Debtfree DIGI October 2014 by Debtfree Magazine

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

October 2014 www.debtfreedigi.co.za

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CONTENTS NEWS

SPEAK NO EVIL

PRECEDENT

DEBT VADER

LIVING ON LESS YEAR END GIFTS A PENNY SAVED

LETTER FROM A READER

“ It always seems impossible until it is done” - Nelson Mandela Specialist Attorneys dealing with Debt Review matters Magistrates Court and High Court Matters

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EDITOR’S NOTE It has been a month of just outright chaos. Just when consumers thought that things were the toughest they have been for a long time it seems that this is only the beginning of the pressures to come. Eskom are set to push their prices up by a whole whack which is bound to tip even more people over the edge. The new Reserve Bank Governor to be has announced that consumers can soon look forward to more interest hike rate hikes. This is partially because projections on SA’s growth and economic performance were wrong and have now been reduced and downgraded (as has it’s ratings internationally). The strikes rolling across various economic sectors have been blamed. And it seems that the unsecured lending “bubble” (there is no bubble!) is finally over. Smaller lender’s CEO’s and top management are selling off their shares left right and centre and jumping ship (including Wonga and now Capitec). African Bank shares are in the toilet. Added on top of that, the NCR are getting hammered from every which side in the media (for forcing / allowing the South African Fraud Prevention Services to register as a credit bureau with CPs sitting on the board) and at Parliament (regarding African Bank and the reckless lending investigations and fine) and have now launched a retaliatory strike against one Debt Counsellor [more about that in this issue]. All the while, desperate collections on prescribed debt continue at a pace (in a last ditched effort to get cash in)

as the President has not brought the National Credit Amendment Act into effect yet. On the flip side of the coin the NCT are trying to make life easier for consumers and Debt Counsellors helping them with regard to certain types of consent orders (where everyone agrees to a reduced repayment plan on debts) and Nedbank have been meeting with Debt Counsellors to discuss industry challenges. The DTI are set to release the new regulations any time now (in their final form) and it is hoped this will be the final obstacle in the way of the NCAA2014 coming into effect. What does all of that mean? It means that if you are under debt review things are getting slightly easier for you (in the process) while those outside are in for a world of pain. Hopefully they will be wise enough to join you before their situation becomes too bad. We are now heading for the year end with all the fun and challenges that faces and it is time to start planning now for all these extra costs (see LIVING ON LESS). Year end is when most people flounder in the debt review (and normal debt repayment) process. Make sure you are not one of them. Keep paying, plan ahead for further chaos and get debt free.

INDUSTRY

CONSUMER

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

NCR GET FLACK OVER SAFPS REGISTRATION

The NCR are getting some negative public attention due to their recent NCT victory which sees the South African Fraud Prevention Service (SAFPS) registered as a Credit Bureau. The issue is that members of the SAFPS board are credit providers and this is not allowed under the NCA. Will these members now have to be changed? It seems so if they are to comply with the NCA. The NCR have told interested parties that they have conducted an evaluation via an outside contractor into the situation and are happy that there is no conflict of interest since these board members are non executive board members and are not involved with the day to day running of the entity. The NCR hope that the SAFPS registration will bring more protection to consumers as the SAFPS will have to obey the NCA (just not the part in Sect 43 for the moment).

NEDBANK HOST WORKSHOP FOR DEBT COUNSELLORS IN GAUTENG

DCs made their way through extremely bad traffic to the recent Nedbank workshop held in Gauteng to meet and interact with one of the industries biggest role players. The workshop in this area was the most recent in a series of workshops that Nedbank are holding across

the country in an effort to engage more with Debt Counsellors. The workshop, which went on all day, is aimed at helping both parties get to know how the other side see certain issues such as rescissions, why they happen and what to do about them, processes and how to better communication between parties. Though the huge traffic problems were detrimental to attendance (as well as the BDCF meeting in the are a on the same day) many attended and benefitted particularly from the second session which dealt with many legal issues.

NCT ELECTRONIC CONSENT ORDER APPLICATION SYSTEM GOES LIVE

The National Consumer Tribunal (NCT) have the power to hear debt review matters where all parties agree to a plan to reduce payments for a troubled consumer on various accounts by consent. The NCT can then issue a granted rearrangement order for the debts. As long as the consumer sticks to the plan they are protected by the order. This process is a much cheaper process than via the Magistrates court (and allows Debt Counsellors to charge a small fee to cover the process). The NCT has recently been granted additional powers by the new National Credit Amendment Act and regulations (which might come into effect this year still). This means they will be hearing more of these and other matters than ever before. The

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NEWS CONT. concern then is capacity. The NCT have tried to stay ahead of the curve by introducing a semiautomated system which they hope will speed up the process and reduce turn around times for these consent matters. The NCT have run a trail pilot project using an EXCEL spreadsheet as the basis. The project was seen as a success and after some changes they are now ready to go live. They have distributed a notice to the industry and made the system available for download. In an interesting twist they have decided to use the EXCEL route (much like the www.ncrdebthelp.co.za system which has faced a lot of criticism) for their current product. This will no doubt keep their development costs to an absolute minimum but may leave the system a bit underdeveloped. That said EXCEL is a familiar program to most DCs and thus adoption might be easier and faster.

NEW RESERVE BANK GOVERNOR

President Jacob Zuma has announced Mr Lesetja Kganyago as the new Governor of the SA Reserve Bank (SARB). The appointment does not come as a shock and was widely anticipated. Currently Mr Kganyago is the deputy Reserve Bank governor. Mr Kganyago’s appointment is seen as an indicator by the Presidency of the Reserve Bank as an institution and the current policies which Mr Kganyago has helped shape. Mr Kganyago has said that interest rates need to be raised. As a result analysts looking ahead to the November Monetary Policy Committee meeting predict a 25-basis-point hike in the repo rate to 6%, and then another 100 basis points of hikes by the end of 2015. Those thinking of taking bonds and finance should keep this in mind and ensure that they can keep up with repayments at these higher rates. Mr Kganyago said:” I will not disappoint... CLASS ACTION CHALLENGE I don’t have to reinvent anything, I just have TO GARNISHEE ORDERS to carry on from where (Ms Marcus) left [off]“. The University of Stellenbosch’s Legal Aid Mr Kganyago will take over the post as of 9 Clinic are taking the matter of Garnishee (EAS) November this year when Ms Gill Marcus will Orders to Court. They have launched a Class be retiring. action on behalf of 15 consumers against the Department of Justice, DTI, NCR & Flemix Attorneys and 13 credit providers. The main NCR INVESTIGATE SALES point is about clerks of the court authorising PRICES OF ASSETS SOLD ON EAOs. Also included in the action is how lax AUCTION these particular credit providers were in their The NCR have launched an investigation into assessments of these consumers financial various credit providers (including the big situation and means (Reckless credit). In one banks) in regard to the prices they get for of the matters the credit provider recorded a vehicles sold on auction. They are particularly household expense for one consumer (his wife interested in the resulting shortfalls that arise and 5 kids) as R50. when the assets are sold for less than the assets value or the projected value of the asset. One consumer recently told the tale of how one of

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NEWS CONT. his properties was sold for R500 000 less, on auction, than an offer he had lined up with the bank. The NCR are also intent that the assets should not only be sold for a reasonable amount but that they be sold within a reasonable period of time. “Credit providers should ensure that they sell consumers’ repossessed motor vehicles and houses as soon as reasonably practicable or for the best price reasonably obtainable so that consumers are not liable to pay shortfalls that are substantially high. This is an issue of serious concern to the NCR“, says NCR CEO Nomsa Motshegare.

BRIDGE LOANS ENTER BUSINESS RESCUE

Falling profits and climbing overheads and a steady decline in recoveries have pushed unsecured lender Bridge to the brink of collapse. Half way through September the folk at Bridge Loans decided they need to take drastic action or face losing everything, much like African Bank recently did. Bridge has now called in business rescue practitioner George Nell to try right their failing business model. Bridge chief executive Emile Aldum said that many of their investors had decided to be cautious and pull back on investments following the recent failure of African Bank and it’s dismal collections on outstanding debts. Bridge needed new funding to keep things running smoothly and thus the lack of this capitol input has seen them have to restructure or die. In the past Bridge’s “guaranteed” returns of an amazing 19% . Remember what your mother said about things that seem too good to be true? Well sadly those only entering what is hoped not to be the bottom of a... triangle shaped...

looking investment and return scheme have seen that promise recently slashed all the way down to a much more realistic 6% . Around 1200 investors, each of whom is said to have put at least one million Rand into the scheme, now have to wait as Mr Nel figures out if the entire thing can actually be saved and if so how. If he feels it cannot be saved then the whole shebang goes into liquidation. The relationship between Bridge and Cambist has often been discussed (we even had a chart at one point in the media trying to untangle the web). Well, when days are dark friends are few as they say. Once the announcement was made Cambist immediately moved to make it clear that they have nothing to do with Bridge and their problems.

WONGA CEO QUITS

Microlender Wonga.com have been in the news recently as the NCR turned their attention on them. This has not been the only source of concern for them as in the UK they have also taken a pounding in the media and reported a Pre- tax drop in profits of 53% after the “fake attorneys” scandal. They were using a fake attorney firm in letters to collect from debtors (naughty) for which they received a big fine. In what now seems to be a growing trend the CEO of another unsecured credit lender is jumping ship and moving on. Mr Kevin Hurwitz is out of there! Recently we know that the African Bank CEO left (just before things went crazy with their share prices) and that Wonga’s competitor Bridge Loans have entered business rescue in the face of poor performance in an effort to save their business. It remains to be seen how Mr Hurwitz’ departure will affect the

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NEWS CONT. running of Wonga. Wonga have said that their SA operation is different to that in the UK and elsewhere and that Wonga SA had hit the break even point a short while ago and is in good shape. Kevin Hurwitz says that he is “confident” that he is leaving “the business in a really good state”. It has been his intention since mid year this year and he has just been helping with a transition over the last few months. He says that he feels it is the right time to pursue new business opportunities. Apparently he will be doing some part time work for Wonga to help assist with legacy issues that he is familiar with. Mr Hurwitz assures everyone that his leaving has nothing to do with the NCR investigation and requirement of an audit and rescinding all those judgments and removing those credit bureau listings etc.

NCR CRACK DOWN ON MONEYLINE FINANCIAL SERVICES

The National Credit Regulator has applied to the National Consumer Tribunal (NCT) to cancel the registration of Moneyline Financial Services (Pty) Ltd for breaches of the National Credit Act. THE NCR has investigated Moneyline and found that they have been breaking the law (the NCA) and want to see them closed down by the NCT. The NCR investigation revealed that Moneyline had granted credit to consumers who were receiving child support (and foster child) grants meant for the upkeep of children and that these grants were incorrectly used as income for assessing the consumers’ ability to repay credit (instead of caring for the child). The NCR also found that they had not bothered to assess their debt repayment history or their

monthly living expenses. This is called reckless credit granting. Even the forms that Moneyline Financial Services got consumers to fill in are not in the prescribed form and don’t contain what the NCR describe as ‘crucial information’ about the rights and obligations of consumers. Another big problem is that Moneyline don’t keep proper records and copies of supporting documentation of the affordability assessments that they are meant to do relating to consumers’ income and debt repayment history. Which makes sense since they are not really bothering to do this. The CEO of the NCR says: “The use of child support grants and foster child grants as income for purposes of conducting affordability assessments on credit applications is totally unacceptable. It deprives children of money meant to provide for their daily necessities”. Moneyline have got their hands on the NCR’s tribunal application and are convinced it contains a lot of errors and that the NCR have the facts wrong. They say that the accusations made are ‘inflamatory’. The CEO of Net1 (the American parent company which owns Moneylines) says they: “strongly deny any contravention of the NCA...” and that they intend to:” ...oppose the NCR’s application...” Net1 are not impressed that the NCR went out and released a press release about their NCT application without them even knowing about the outcome of the NCR’s investigation. They had to find out from the press and not the NCR themselves (ouch). They are also unimpressed that they were not given an opportunity to sort out any issues raised by the NCR’s investigation which apparently ended a few months ago.

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SPEAK NO EVIL

The NCR are busy trying to have Debt Counsellor Deborah Solomonâ&#x20AC;&#x2122;s registration as a DC revoked for saying negative things about them in the press. A debate now rages within the industry as to whether this type of retaliation is justified or unconstitutional. The comments by Deborah Solomon (representing theDCI - a

website with information and services related to dealing with debt and debt review) got the attention of the nationâ&#x20AC;&#x2122;s media. Hard questions were asked and the matter even briefly went to Parliament where it once again split opinions and caused a stir.

The NCR feel that the comments have really tarnished their fine reputation and say that saying the things Ms Solomon said is against the conditions of registration for a Debt Counsellor. (Note: there are several versions of these conditions of registration for Debt Counsellors). This punitive action by the NCR would force Ms Solomon to stop practicing and assisting her debt review clients (not through theDCI but another company) directly. At present there is a lot of opposition to anyone speaking poorly of government or government officials. This is not uncommon not only in SAâ&#x20AC;&#x2122;s past but throughout Africa and indeed world wide. A current local example is how much opposition and criticism Public Protector Thuli Madonsela is receiving for making the President pay for some of the R246 Million upgrades to his home.

ADRAs ever raise any concerns over actions/ inaction of the NCR, NCT or DTI? Would pointing out a legitimate problem with a staff member at the NCR still result in deregistration even if it was warranted? If the NCR take the matter to the NCT and lose then what does that mean? If the NCR take the matter to the NCT and win then what does that mean? Ms Solomon is well know for not being shy of legal battles and has over time been privy to many matters involving the NCR. Will all these past matters make their way into these proceedings (and public record)? If she had nothing to lose other than her registration, is there any reason for holding back at the NCT?

One wonders then if this sort of slug fest would help, or hurt the industry. In the past when The NCT application for deregistration raises the NCR has called for deregistration of Debt Counsellors, matters have gone not only to some interesting questions: The NCR have raised concerns about some the NCT but further up the legal chain to other aspects of Ms Solomonâ&#x20AC;&#x2122;s day to day running of courts as well. This would mean that matters her debt review practice. Normally then they would get more and more exposure and it is issue a compliance notice to the party involved. a concern that this might bring the industry Have they done so? If she amends these will into disrepute, which is something the NCR, no doubt want to avoid. Especially at a time when they stop action or will they press ahead? other regulatory bodies would love to absorb Does the punitive action give credence to their duties under twin peaks. The question is comments made by Ms Solomon to the press? how far are the NCR willing to go and what is Ms Solomon prepared to do and say? Is deregistering a person or entity for speaking up in public (right or wrong) inhibiting their constitutional rights to freedom of expression? Can Debt Counsellors, Credit Providers and

debtstar

DEBT VADER

CONSUMER Reasonable steps. What could reasonable be considered “reasonable”? The 3 month bank Ever have a situation where you witness a statement you insist the consumer provide – child doing wrong and when you rebuke him there’s a lot more information on there than (obviously it’s a he), he vehemently denies any just confirmation of his salary. Things like wrongdoing? He actually gets quite upset that monthly debits for rent, insurance, phone you could possibly accuse him of such a thing. contracts, loan repayments, etc. You would be Now I’m not implying that credit providers amazed at the wealth of information contained are children but really, if you do decide to in a consumer’s bank statement. ignore the law, then please don’t throw your toys when you get called out on it! Refusing Can asking someone to provide you with to provide a debt counsellor with information a ‘global’ figure for living expenses ever be is actually a contravention of the NCA in itself. considered reasonable? Well no, not really. Then, arguing that the loan was not reckless You see, the consumer is just not geared up because evidence cannot be produced to to know this kind of information. That doesn’t show otherwise is like me padlocking one of mean he’s stupid, it means he has an emotional your branches’ door, then complaining on investment in his finances, so he doesn’t have the clarity of vision that you would. Besides, the Hello Peter that you’re not open for business. NCA allows you to charge a pretty substantial And while I’m at it, let’s talk about what an amount on each loan to perform this action ‘assessment’ is. When you assess a staff of taking ‘reasonable steps to assess’. That’s member’s performance, do you rely purely right, the initiation fee. Or do you perhaps on that individual’s input? If you went for a have a different explanation for that fee? So health check-up, would you accept a doctor ultimately, the consumer pays you to take merely asking: “how are you”? When assessing those reasonable steps to assess his ability and how much someone owes you, would you suitability to borrow money from you. And simply accept the figure they provide? If you what do you do? At the first sign of trouble, responded “no” to any of these questions then you turn around and accuse the consumer of I have to ask, at what point did you decide that having misled you. It is extraordinary how so merely asking a consumer for figures, off the many consumers are able to pull one over on top of their heads, constituted an assessment? you. What assessment you ask? Well, I’m glad you did. That part in the NCA that says you may not lend money without first taking “reasonable steps to assess”. The NCA expects you to ensure that a consumer understands what he’s getting himself into, that he can afford the repayments and that you look at his repayment history. Now does that seem so difficult? Dear Credit Provider

Debt Vader

PRECEDENT

BRICE V BLUE GRANITE INVESTMENTS NUMBER TWO (PTY LTD GAUTENG HIGH COURT Here is an interesting case that has been going on for years and really shows the importance of gong to court even if the other party says it will not take legal action.

2010 - Debt Review The case between BLUE GRANITE NUMBER TWO (PTY) LTD [lets just call them BG] and Brice in the High Court Gauteng Division started way back in 2010 when Ms Brice applied for debt review. At that stage Standard Bank (SBSA) was the bondholder of an immovable property which was bought by Brice. Interestingly as the matter progressed, BG alleged that it was the owner of the property. BG#2 is what is called a ‘Special Purpose Vehicle’ [SPV] of Standard Bank. For some reason, the property had been ‘ceded’ to BG. The problem with this is that you can’t cede property to a SPV. The only way to transfer property to a Special Purpose Vehicle is to sell the property to the SPV. [The SPV is trading on the JSE and for this reason property cannot be CEDED]

2012 - Summons In February 2012, Blue Granite issued a summons against Ms Brice in regard to her bond. Rather than hope the situation would get better or go away, the summons was wisely defended. Typically as a result, BG made an application for summary judgment not wanting to wait years for a court case. The summary judgment was to be heard on 25 May 2012. On the eve of 24 May 2012 Ms Brice reached a verbal agreement with Blue Granite’s Attorney Hannes Gouws and Partners. As small complication, (that seemed a minor matter since there was supposedly an agreement

in place) Ms Brice was only able to meet with Gouws on 28 May 2012 to confirm the agreement in writing. This is where things turned sour. On 28 May, Gouws informed Ms. Brice that they, acting on BG’s behalf, had gone ahead and in the absence of Ms.Brice, had obtained the summary judgment on 25 May. Their reason was reportedly ‘to have some security for the repayment of money due to BG’. This sparked the legal battle for the next 2 years and eight months.

2013- Rescission Attempt Trying to rescind the Summary Judgement Ms. Brice consulted with Christell Lamprecht Attorneys, and Advocate Hennie van Rensburg was appointed as counsel. On advice from the legal team, it was decided to apply for rescission of the summary judgment. Denied The application for the rescission of the summary judgment was heard in February 2013 but was denied (with costs, ouch!) Not giving up, Ms.Brice applied for leave to appeal which was granted in July to a full bench of the Gauteng Division. On 27 November 2013 Gouws served a Rule 41 notice indicating that Blue Granite was abandoning its judgment from 2012 and that each party should pay its own cost. This was great news for Ms. Brice, but seemed uncharacteristic, and so Ms. Brice’s legal team decided to investigate further.

2014 - Make Them Pay Making Blue Granite Pay Next Ms. Brice reacted by bringing a Rule 41 application asking that Blue Granite be ordered to pay the cost of the whole matter. The application was served on Gouws in January 2014 and set to be on the roll in February 2014. On the eve of the application being heard, Gouws served a Notice to oppose the application and so it was removed from the roll. The application was then set down for May 2014. Again on the eve of the application being heard Gouws served the opposing affidavits and the matter had to be removed from the roll again.

Threats turn the matter into Gouws vs Lamprecht In July 2014, Lamprecht Attorneys (representing the consumer) say they received an email from Blue Graniteâ&#x20AC;&#x2122;s attorneys (Gouws) making serious allegations regarding criminal charges and threatening to lay a charge against Lamprecht Attorneys if the matter was not removed from the roll. Ms. Brice instructed her attorneys to stay the course. Two months later the application to get BG to pay for everything was completed and the application was set for 8 September 2014 on the opposed roll at court. On or about 4 September 2014, Gouws delivered an affidavit and a complaint with the Law Society of the Northern Province against Lamprecht which was also enrolled for 8 September 2014. Lamprecht say this was simply an effort to derail the application. The matter was finally placed before the honourable A.A. Louw, who heard the matter. What had started out as a summary judgment, had now become a full on battle between consumer and SPV as well as Attorney firms. The claim by Gouws was that there was an agreement reached on 27 August 2013 that each party pay its own costs. This was disputed by Ms. Brice. Interestingly the court found that Lamprecht was not in a position to accept that each party should pay its own cost in this matter. As a result the application by Ms. Brice that BG pay all her legal costs was granted (for the whole matter from the summary judgment, leave to appeal, the period whilst preparing for the appeal and the rule 41 application by Brice). It took 4 years, a lot of stress and many, many hours of legal work but what began as a summons on a debt review consumer with a Standard Bank Bond ended up with Blue Granite (a SPV) having to foot the bill. What a giant waste of money when the consumer would have and in fact did anyway make payments via debt review.

Lessons learnt It shows the importance of ensuring that you go to court on the day if there is even a chance that someone could get a summary judgement against you. If you make an arrangement with attorneys, ask for it in writing before the date of the legal action. If you are a credit provider, make sure that the correct entity (with authority) sues a consumer.

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CONSUMER

LIVING ON LESS Times are tough and we all need to make our money stretch these days. As the cost of living increases it seems that, come the end of the month, there is always a little less cash left to enjoy life with. The Living on Less is a section of Debtfree DIGI which looks at ways wise consumers can keep their living expenses down and save funds. We also consider ways to still have some fun for less. Living on Less is about spotting a great deal and letting others know. Itâ&#x20AC;&#x2122;s about changing our mind set to reflect the reality that times are tough and we need to get savvy. Sure times are tough but you can still have fun while Living on Less.

YEAR END GIFTS A PENNY SAVED

D N E R A E Y GIFTS

The end of year celebrations are almost upon us and it can be an expensive time of year. Many religious holidays, kids graduating and “thank you’s” to colleagues make us want to give gifts.

can end up saving a fortune, and enjoying a fun family activity. You can save even more by popping into the local R5 Chinese shop to get cheap gift wrapping paper, or go retro/hipster and use brown paper and string.

Be Sneaky There are several levels of sneaky gift giving. Offer your services for free. You may have some specific skill or service that you can offer to others. All it costs you is your time and you may Plan Ahead Don’t wait until the last minute to buy gifts for have some of that available over the year end those special people, you will end up spending break (if you get one). If you know of a friend a lot more than you can afford. NOW is the time or colleague who could use your abilities then to make a gift plan, and eliminate the stress of why not write the offer in a card? last minute shopping. First, sit down and make a list of the people you want to give gifts to. Know that someone in your family needs Next, decide on a realistic and conservative something and will soon go out and buy it (or budget for each person and then do your best ask you to buy it for them) out of your shopping budget? Why not be sneaky and make a present to stick to it! of it. Why not get your husband that new pair of pants or tie that you know he needs? Wrap That’s the Idea Can’t think of what to give? These days you it up, add a home-made card and away you go. can use the internet to get inspiration for a gift, It may sound tacky but if you received there is a never-ending list of ideas. Here are a something a long time ago and have never used it, then why not dust if off, polish it up, few places to start looking: package or wrap it and give it to someone www.gifts.com www.goodhousekeeping.com/holidays/gift- who will make us of it. That’s right! Re-Gift! Just make sure the original giver will never ever ideas/inexpensive see the item and for goodness sake don’t give www.prezzybox.com them the gift they once gave you. www.pinterest.com If you are still struggling for gift ideas you can visit local craft markets to pick up something Remember that when you are living on less, unique (and affordable) for your loved ones. people will not expect you to be handing out iPads left, right and centre! It really is the Don’t be afraid to negotiate the price. thought that counts, and people will appreciate a small thoughtful gift. Don’t Buy it. Make it Another way to save money is to make your own personalized gift cards at home, instead of buying them. Get the kids involved and you You do not want to break the bank on something nice for friends and family. So, what can you do?

A PENNY SAVED IS A PENNY EARNED

Let’s be honest, we all know that there are certain things that we can do in order to save a few bucks here and there. But often we are too lazy to do them. Nobody likes to make changes but if times are tight you simply have to break out of your comfort zone. Not to sure what you can do to save some bucks? Well, here are just a few things you can try this month, and if you get into the habit then you just might save more than you expect!

Use the My City Bus (or other bus transport) rather than your car You will save on petrol and on parking costs especially if you work in the City. If you have not yet thought about this option, go to their website and check out the routes and timetable and seriously consider purchasing a debit card and topping it up at one of their kiosks. It’s a safe, cheaper and stress free alternative to sitting in the traffic every day!

Turn off your geyser during the day While the summer months are still here, save electricity by turning your geyser off during Packing your own lunch for work If times are very tight then why not try to the day. Also make sure your geyser is well pack lunch for work daily? This makes sense insulated. especially if you are already making lunch for the kids. If you feel it’s unrealistic to try and pack a lunch for work every day, why not do Take a quick shower rather than bathing it even twice a week? You will be pleasantly A shower uses a lot less electricity and water surprised at how much you will have saved than a bath. come the end of the month. Plan your evening meals Before you go shopping for the week, sit down and plan what you are going to make for dinner each evening. Go shopping at the beginning of each week and buy things that are on special and if you save on buying bulk, you will save in the long run.

Cook a little extra Cook a little extra and freeze your left-overs for another night (instead of take-aways), or take them to work for lunch the next day.

BDCF GAUTENG DEBT COUNSELLORS WORKSHOP

The BDCF debt counsellors workshop was hosted by Standard Bank in Rosebank on the 10 October 2014. The speakers / presenters were from BASA, NCR, Credit Providers and the BDCF. The agenda entailed various discussions including an open panel, NCA Amendments as well as dialogue sessions where ABSA , STANDARD BANK & the NCR discussed both challenges and solutions within the credit industry to further streamline the debt review process. Contact information will be disseminated to DCâ&#x20AC;&#x2122;s from the various banks to ensure challenges are effectively resolved.

These workshops will continue in KZN and Western Cape affording debt counsellors, PDA’s , Credit providers and the NCR to engage and communicate. We encourage all debt counsellors to attend these workshops / sessions as valuable information including the NCR monitoring tool, DCRS and NCA amendments are highlighted. KZN – 24 October 2014 Western Cape – 07 November 2014 The venues will be communicated. For further enquiries (info@bdcf.co.za / ohlatshwayo@bdcf.co.za)

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LETTER FROM A READER Dear Debtfree

As a concerned consumer in South Africa I am worried about how unfairly consumers are treated. When I bought my vehicle a few years ago from Wesbank, I did not see an insurance broker at the dealership but only dealt with the lady who arranged my financing for my car. We went through the amounts payable by me towards the vehicle but under no circumstanced did she inform me that I was “buying” a credit life policy from Hollard and a group life policy from Regent. At the time of the purchase of the vehicle, I also did not receive any policy documents from either of the two insurance houses. Due to unforeseen circumstances I had to apply for debt review with a debt counsellor. I complied with all the requests from the debt counsellor. She was provided with the documentation for the vehicle insurance and the debt review court order was granted. My debt review payments are up to date. After a few months I started getting nasty sms’s and threatening phone calls from a lady acting for Colsol informing me that my debt review is in arrears and that they will be repossessing my

car if I do not make payments immediately to another bank account she provided. I did not know what was going on and phoned my debt counsellor. The debt counsellor started an investigation and it became clear that Wesbank is side-lining the debt review payment ordered by the court as the instalment for the debt on the vehicle towards value added products. They call them VAPS. It then transpired that I have agreed to the group life policy from Regent and the credit life insurance from Hollard when I signed the credit agreement with Wesbank. I was never given the opportunity to investigate or even read through any policy documents and I also now learnt that only a FAIS accredited person is allowed to discuss or sell insurance products. The debt counsellor advised me to lay a complaint with the NCR as well as the FAIS ombud as debt counsellors are also not registered FAIS agents and neither is the Magistrate or Judge in a court of law. This is a serious problem. I have been paying for something I did not ask for and my debt review payments were utilised unlawfully by Wesbank to service products that they were not allowed

LETTER FROM A READER to do. I presume they are in contempt of court and most probably in contravention of several laws. What worries me the most is that it seems as if the banks get away with everything and that the NCR should seriously investigate this practice. I do not necessarily want to cancel these policies but I would have liked to have a choice in the matter and to exercise my right to freedom of choice and association as part of basic human rights in the Constitution of our country. I am also upset that Wesbank is acting as a FAIS agent when they are in the business of a bank and why they are soliciting consumers and debt counsellors to act outside of the law. A debt counsellor may not restructure a service under debt review but only the debt and any policies or insurance should rightly be discussed with the consumer, which is me, by an agent of Regent or Hollard, not Wesbank! Why does Wesbank want me to inform them of the cancellation when this has nothing to do with them and why does Wesbank insist on having insurance and policies as part of debt review when it is not debt? If Wesbank wants to repossess my vehicle because they used the debt review payment to pay for VAPS, they must be investigated for

unlawful practices by the governing bodies. To date no person from Hollard or Regent has ever phoned me and I have still not received any policy documents from either.

Yours sincereley Concerned Consumer

DONâ&#x20AC;&#x2122;T WORK WITH AN OUT DATED VERSION OF THE ACT

2014

When the National Credit Amendment Act 2014 comes into effect along with new regulations you will want to make sure you have an up-to-date copy of the Act. Pre-order your Revised National Credit Act Booklets now

PRE ORDER NOW http://debtfreedigi.co.za/product/pocket-sized-national-credit-act-booklet/

DEBT COUNSELLOR PROFILE

ANCIL VAN HEERDEN

What area (of SA) do you practice in? How long have you been a DC? I was registered on 14 November 2007 (7 years) Gauteng, Johannesburg, Roodepoort What did you do before becoming a DC? I worked for ABSA Head Office for 26 years, including 3 years in their commercial recovery department. In 2007 I was a pupil in the Johannesburg Bar. Since becoming a debt counsellor, wanted to be a lawyer but stil think like a lawyer, which is not always good. You have done a lot of things in the Debt Review industry: Tell us about some of them. I was actively involved in the Debt Counselling Association (DCASA) where I did complaint mediation and resolution for two years. I visited credit providers on a regular basis to resolve problems and for mediation.

What makes your business a success? As a slightly smaller practice I do most of the work myself. I have a hands-on approach and always know what is going on with my business and consumers. I strive to be professional and make sure that my consumers are educated in the processes and industry. My consumers always come first and I do my utmost to assist them. I follow the provisions of the NCA and Regs and make sure I get acceptances from the creditors. Also I get the matters granted as soon as possible. I answer emails as a priority within 12 hours, not only mails from my consumers but also from the credit providers.

You are a Debt Review Awards Winner, How I was chairperson for the DCASA Gauteng does that feel? It still feels great and I am very proud of this Branch for a year. award. My consumers voted for me and this is I was a member of DCASA’s National Executive an achievement that I will always treasure. Committee. Where do you find new business? I was present in BASA, and other meetings Always through word of mouth, but I do get regarding court procedures and, inter alia, business from consumers who use the NCR’s and my Website. joint bonds. Who are your most co-operative and least cooperative credit provider at the moment? This is a difficult one... FNB is always willing to assist on merits. Nedbank will assist if I keep on pushing, and I sometimes am an irritation, but In July 2014 I won the Public voting award I proceed until I get some response. Standard at the Debt Review Awards in recognition of bank is in the middle somewhere and ABSA is difficult to persuade sometimes. The “smaller” excellence in the field of debt review. I gave training (and still do on request) on behalf of DCASA, in the preparation of court applications to approximately 130 debt counsellors in all provinces.

creditors are great, but unfortunately not all Microlenders. What is the biggest challenge facing Debt Counsellors at the moment? The biggest problem at this stage is getting statements from creditors to verify balances or to get balances. It is the duty of a DC to make sure that the creditors adhered to the granted order and that no additional costs and fees were charged during the debt restructuring period. It is also very difficult to get paid up letters out of some of the creditors and it can sometimes take months to get all the documentation together to issue the clearance. Another issue is the inability of consumers to keep with the debt review programme/ court order and defaults because of cost of living increases. This tendency is more noticeable now. The reducing of the DCâ&#x20AC;&#x2122;s fee after 24 months is causing loss of income for most small debt counsellors and we still see DCs exiting the industry because of money constraints. Distrust of consumers of the debt review process is also negatively influencing new business. The new Credit Act 2014 will give DCs a little but more power, but we will still have to deal with terminations and un-cooperative credit providers. What is the biggest challenge facing your consumers at the moment? Keeping to the granted order is the biggest challenge. The economy did not recover as we anticipated and with constant increases in living expenses, some consumers really battle. Unfortunately, sequestration the only option for some loyal consumers, especially the 2008/2010 applicants and this saddens me.

What advice do you have for consumers under debt review? Make sure you know your Debt Counsellor. Listen to your Debt Counsellor. Ask questions if you are in doubt and keep on asking. The DC has a duty to counsel and give answers. Make sure you receive your granted court order. Make sure you get your monthly distribution schedules from your PDA and compare the payments shown on your court order. Inform your DC if something is incorrect or if you do not know how to â&#x20AC;&#x153;readâ&#x20AC;? the schedules. Take responsibility and make sure that you know how to work with your money. Keep to a budget, and if you can: pay additional funds you get into your asset accounts to reduce the shortfall but remember to still put some money away in case something unforeseen happens. Debt counsellors can arrange for settlements, and some credit providers are willing to settle for less. Most important read every article you can regarding debt review and start off with Debtfree DIGI Mag.

PERCEPTIVE LEGAL AND CONSULTING RESOURCES CC 011 675 1724 / 072 180 6014

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DEBT COUNSELLORS ASSOCIATIONS ANNOUNCEMENT BOARD The DCASA Annual General Meeting will take place on 18 November 2014 at Kempton Park Golf Club from 10:00 to 12:00. All DCASA members are invited to attend the AGM. More details will be sent to all DCASA members shortly. For more information on membership, contact DCASA at 086 143 2272 or dcasa@dcasa.co.za

www.dcasa.co.za

BDCF organised workshops will be held in KZN and Western Cape in October and November 2014. We encourage all Debt Counsellors (from any association or non aligned) to attend these workshops. Workshop Dates KZN – 24 October 2014 Western Cape – 07 November 2014 The venues will be communicated. For further enquiries contact info@bdcf.co.za

www.bdcf.co.za

A class action against SA Banks is about to be filed. This is because they are auctioning properties well below their market value. A win will see a change to High Court Rule 46 which the banks use to take people to the cleaners. Listen to the interview with Douglas Shaw here: http://downloads.newera.org.za/TheNews/ (episode 19)

www.newera.org.za

The Alliance of Professional Debt Counsellors 2nd AGM: Date: 17 October 2014 Venue: KWV, Paarl, W Cape Time: 9:30 The AGM will incl: Election of office bearers, amendments to the constitutions, a discussion of the status of the industry and more. www.allprodc.org

OCTOBER

NEWSLETTER AGM

AllProDC is turning a year older and thus it is time for our Annual General Meeting. We have been very busy over the last 12 months and it is now time to reflect and make some organisational adjustments and plan for the next year. We are looking forward to our AGM this month at the beautiful venue in Paarl at KWV. You are reminded to confirm with secretary@allprodc.org in regard to attending, the agenda and to get directions if needed. We are excited to announce that Siphamandla Kumkani - the Director of Credit Law and Policy at the DTI will be at the AGM and interact with our members. The NCR have also been invited to attend. Not only will our chairman report back to the members but urgent industry matters will be discussed and members will volunteer and vote in regard to association duties at the AGM.

MEETING WITH THE NCR REGARDING CIF

has been taking to the NCR. While we had hoped for more than a rehashing of old DRAC it seems that many of the decisions coming out of CIF are just a reworking of the old Task Team report from 4 years ago. One of our big concerns is that many comments by attending parties are not minuted or addressed. The forum exists to get input from all members and thus make informed suggestions to the NCR. If matters are not minuted how can the NCR fully contemplate matters? We have further urged the NCR to allow sufficient time for CIF members to comment on issues and participate in sub committees submissions. We have now arranged for regular quarterly meetings with the NCR to address CIF and related issues. We feel that this is a very important step and this is a more direct communication channel with the NCR which will benefit our members in taking issues forward, as well as, resolving complaints that are not being attended to.

We recently travelled to Gauteng and presented our concerns about the direction that CIF

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

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