debtreviewawards.co.za to place a further burden on credit providers to get a market related (not just â&#x20AC;&#x153;fairâ&#x20AC;?) amount NCR DELAY IN ANNOUNCING back when selling assets on auction. Similar cases elsewhere in the world have resulted NEW FEE STRUCTURE Several months ago the NCR were ordered in in banks having to write off or pay back large a judgement to do as the National Credit Act amounts of funds to consumers whose assets demands and review the Service Fee Structure were sold for a pittance. for credit providers offering credit. The NCR were allowed 9 months to do so. Time flew by and the NCR failed to meet the deadline. Unhappy with the delay Micro Finance South Africa (MFSA) went to the North Gauteng High Court and got the court to order the NCR to obey the previous courts ruling and do the review. The NCR were given a deadline of the end of May 2015 to review the fees before. Since the fees have remained the same for years and years while inflation has gone up

ABSA SETTLED ACCOUNTS STILL LISTED

Despite recent regulations and amendments to the NCA about the removal of adverse information on consumers accounts when they are paid off or settled up, ABSA have responded to Debt Counsellors and consumers that the only information they are willing to remove is erroneous or duplicate listings (as per NCA

Switch to easy

• Individual, dedicated business bank account per Debt Counsellor • National Representation - regular office visits by skilled, trained agents • 24 hour access to system, including distributions data - from any PC, cell phone or tablet with internet access • Dedicated account managers for EACH Debt Counsellor Gerhard Dyzel gerhard@dcpartner.co.za 082 828 7595 / 044 873 4532 (ext 110) Yolandi Meyer pda25@dcpartner.co.za 082 338 2680 / 012 348 7624 www.dcpartner.co.za

NEWS CONTINUED Sect 70(2)(d). Debt Counsellors are referring were able to deposit loans into their Grindrod Bank accounts. The compliance notice said the matter to the NCR. that Moneyline and CPS had to change the way they do business and have an audit done showing they had sorted out the issue. Both AFRICAN BANK’S NEW CEO African Bank curator Tom Winterboer has Moneyline and CPS (with the backing of Net 1, announced the name of the new CEO of African their parent company) came out swinging and Bank (the good bank). Mr Brian Riley has been denied that they were doing any such thing appointed to the post to try help African Bank or that they were breaking the National Credit get back on it’s feet. Mr Riley formerly worked Act. They went into the press and made strong at Wesbank as CEO until he retired. Mr Riley statements about the matter. holds several diplomas and qualifications to do with management. He started with Wesbank The case recently went to the National Credit back in 1988 and retired in 2013. He also Tribunal (who rule on such matters) who threw previously worked at Lloyds, Scottish Finance the compliance notices out. Moneyline and CPS Group and the Provident Financial Group. He are very happy about this, of course. This is a big was born in the UK but has called SA his home deal because the NCT have basically indicated for many, many years. Mr Winterboer has been that the NCR were wrong in their findings. quoted as saying he is “thrilled that Brian has Equally as obviously the NCR are not happy. They accepted this position”. Mr Riley will now join have since rescinded the compliance notices. former ABSA deputy group chief executive Following the original investigation the NCR Louis von Zeuner as the second appointee to also made an application to the National Credit the leadership of African Bank’s “good” bank. Tribunal to also deregister Moneyline because Acknowledging the hard work ahead Mr Riley they were not obeying the National Credit says: “My first challenge will be to mobilise the Act. This means that Moneyline would have to Bank’s existing resource base into a defined shut its doors and all the staff would lose their strategy that can sustain Good Bank over the jobs etc. Recently however the NCR has tried to change it’s application to the NCT (maybe short to medium future,”. because they got blown out of the water on the issues raised in the compliance notices). The NCT are now holding a special hearing to NCR COMPLIANCE decide if the NCR can do so before they then NOTICES SHOT DOWN The NCR conducted an investigation into consider the application to shut Moneyline credit provider Moneyline Financial Services down or whatever the NCR now asks of the and Cash Paymaster Services (CPS) and then tribunal. In the past the NCR has often come issued two compliance notices demanding to a settlement with companies it is taking to that the companies change the way they do the NCT – such as happened with African Bank business. The NCR said that Moneyline were in regard to reckless lending (before the banks getting information about the spending share collapse which only happened later)- prior patterns of people getting social grants and to the matter being heard. This does not mean

“ 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

NEWS CONTINUED the NCR is scared of fighting the matter out at the NCT however. The NCR have successfully had some Debt Counsellors and small credit providers deregistered by the NCT in the past. This recent matter with Moneyline and CPS has however not been a great result for the NCR who continue to fight to find their place in the ongoing developments surrounding the twin peaks regulatory process.

AFRICAN BANK DRC’S NEW OPERATING HOURS

Currently African Bank is undergoing a lot of internal changes as they restructure their operation. This will effect their debt review department as well. In a new circular African Bank has announced that their debt review department will only be taking calls between 8am and 3pm. This change took effect as of Monday 11th May. If you need to contact the call centre to discuss matters then you can call them (until 3 pm) on: 011 256 93 23. They can be contacted via email on: DebtCounselling@ AfricanBank.co.za

FNB CHARGED WITH FRAUD

When FNB tried to repossess Mr. Ahdill Abhrams & Ms. Zulfa Samsodien’s home back in 2008 the couple decided to fight back. Part of their defence at the time against a summary judgement application revolved around the securitisation issue. In a significant ruling the Cape High Court refused summary judgment against the family and said that the matter had to be argued as clarity in regard to who owned the rights to collect on a securitised property was needed. Subsequently the couple have faced and fought not one but two separate

sequestration applications against them even though they entered debt review in an effort to settle their debts responsibly. The couple and their situation became public knowledge when they were featured in a SABC documentary called: Who owns your debt? The couple who are planning to fight the matter to the courts highest court have now decided to lay a fraud claim against FNB (and FRB) and Ikhaya RMBS2 Limited (the securitisation vehicle) at the Commercial Fraud Unit in Bellville, Cape Town. Robyn Zimmerman of Liddles Attorneys says that part of the issue is that Ikhaya was only registered as a credit provider after the date of cession. It has come to the fore that information gathered by Ms Samsodien’s legal team shows that FNB ceded their rights on a different date to that originally claimed. Since Ikhaya were supposedly not a credit provider at the time they were not entitled to claim interest on the loan and FNB could not come and try claim interest as they had sold their rights, title and interest on the loan to Ikhaya. This could then result in the sequestration application being invalid and overturned. Mrs Zimmerman says “It appears that the banks... continue to conceal the whereabouts of the loan and the owner of the loan from its consumers. As such I feel it may qualify as a fraudulent transaction in terms of the Consumer Protection Act, Sec. 42.”

THEY ARE COMING TO TAKE MY CAR

CONSUMER

THEY ARE COMING TO TAKE MY CAR

There are few worse feelings than when you get that call. Someone on the other side of the line tells you that you are behind on payments and now have to return the car. Your car makes life so much easier. You need it to get the kids to school and yourself to work. You have paid the car for years and now you are going to lose it. It can be devastating. Some consumers freak out and quickly make arrangements to hide the car at a friends house or elsewhere thinking that if they can just stay away from the repo man maybe things will work out. Others hand the vehicle over only to find out later that there never was any court document demanding that they do so. They might even be able to pay up what they owe only to be hit with a mountain of extra costs. What can be done and who has the right to take your car? When consumers take vehicle finance they sign contracts that outline what will happen if they donâ&#x20AC;&#x2122;t pay. We seldom think that this situation will happen to us and so we seldom pay any attention to what is written. When a consumer misses a payment on their car, due to a sudden change in their normal monthly income, it raises a red flag on the credit providers computer system and initiates things like helpful sms reminders that payments are over due. It may even lead to a phone call from the credit provider to enquire if everything is ok? Arrangements can be made to catch up or promises to pay are made. Miss a second payment and the account gets swiftly moved into the serious collections process. Many times this means that outside collections agents are tasked with getting you to pay. A very effective method of getting you to do this is to take the car away from you. This will quickly motivate you to catch up what you owe. So collection agents call and say that you simply have to hand the car over. What consumers seldom realise is that there are costs involved with handing the car over to a collections agent for supposed safekeeping. Storage and collections costs to the tune of thousands of rands apply and these mount up the longer they have the vehicle. Unless these extra costs are also paid along with what you owed before they will not readily hand the car back. The credit provider is within their rights to ask nicely for the vehicle since they gave the credit for it and have the papers for the vehicle etc. You, the consumer are also well within your rights to say: no. Several consumers have recently reported that the collection agents (who sometimes even identify themselves as an â&#x20AC;&#x153;undersheriffâ&#x20AC;? told them that due to recent changes in the National Credit Act it was now illegal for the consumer to keep the car if they had fallen a month behind on payments and so the consumers had to hand the car over for safekeeping until the default was settled. Others have been told that they now need to settle the entire amount outstanding on their finance (not just the portion they are behind) or have to hand the car over. No recent changes in the NCA or amendments or new regulations actually say that. Beware!

STEYN COETZEE

PROFESSIONAL DEBT COUNSELLING ATTORNEYS

TEL: 021 872 1968 FAX: 021 872 2678

11 MARKET STREET PAARL

adri@steyncoetzee.co.za www.steyncoetzee.co.za

If after two months, a consumer is still not able to pay or is not able to catch up on what they owe then normally the credit provider will decide to take things to the next level and issue a Section 129 letter warning that they are about to sue the consumer. The letter will offer the consumer 10 days to either go under debt review or settle up what they owe. If the consumer is unable to do anything at this point then next the credit providerâ&#x20AC;&#x2122;s legal representatives will send out a summons to the consumer. The summons will be sent to the address you put on the contract when you signed up. If you have moved and not told them then you might not even realise this has been done. Should the summons get to you then it will tell you what court is hearing the matter, when and allow the consumer to go fight the matter in court (defend the matter). This involves writing up some court papers and filing them at that court. If the consumer does not go to fight the matter at court then the credit providers legal representatives will probably be granted a judgement against the consumer. Then these attorneys or collections agents may once again be called on to go try fetch the car. If the consumer turns them down then eventually a Sheriff of the Court will be sent to collect the car. The Sheriff of the Court has the legal right to come and remove the car (as long as no one is in it and no one gets hurt during the process, of course) if he brings along his identification and a stamped copy of the Warrant and Court Order. Going, going... Gone After a short while the car will be sold on auction if the matter is not sorted out between the consumer and the credit providers collection attorneys. Once the car is auctioned off the attorneys will contact the consumer again and tell them how much the car was sold for and how much the consumer still owes on the credit they took. Included in what is owed will be collection fees and legal fees and any other fees they can legitimately add. Due to the judgement being in place the debt can be collected on over the next 30 years until it (and interest up to double what was owed when the consumer missed the first payment) is paid up. That may sound unfair but it is all in your contract. However, you can see that this is not a fast process that happens over night and there are definite legal steps which need to be taken before anyone can come take your car. This means you have time and many opportunities to remedy the situation and catch up what you owe and keep the car. What to do when someone calls If you get a call from a total stranger asking you to pay them or to simply give them your car then you have two options: (1) hand over your car to this stranger and hope it all works out or (2) tell them to rather send you something in writing and refuse to deal with them. Remember that even when people say the phone call is recorded you will almost never be able to get a recording or access to that recording, even at court. Promises made over the phone are basically worthless. Donâ&#x20AC;&#x2122;t believe everything a person who gets commission to get you to hand over your car says.

They may have a rather obvious ulterior motive. You don’t know them. Who knows… it could be a scam. If you wish to end the call then tell them you do not give permission for them to record your voice. Repeat and repeat that till they hang up. What to do if someone shows up demanding the car If someone comes to your office or door with papers from your vehicle finance credit provider and says they “have to” take the car then you once again have two choices: (1) you can give this stranger who says they are from the credit provider or may even claim to be a sheriff or and undersheriff and say “bye bye” to your car or (2) you can simply say: No! Be sure, they will try to convince you to sign some papers saying you owe the money or maybe they will just say they want your autograph. Don’t sign papers strange people give you! Simply refuse. Nobody can force you to sign anything. They may try talk you into handing over the keys. Don’t! They might show you what looks like a court order which will probably not be stamped by the court. They may make all sorts of threats and scare you but…Don’t do it. They could be thieves for all you know. Why not take out your phone and record the whole thing on video? Why not call the cops and report that a stranger is threatening you. Ask them who they are, demand to take footage of their papers, their face, their ID and then…tell them to: “go away”. If they insist they really are a sheriff then ask them if they would like to have the conversation at the local police station where an officer can confirm that their Sheriff identification is valid. This should end things quickly if the person trying to take the car is a thief or simply a collections agent (repo man). At this point you can now try make plans to pay up what you owe before they go to court. What if I got the summons before and now the Sheriff shows up? Well, if several weeks have gone by since you got the summons and you decided not to defend the matter and if the Sheriff is really a Sheriff (they will have identification you can look at) and they have the court order/ Warrant for the car with them then you have to give them the car. Note that they need to have a stamped copy of the court order (top of the front page with the courts details on it) and they need to have their identification on them not just say they have it somewhere. Feel free to record the whole thing anyway. Remember, even at this very late point you can still make plans with the creditor to sort things out. Once the car is taken away it is very, very difficult to get the car back and delays can result in your car being sold on auction so be extremely cautious of ever giving your car to anyone or signing any document that gets thrust in your face. If anyone calls or come to visit and you have not had the chance to go to court and fight about the matter or only recently missed a payment then there is no need for you to hand the car over to a stranger. Just Say NO

South Africaâ&#x20AC;&#x2122;s leading Debt Counsellors

THEY SAY I AM UNDER DEBT REVIEW

Sometimes when consumers go to apply for new credit they get a surprising response from the credit provider. The credit provider may tell them that after having drawn a credit bureau report, the report shows that the consumer is under debt review. In the case where a consumer was never under debt review before then they should contact both the NCR and the credit bureau in question. It might be that they once went to visit a Debt Counsellor and filled in some forms but never did anything further. Perhaps someone called them and they had a long talk about debt review and that person on the line then went ahead and illegally entered their name onto the NCRâ&#x20AC;&#x2122;s database as applying for debt review. The NCR have recently been trying to sort out complaints of this nature against, at least, one firm in South Africa accused of such actions. Normally if the consumer fills in a credit bureau complaint form the matter will be sorted out within a month. It is important to note however that there are 13 credit bureaus in South Africa (some very well known large ones but also smaller niche ones). It might be necessary to identify which credit bureau report showed the creditor that the consumer is under debt review.

I was under debt review

If a consumer was previously under debt review then it may simply be a case of the status not having been updated correctly on the NCRâ&#x20AC;&#x2122;s database (which then informs all the credit bureaus) when they ended their debt review. It might also be that even though the NCR were updated clerical error led to a particular bureau not removing the status. Important to note is that if the consumer had been to court already and received a debt restructuring court order then even if they stop paying their creditors each month the status may remain until they settle up any funds owed to the Debt Counsellor (or attorneys) for their services. The matter may have to be taken back to the court quickly to say they have now left debt review. Right or wrong the consumer will probably have to pay up any outstanding amount to the Debt Counsellor for their past services and then the Debt Counsellor will offer the consumer services once again such as removing the status from the NCRâ&#x20AC;&#x2122;s database.

FORM 17.W WITHDRAWAL FROM DEBT REVIEW Consumers can often leave debt review for a number of different reasons. They might have won the lotto, inherited, got a better paying job, started work again after maternity leave etc. They might also be “fired” by their Debt Counsellor for not cooperating with them and the process or for not paying the obligated amounts. In the past when a consumer left debt review they would receive a form called a Form 17.4. This was a form which the industry made up to show that the consumer was no longer under debt review. Due to a new guideline from the NCR this form has now changed it’s name and is now called a Form 17.W When a consumer applies for debt review a Form 17.1 is sent out to their creditors telling them that the consumer is looking into getting help. When a decision is made as to whether the consumer needs debt review or not then a form 17.2 is sent out to all the same creditors. The Form 17.W is essentially the same form as the old 17.4 (no, you wont find either of them in the NCA) just with a new name. Credit Providers may ask a consumer for this form if they are convinced that they are still under debt review (when the consumer was actually under debt review before). The form shows the reason why the consumer is no longer under debt review. It might be due to the Debt Counsellor not being cooperated with by the consumer, it might be because they can now afford to pay their normal debt obligations again without debt review or it might be because they are no longer over indebted (similar but not exactly the same). Though not part of the NCA itself, the NCR have given the thumbs up to this document in recent guidelines on withdrawing from debt review. If you leave debt review prior to paying off all your debts and getting a clearance certificate be sure to get a copy of your Form 17.W

Guidelines for the Withdrawal from Debt Review Form 17.W (Withdrawal from Debt Review) Debt Counsellorâ&#x20AC;&#x2122;s Name Registered Debt Counsellor. Registration Number NCRDC 0000 To the Credit Department:

Name of Credit Provider Address of Credit Provider

From:

Debt Counsellor Name: Registration number: Address of Debt Counsellor: Telephone: E-Mail:

Date:

Todayâ&#x20AC;&#x2122;s date

Date Form 16 signed:

Insert date F16 signed

Registered Debt Counsellor. Registration Number NCRDC 0000 Name and Surname of Consumer(s): Identity Number(s) of Consumer(s): Account Number: This notice serves to notify you that: (Select the appropriate option) a)

The consumer has withdrawn from the debt review process prior to issuance of Form 17.2 and the credit bureaus have been updated accordingly via the NCR Debt Help System.

The debt counsellor has suspended provision of service due to non-cooperation by the consumer. The debt counsellor remains the debt counsellor on record.

The consumer has obtained a court order to rescind the debt review order. Credit bureaus have been updated via the NCR Debt Help System.

The consumer has obtained a court order declaring the consumer no longer over indebted. Credit bureaus have been updated via the NCR Debt Help System.

Signed at ................................................................................. on this day ............................................ of .....................

Debt Counsellor Signature .........................................................

DEBT REVIEW AWARDS 2015

The annual Debt Review Awards are getting close now and we are happy to announce that the Nominees are now being published. These nominees have been chosen by industry expert panels who have a good working knowledge of the industry and the National Credit Act. The Nominees are those companies who are making a big difference in the debt review industry and working hard to look after the needs of their clients. These nominations take into consideration the current performance of these companies and not ancient history. Out of thousands of possible candidates these companies have been identified by the Panels as stand outs. A top 3 or 4 has now been announced in the various categories. For more info on the criteria and the panel process you can head over to www.debtreviewawards.co.za Who are on the panel? The names of the panel members will only be announced once the voting has been closed and winners chosen prior to the Debt Review Awards Gala to ensure no undue pressure is placed on any of the panel members. There are 3 different panels who are considering 3 different aspects of the industry (DCs, CPs & PDAs). Panel members are from legal firms, training institutions, credit providers debt counselling firms, software developers and other industry related parties. Their extensive knowledge of the process helps identify firms who they feel are doing a great job and leading the way. No one from the kind of company under consideration by a particular panel sit on that panel (they couldnâ&#x20AC;&#x2122;t help but be biased if they did). Non of the Debtfree DIGI team sit on any of the panels. We like to report the news, not make news. The process is audited by BFK. Nominees No doubt you would like to know who the top performing companies are at present in the industry. Well here are some of the nominees announcements (others will be made via the website and social media). In the Credit Provider section These are the stand out service providers in the industry at the moment. The panels looked not at overall business practice but considered in particular the debt review aspect of each of these companies.

THE NOMINEES

The Nominees are: CATEGORY 1 MICRO FINANCE: FINCHOICE | GET BUCKS | IZWE LOANS CATEGORY 2 MEDIUM CREDIT: PROVIDERS AFRICAN BANK | CAPITEC | CONSUMER FRIEND CATEGORY 3: RETAIL FINANCE CONSUMER FRIEND | LEWIS GROUP | MR PRICE | TENACITY CATEGORY 4 VEHICLE FINANCE: MFC | STANDARD BANK | WESBANK CATEGORY 5 BANKS: FNB | NEDBANK | STANDARD BANK In the PDA Section At present there are only 3 NCR recognised PDAs in South Africa. PDAs are now clearly included in the National Credit Act (through amendment) and play an important role in helping consumers pay the right amount at the right time to their many different credit providers. The 3 companies currently with Service Level Agreements with the NCR are: DC Partner, Hyphen and NPDA. These 3 companies will be considered in the various PDA categories. Also being considered this year is the software that is used to interface with the various PDAs. The software providers will be recognised in a new category of awards: Software. In the Debt Counselling Firm Section If you would like to know who the top nominees are in the 3 size categories (Boutique, Medium, Large) then you will need to visit www.debtreviewawards.co.za or check the daily news section on www.debtfreedigi.co.za for the announcements. Winners? Even among the top performing firms in the country it will be true that one service provider is doing the best at present. Winners in the various categories will be announced on the evening of the Debt Review Awards Gala on the 13th of June. The gala will be held in Gauteng this year. Be sure to follow us on Twitter and Facebook as we report live form the event. The results will also be published in the June 2015 Debtfree DIGI magazine and on our website. For more info on the process and the nominees and winners head over to the Debt Review Awards website: www.debtreviewawards.co.za

DEBT REVIEW AWARDS

LING T L E UNS PPOR O C T SU DEB UNITY M COM

LING T L E S R OUN SUPPO C T DEB UNITY M COM

DEBT COUNSELLING COMMUNITY SUPPORT

NEWS This month DCCS distributed several gift bags to consumers in need. With the help of DC Partner we were able to include food shopping vouchers in the gift bags.

DEBTwho COUNSELLING A special thanks goes to The Debt Experts assisted us in helping a needy older consumer to get into the debt review process. COMMUNITY SUPPORT

CHALLENGE This month we challenge industry members to: Spend an hour with a debt review consumer: motivating, inspiring & giving them free counselling

www.dccsupport.co.za

IN A NUTSHELL

PDAs

Added consumer protection - amended affordability assessments Prior to the new amendments to the National Credit Amendment Act (NCA2014), affordability assessments were already mandatory, however the Act did not prescribe how they needed to be done, and simply encouraged credit providers to be responsible lenders. The new amendments set stricter criteria and checks, which are there to protect the consumer. “We welcome the affordability regulations that will effectively ensure all consumers taking out loans can afford the monthly repayments. Thus ensuring a sustainable credit marketplace”, says Ian Wood, deputy chair of the Large Non-Bank Lenders Association. According to the National Credit Regulator’s (NCR) Credit Bureau Monitor for the third quarter ended September 2014 close to half of the 22.5 million credit-active South African consumers have impaired credit records. An impaired credit record is a debt obligation that is in arrears for three months or more, meaning that these consumers are struggling to pay off their debts. Affordability assessments play an important role in identifying consumers who can afford to repay their debt, thereby helping to control reckless lending that negatively impacts our economy. Criteria and requirements for affordability assessments Credit Providers now need to follow set criteria, as defined in the NCA2014, when preparing an affordability assessment. Credit providers will need to: • Confirm the consumer’s income by checking the latest three pay slips or the latest bank statements, showing the last three salary deposits. • Check that the average gross income over the last three months preceding the debt application does not show material variance. • Determine a consumer’s discretionary income, which is their gross income, less statutory deductions, less committed payment obligations, including those stated by credit bureaus, less “necessary living expenses”, including maintenance payments. This is the income

•

• •

available to fund new proposed debt obligations. Calculate the “necessary living expenses” based on a consumer’s gross income according to the “necessary expense norms” table. “Necessary Expenses” are the consumer’s minimum living expenses, including maintenance payments. For instance, if a consumer’s presents necessary living expenses that are less than those stated in the “necessary expense norms” table then the credit provider may not accept them. Consider all debt repayment obligations. Debt obligations need to be established according to the credit agreements as reflected in the consumer credit profile held by a registered credit bureau. It is also mandatory for credit providers to submit credit information to the credit bureaus, in the manner prescribed by the NCA and the National Credit Regulator. Ensure that they disclose the “Credit Cost Multiple” and the total cost of credit. The “Credit Cost Multiple” means the ratio of the total cost of credit to the advanced principal debt, which is the total cost of credit divided by the advanced principal debt.

Are the measures sufficient? The amendments provide clearer criteria for how an affordability assessment should be conducted, however, the onus to disclose fully and accurately all living expenses and debt obligations still lies with the consumer. It is also incumbent on credit providers to act responsibly, thoroughly train front line staff, and develop comprehensive scoring mechanisms that take into consideration the consumer’s credit history, number of dependants, and insist on full income and expense disclosure. A number of areas require further investigation, for instance: • Is full disclosure of the “Credit Cost Multiple” enough? Many of our consumers have a poor understanding of these calculations and how they impact their financial situation in the longer-term. Credit providers should play a more paternalistic role in educating consumers about risk, costs, rights and obligations. • The regulations are more focused on the low-income groups and the “Necessary Expenses” Table caters poorly for the middle to higher income groups. • How will these amendments be effectively enforced, given the substantial effort, time and lack of meaningful incentive, for debt counsellors to play an active role in identifying cases of reckless lending? One just has to look at the low number of reckless lending cases identified in the past to foretell the likely future trends. Notwithstanding that there is always room for improvement the amendments to the NCA2014 go a long way to protecting and safeguarding consumers. 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 NPDA. For help, contact DCM on 0861 628 628.

DEBT REVIEW AWARDS 2014

WINNER

WINNING 3 OUT OF 5 AWARDS • CLIENT & CUSTOMER SERVICES • SYSTEM & SOFTWARE INTEGRATION • INDUSTRY SUPPORT & ENGAGEMENT Thank you for your support.

GROWING YOUR BUSINESS

INCREASE IN PAYING CUSTOMERS

DRIVE YOUR BUSINESS SUCCESS WITH THE

DCM PARTNERSHIP PROGRAMME™ Adding value through innovation and partnership.

Better Payment Behaviour

To increase your revenue, contact us on 0861 628 628 or businesspartner@dcmgroup.co.za WWW.DCMGROUP.CO.ZA

Immediate Improvement in Collections

Consumer Protection Provided (DCM Protector Card™)

Consumer Support Provided

(24hr Stress Helpline; Bank Account Facilitation; Creditor Support)

Consumers Educated & Nudged

Leaders in creating sustainable financial wellbeing

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?

011 622 9460

TELEPHONE 0861 112 882 FACSIMILE 086 605 9751 MOBILE 082 449 6856 EMAIL andre@in2insurance.co.za

www.in2insurance.co.za

Admin costs killing your profitability? Debt Counselling Operations is a company that has been uniquely designed to assist debt counselling companies with their admin work load. Our Trained Staff Assist With: 17.1, 17.2, Proposals, Credit Provider Communication Court Applications Payment Tracking and Processing Terminations Consumer and Credit Provider Queries

For further information on how we can help you with your Administrative functions contact Ilana Van Herwaarde, DC Operation Centre (PTY) Tel: 0867227405 Email: info@dcoperations.co.za

www.dcoperations.co.za

DEBT REVIEW AWARDS SAVE THE DATE 13.06.2015

DEBT COUNSELLORS ASSOCIATIONS ANNOUNCEMENT BOARD The next DCASA Meetings will be: 10 June

KZN Branch Meeting. Health Haven, Westville. 10:00

22 July

Gauteng Branch Meeting. Kempton Park Golf Club. 11:00

24 July

Western Cape Branch Meeting. Parow Golf Club. 10:00

For more information on membership or the meetings, kindly contact the DCASA office at 086 143 2272 or dcasa@dcasa.co.za

We are very happy to announce that the issue of Securitisation is now going to the Constitutional Court: http://news.acts.co.za/blog/2015/05/landmarksecuritisation-case-heads-for-the-constitutional-court

www.newera.org.za

We wish all our members well in the upcoming Debt Review Awards ORT P P

www.bdcf.co.za

Members can download the CoB vs Settlement chart off our Facebook page. Non members can request it from : secretary@allprodc.org

www.allprodc.org

SU WE

ORT

MAY

NEWSLETTER After much consideration of current challenges in the debt review industry and after much consultation with members of the Alliance we have now sent a formal Form 29 complaint to the National Credit Regulator in regard to use of CoBs vs Settlement figures. Due to non adherence to the NCA credit providers have for many years been issuing certificates of balance (CoB) when account information requests are sent by debt counsellors. We feel that, in line with the NCA, the information that should be supplied to the debt counsellor by the credit provider should be the account settlement figure. Armed with this set figure the debt counsellor can then make reliable and fixed plans for debt rehabilitation to the courts. This will also eliminate end balance differences and extra legal fighting which might occur when dealing with CoB figures. Some credit providers have opposed matters at court demanding that the figures shown in the court document are an out of date COB figure. Switching to the settlement figure eliminates

this. Use of the Settlement figure is also in the consumers best interest as it fixes the amount to be repaid as opposed to credit providers adding interest and costs throughout the process when a CoB figure is currently used. This will reduce extra charges and expenses for consumers, saving them funds. Use of the settlement figure will also thus reduce conflicts at court and oppositions and save the consumer costs in trying to have matters granted. The use of the settlement figure will also enable matters to be referred to court faster. Recently the NCR issued guidelines in regard to the debt review process. Inclusion of CoBs in this non binding opinion (and some others) should be amended. The complaint is made in terms of NCA Section 79 read with Section 1 of Ch 1 and Section 125(2) of Ch 6. If members would like to get a copy of the Form 29 they can request it on the members Facebook page and anyone else can request it from secretary@ allprodc.org

CONTACT DETAILS FORUM: www.debtconcern.webs.com / WEBSITE: www.allprodc.org / FACEBOOK: www.facebook.com/AllProDC / TWITTER: www.twitter.com/AllProDC

donâ&#x20AC;&#x2122;t be a twit

http://twitter.com/Debtfree_DIGI

ACCOUNTING

TAX

AUDIT

CONSULTING

telephone 079 888 7200 email info@bkfaccountants.co.za www.bkfaccountants.co.za

SERVICE D

CLICK THE C

DEBT COUNSELLORS

SUPPORT SERVICES

TRAINING

FINANCIAL

FINANCIAL PLANNING