Debtfree DIGI October 2015 (v2) by Debtfree Magazine

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

October 2015 www.debtfreedigi.co.za

WHAT IS DEBT REVIEW? BY ANNIENNE NEL OF THE DEBT REVIEW AND SUPPORT CENTRE

Debtfree DIGI asked Debt Counsellor Annienne Nel of the Debt Review and Support Centre to help explain the debt review process. Debt is a major concern globally. Many local consumers find themselves in large amounts of debt due to using too much credit and not knowing a lot about financial planning and management. Ignoring debt, sadly, does not make it go away. It often makes things much worse. Fortunately in South Africa we have a great way for consumers to become debt free in 3-7 years. This is called debt review or debt counselling. There is no other product or service in SA like it, which gives consumers back their financial freedom and restores their dignity. The process has now been around for a long time. Debt review is 9 years old and has major role players like DCASA, the DTI and NCR ensuring consumer’s rights are protected by the law. Debt review has developed into a recognised industry and the magistrates courts have become major team players in ensuring debt restructuring court orders are granted to protect consumers and their assets. The NCR has a website with a list of Debt Counsellor registrants, where you can find help in your area. Only deal with registered Debt Counsellors who are in good standing with the NCR. Debt review is an established legal process which consumers enter into. Your Debt Counsellor will first negotiate a more affordable payment plan with your creditors and then refer the matter to court.

By referring the matter to court, a Magistrate will then over-see the process. You then repay according to the debt restructuring plan or if your circumstances improve a lot, the Debt Counsellor can declare you no longer overindebted. Some of the benefits of debt review are that you protect not only your assets against legal action and it also protects your take-home pay against things like garnishee orders. Debt review is the most rewarding debt rehabilitation program that any SA consumer can enter. The process is educational, and your Debt Counsellor will help you to develop financial skills to avoid becoming over-indebted again in the future. You will learn to draft a budget and stick to it every month. Debt Counsellor Annienne Nel says: “ At my practice I ensure my clients take home skills that change their lives and give them a better future”.

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SECURE CONSUMER PAYMENTS OVER THE FESTIVE SEASON DECEMBER / JANUARY Debt Counsellors know that South African consumers will not necessarily cut back on expenditure and holiday buying trends just to maintain their required debt review installments over the festive season. The current hard-hitting economic circumstances demand that consumers should be more sensible in their spending habits at year end. In reality however, the pressure to relax, after a tough work year, is just too tempting for some. Past trends over the Festive Season show that spending on family, gifts and a vacation often takes priority over repaying debt, and this can lead to a breakdown of consumer’s debt review and even the loss of their assets. Here are some ways you can help your clients: • Sms / Whatsapp/ Email your clients to encourage paying debt review payments. • Make sure of salary pay dates in December to allow correct debit dates for NAEDO. • Initiate an in-house consumer paying campaign /competition, giving a potential prize if a consumer maintains their payments in December & January. • Email all your consumers and inform them about the risk of defaulting on payments, including probable creditor termination and new legal action.

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CONTENTS NEWS

WHAT TO DO IF YOU LOSE YOUR JOB

DEALING WITH DEBT AS A TEAM

DC PROFILE

CAPITEC BANK EXPLAINS DEBT REVIEW

SERVICE DIRECTORY

EDITORâ&#x20AC;&#x2122;S NOTE Summer is here. The temperature is souring and we can finally turn off those heaters and give Eskom a break. That doesnâ&#x20AC;&#x2122;t mean that things are getting any easier.

associations and see what they have on the go and talk about all the recent news about the credit industry. Did you hear about the creditor that got deregistered? Did you hear about the guy who was loading ATMs with fake money? Check out the news section for those stories and more.

Prices are still steadily climbing. Students are currently protesting across the country at the cost of fees, as they too are feeling the pinch. Young or old, it seems times are tough. This is why around 14 000 people are embracing the debt review process every single month in SA. It is a dignified and realistic way to deal with their debt issues and restructure their monthly finances to cover costs and still meet their debt obligations. In this issue we talk about the process and how it works. We also talk about the way men and women deal with debt differently and the mentality of the over indebted.

Temperatures are hot and the students are revolting. If you find debt to also be revolting then you will love this issue. So keep your cool and pay your debts and by the time summer is done maybe you will finally be debt free.

This month, we interview a Debt Counsellor about what motivates her and why she is helping consumers deal with debt. We also consider some practical steps that all (not just those in debt review) can take when dealing with debt. We look at the tough situation of losing your job and how you can weather the storm. We also catch up with one of the banks and learn more about their debt review team. We check in with the various Debt Counsellor

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NCR TAKE SHOPRITE TO THE NCT

The National Credit Regulator (NCR) have been on the rampage across the country going from one retail credit provider to the next looking into their insurance offerings. Several months ago a newspaper expose’ revealed that a credit provider was charging pensioners and disabled customers insurance against disability and income loss which they could never actually claim. After the newspaper articles, the NCR investigated and took the matter to the National Consumer Tribunal (NCT). Since then, the Regulator has been doing the rounds looking for other similar violations. Their latest stop has been with Shoprite Investments Ltd and their insurance arm Shoprite Insurance Company. The NCR’s investigation also revealed that some credit had been issued in a reckless manner. They have asked that the NCT order these loans written off. The NCR’s investigation further revealed that, in some cases where finance was given over a 6 month period, the insurance offered had a 6 month waiting period. This means that consumer could never have benefited from the insurance but still had to pay anyway. The NCR say that they want to protect vulnerable consumers. They have asked the NCT to order, not only a massive fine, but also that the effected consumers get refunded.

BRIDGE NOT QUITE DONE

In a dramatic comeback from the brink of liquidation and closing their doors, a last minute hail Mary pass at keeping Bridge in business has been voted for by shareholders and creditors, keeping the sinking ship slightly afloat for the moment. Bridge Corporate (owned by the Aldum family), Bridge Credit and Onecor all recently became victims of over promising on returns while repayments on unsecured credit were dropping and the acquisition of easy, over the counter, rubber stamped garnishee orders (EAOs) were drying up. In the past, these firms were promising (and delivering) amazing 19% returns (High, very high, perhaps too high… way too high) but as payments by debtors dried up, so payments dropped to 1% PA, leading to a collapse of the entire structure and a need for business rescue and eventually the announcement of liquidation. Now, in a last minute turn around, creditors have accepted a plan to become preferred shareholders (they get their money from any profits first, before everyone else) instead of pursuing liquidation. In typical keeping things ‘in house’ fashion the man appointed to be the interim CEO of Bridge during the business rescue came from working as CFO at a company run by one of the directors of Bridge itself. The business rescue has now been terminated as the company has been deemed to no longer be financially distressed. In a new development, a co-CEO has been appointed, with the new plan, putting one of

NEWS CONTINUED their former creditors – Frans Badenhorst – in charge to help keep an eye on things during the next 4 crucial months, as the company downsizes and cuts their expenses in half. The company used to cost R11 Million to run each month, now they think that they can get that figure down to only R5.8 Million. To tide them over, a hedge fund in Cape Town is going to be putting in R40 Million to keep them afloat. This is a huge vote of confidence and roughly the cost to keep them running for 4 months at a reduced expense figure. Currently people owe Bridge somewhere between R154 Million and R186 Million, however Bridge themselves, owe people (mostly pensioners) a massive R1.6 Billion! An audit of the companies by independent forensic auditor Andre Prakke is now underway. He will be looking to see if any of the Aldum Family members were somehow moving money around within the organization, to either enrich themselves or trick investors. If the entire plan doesn’t work out in the next few months and things don’t dramatically improve, then investors and shareholders can expect the liquidation to come back into effect.

DCASA AGM DATE

The Debt Counsellors Association of South Africa (DCASA) will be holding their Annual General Meeting (AGM) in Kempton Park during November this year. DCASA members will meet on the 11th of November to discuss matters pertaining to the structure and goals of DCASA. This year, those attending the AGM will not only get to hear the DCASA President’s report on Nov 2014 – 2015, they will also get to hear the financials and this year there will be the appointment of a new auditor for the association. The AGM is also the time when

the various members vote for the National Executive Committee (NEC) who will serve for the next 12 months. Only Full Members are able to vote in this process. Also only members whose fees are up to date can attend and participate. Members who are in good standing but who cannot attend, can also send in a proxy vote via other members.

124 000 MORE CONSUMERS IN TROUBLE

The NCR have released new stats in their quarterly Consumer Credit Market Report and the Credit Bureau Monitor. This is information the NCR compile based on info submitted to them by registrants – Credit Providers – and the various (13) Credit Bureaus. The latest information covers the 3 months leading to June 2015. The latest figures reveal that credit providers have received even more applications for credit than normal. In fact, there were another 1,743,000 applications during this time. It seems that the majority of people asking for credit are based in Gauteng. During the last few months, credit providers have turned down 6 800 000 applications from different consumers across the country. That’s a lot of disappointment! Since the amount that people are borrowing toward bonds is up by an extra 9.37% compared to last year, this indicates either that consumers are shopping for slightly more fancy places or that the selling price of property is rising. The majority of people being granted bonds are earning over R15 000 a month and most are borrowing a minimum of R700 000. The latest CCM Report shows that lending for vehicles dropped a bit during the last few months even though the overall figure of credit granted is slightly up by

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NEWS CONTINUED almost 2% from this time last year. For the longest time in recent history, the area of short term unsecured loans was the cash cow which all credit providers were chasing. When payments on debt dropped off due to increased economic pressure, it saw institutions like African Bank fall to its knees and many retail furniture stores go under. As credit providers “risk appetite” in this area (unsecured lending) has diminished so has the inability of consumers to actually afford the loans they were asking for. Unsecured lending is down by almost 10% compared to last year, despite more applications than ever. More and more consumers are entering the debt review process and taking similar steps to reduce their spending and focus on repaying their debts. In the last few months over 139 000 consumers caught up with their promised payments on their debt and got themselves into a good standing at the credit bureaus. While that may seem to indicate that SA consumers are getting a handle on their debt, the reality is that at the same time over 124 000 other consumers fell into serious arrears (of 3 months or more) and now face legal action from their creditors. Overall there has been an increase in the amount of credit granted recently though hundreds of thousands of consumers were turned down when they applied for credit. In total, credit providers handed out another whopping R4.68 Billion Rand to consumers during these months. This means that more consumers are in debt than before and/or owe more than before. While it is good news that some consumers have managed to get on top of their debt situation many, many more have lost the plot entirely, and are now in serious need of professional help (like debt review) to

try remedy the situation or face serious legal action from their creditors.

JDG TRADING DEBT REVIEW MAKING CHANGES

The JD Group consists of various companies and retailers such as Joshua Doore, Russels, Morkels, Bradlows, Price & Pride and the former Electric Express. It also includes various other brands such as Incredible Connection, Hi Fi Corporation, Furniture Warehouse, Sleepmasters and Barnetts. Many people don’t realize that the giant group also own Penny Pinchers, Timber City, Hardware Warehouse, POCO, Rochester, E Best Buy Beds and Bed and Lounge. As a result of their credit offerings and large, diverse portfolio of brands, they have to deal with a lot of debt review matters. Recently JDG sent out a communication saying that they were not going to be able to handle debt review proposals over the next few days. Everyone began to wonder what was going on. It has now been revealed that JDG will be using the services of award winning outsourced credit provider debt review handling firm Consumer Friend. Consumer Friend has won awards at the last 2 annual Debt Review Awards in the retail section for their fast turn around times, good communication and excellent service. They currently represent firms like Woolworths, Truworths, RCS, Sanlam, Capfin, Forchini and others. They have a good reputation industry wide. Thus it is hoped that they will be able to take their latest client (JDG) to new heights in regard to debt review matters.

NEWS CONTINUED

NEW HEAD OF NEDBANK DEBT REVIEW CENTRE

When, long time debt review head, Anton Thomas announced that he would be moving on internally at Nedbank, the industry wondered who would be brought in to fill the post. Nedbank recently announced that a familiar face, Denise Hartley has taken over the post. Denise has been a familiar name (and signature) for a number of years in the debt review space with regard to legal matters. She has attended and spoken at various debt counselling association meetings and Nedbank workshops and is well respected throughout the industry.

MAYIBUYE CASH LOANS â&#x20AC;&#x201C; NO MORE

This month the National Consumer Tribunal (NCT) cancelled the registration of credit provider, Mayibuye Cash Loans which used to operate in Barberton in Mpumalanga. Mayibuye recently made the news when several men were found to be drawing money from an ATM with a total of 499 Sassa social grant cards. When they were arrested they had around R80 000 in cash on them. They were then linked to the credit provider. The cancellation of Mayibuyeâ&#x20AC;&#x2122;s registration with the National Credit Regulator (NCR) came after an investigation that followed this event, by the NCR into their credit lending practices. The NCR found there to be a number of serious contraventions of the National Credit Act (NCA) and as a result referred the matter to the NCT to rule on. Among other things the NCR say they found that Mayibuye were not performing any sort of proper affordability assessments. This is when a creditor checks

that a consumer can afford to repay a loan based on their monthly running costs and their other debt obligations. Mayibuye also never gave consumers a copy of a pre-agreement or quotations. Credit Providers have to inform you of all the costs of the loan, up front, and make sure you understand the obligations of taking credit. Mayibuye were also charging the incorrect and illegal amount of interest on loans and higher than allowed fees. The matter went to the NCT recently and they have ruled against Mayibule and have declared them to be in repeated contravention of the NCA. As a result they have cancelled their registration and ordered that all the consumers who were over charged must be repaid. This is great news for these consumers. The NCT have also ordered a fine against the company to the tune of R500 000.

DEBT COUNSELLING FEE STRUCTURE REVIEW POSTPONED

The National Credit Regulator (NCR) recently announced, at the Debt Counsellors Association of South Africa annual conference, that they were busy with a review of the fees Debt Counsellors charge for debt review. The NCR have issued guidelines about the fees that they want Debt Counsellors to charge in the past. The fees have been adjusted once since the process began back in 2007 and Debt Counsellors are pushing for the NCR to once again adjust the fees in line with how the industry has changed. Most Debt Counsellors now make 1/3rd less than they did back in 2009, as the industry has become more and more labour intensive and complicated. The NCR announcement at the DCASA conference

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NEWS CONTINUED mentioned that the NCR had put out to tender the process of reviewing and reporting on the fees. There was talk that a service provider had been chosen through the tender process. This caused a lot of excitement across the industry. The NCR have now crushed that joy as they have announced that they have run out of money for this project during this financial year and are shutting it down till they get some more funding next year.

JO’BURG BREAKING THE LAW?

The City of Johannesburg (CoJ) have supposedly been caught ignoring the Prescription Act and National Credit Act (NCA) in regard to collecting old debt. Some forms of debt expire (or ‘prescribe’) after 3 years if the consumer does not pay, or the creditor does not begin legal action to collect. One debt counselling firm in Gauteng reports that their clients have been getting demands from the City of Jo’Burg to pay old debts. The city’s collection team have also been asking that consumers sign acknowledgement of debt. There is a common misconception that once a debt has prescribed a consumer making payment toward this debt somehow reactivates the debt. It does not. The debt has already prescribed and thus the consumer can never be liable for it again. In fact, collecting on the debt is illegal as stated in the amended National Credit Act and the Prescription Act.

AFRICAN BANK DELAYED BY INTERNAL GREED?

A deal to sell off part of ABIL (African Bank) has resulted in African Bank’s Good Bank launch being pushed back (but not written off) untill

at least April 2016. Insurance Company Stagen, was part of African Bank and was one of the many insurance companies who have been making a ridiculous fortune insuring credit and seeing very few claims. This seems to have confused shareholders as to the real value of the company which African Bank Curator Mr. Tom Winterboer was in the process of trying to sell off. ABIL were trying to sell the company to African Bank (the good part) for 1.4 Billion but two of its BEE shareholders tanked that sale when they went to court and got an urgent interdict against the sale and demanded more money. Ironically this seems to have tanked the whole sale deal and could see the firm simply being liquidated and getting almost no return on their investment. It could also potentially have seen the whole African Bank business rescue come crashing down without some fancy footwork by Mr. Winterboer. Stagen supposedly had R1.6 Billion lying around in March 2015 (on its balance sheets). It is also slated to make a lot of profit should it continue running. Mr. Winterboer points to the harsh reality that if they do not go into business with Good Bank then they have no clients and can look forward to no profits what so ever. Beyond that, it is doubtful that profits will remain as high in the changed waters of the insurance industry at present. There has been a growing outrage in government and the public at the overpricing of insurance on credit and new regulations are seeing this former cash cow been slowly drained of its crazy profitability. It now looks like Stagen are indeed being cut out of the rescue deal entirely and their role is now being replaced by another firm which African Bank will be creating themselves. This has meant a lot of extra paperwork and agreements regarding

NEWS CONTINUED liability etc but looks like we will see the entity in place for an April launch for Good Bank. It appears that the Stagen shareholder’s desire for a higher selling price has shot themselves in the foot and African Bank will simply side step them on the way to re-establishing the bank. Mr. Winterboer has said any renegotiation is unlikely as he wants to avoid any further delays (which, of course, he would say if he was negotiating very hard).

NCR USE WARRANTS IN NORMAL MONITORING VISITS NOW?

A team of NCR representatives reportedly recently showed up at a large Cape Town Debt Counselling firm with a court ordered warrant to seize files and information. They did so supposedly without any advanced warning and in the end left with little or no files. It seems that workers at the company were informed that this was now the standard NCR process and that several other visits to local firms would happen each day that week. The NCR representatives arrived with a court document dated from the previous week and interviewed many staff members and asked after recordings of phone calls and to look at documentation (which was stored electronically). Strangely the NCR have the legal right to visit and request information as part of most Debt Counsellors conditions of registration. They have however recently been complaining that some Debt Counsellors are dodging their appointments requests, and this use of court warrants may be the extreme response.

BARNARDT CASE HITS THE POPULAR PRESS

In the September issue of Debtfree DIGI we published information about court cases in Pretoria and Bloemfontein which were calling into question the NCR issued Fee Guideline (non binding opinion) and common industry norms. This story now seems to have hit the mainstream press and the issue is gaining wider public concern. The Judge, in the case mentioned in the press, refers to the present fee structure, review process and proposals made as being, among other things, irrational and complains that due to the way the court applications were made that the DC seems to get their fees at the expense of the credit provider. Also of concern is the fact that the Debt Counsellor ended up having to pay a cost order for most of the court fees for everyone, even though they were just doing their job as set out by the NCR and industry agreements. The case has called into question the ‘normal’ way of doing debt review and the fee guidelines issued by the NCR. Though these are seldom an issue, it seems that, in this case, it was called into question by two of the credit providers involved who wanted to get out of the debt review. Though the court ordered amount each month had never been missed by the consumer and he was, in fact, now paying much more each month the credit providers seem to want to try sell off the consumers assets on auction to recover funds faster.

CAPITEC PLAN TO CHARGE FOR CREDIT LIFE

The DTI have announced that they will soon be releasing a cap for charges that can be made

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NEWS CONTINUED for insurance on credit. At present, the industry norm is around R7 / R1000 credit and it has been indicated that the proposed cap may be much less at R4/ R1000 of credit. This will mean that those firms who have offered this very seldom-used form of cover (about 20% claim rate as opposed to normal short term insurance claim rates of 60%) will be losing out on their past huge profit margins. One credit provider who, in the past, stood out from the crowd was Capitec Bank who offered a type of built in credit life insurance for which consumers did not have to directly pay. It has now been said that, should the lowered rate be published by the DTI, that Capitec will have to change that policy and start charging their clients for this sort of cover as an extra offering in the credit contract. Consumers can choose to use the creditor’s offered insurance or can provide their own when taking on credit.

FAKE MONEY IN THE ATM

The Hawks have arrested a bank employee who was loading fake money into the ATM at his bank. Allegedly, this Mpumalanga bank employee has, for a long time, been loading the ATM with a mixture of the bank’s real money with fake notes which unsuspecting consumers were drawing and trying to use without ever realising they had been duped. Apparently the man would load about half the real money from the bank and then pocket the other half and replace them with fakes. Consumers who trustingly went to draw cash at the ATM never even realised. It is estimated by the Hawks, that by the time they apprehended the 30 year old bank employee had already swapped out an amazing R2 200 000. The bank eventually figured out what was happening

and where it was happening and alerted the Hawks, who swooped in to arrest the man in the Groblersdal area in Mpumalanga.

ABSA PAYING BACK MILLIONS TO CLIENTS

Thousands of ABSA customers did not even notice when ABSA’s computers started charging them the wrong amount of interest on their credit cards and other loans for years. Now ABSA have publicly admitted their error and are paying the money back. ABSA are busy refunding what amounts to millions of Rands in incorrectly charged fees on certain credit accounts. After an extensive and very time consuming internal review ABSA figured out what the problem was and who was effected and have now announced that they are refunding the money to their clients. The NCR have been notified (and have asked for a full audit of the situation from ABSA). The SA Reserve Bank have also been notified along with several other Regulators. Apparently the problem arose years ago, during late 2009, when an interest rate change was not correctly made on ABSA’s system. They ended up charging certain consumers 9% instead of the legal 8.5% at the time. The issue came to light when one client (Mr. Achuko) made a complaint about the interest calculation on his car loan. Though this happened years ago and the situation seemed to then have been sorted out at the time, the same consumer soon realised that the interest he was being charged was once again wrong (in 2010, 2011 and 2012) and he raised the issue again. In fact, this time Mr. Achuko took the matter to court. The legal action really got ABSA’s (and other consumers) attention. Now after several years, ongoing

NEWS CONTINUED legal action and a rigorous internal review (which some media are reporting that the NCR were not aware of at all during all that time) it seems ABSA are finally in the position to refund the money to the effected consumers. ABSA are now confident that they have their computers under control again and that the situation will not repeat itself. They have publicly admitted the mistake (which brought in millions and millions of Rands during one of the toughest economic times in recent history) and are busy refunding the effected consumers. Mr. Achuko has generously had the extra illegal fees written off by ABSA, though they are still busy fighting in court about the matter. It seems this one attentive consumer just saved SA consumers millions of Rands in incorrect fees.

CREDIT BUREAUS GIVE AWAY FREE REPORTS

TransUnion, XDS, Compu-scan and CPB credit bureaus have been busy handing out free credit bureau reports to consumers visiting the Greenstone Mall in East JHB. They explained the various aspects of credit bureau reports to consumers. The initiative, by these companies and the Credit Ombud is in conjunction with the National Credit Regulator and the Credit Bureau Association. At present there are 13 different credit bureaus in South Africa. Under SA law it is a requirement that consumers be given free access to their credit bureau report at least once a year so that they can check to see what is showing. It is good to see the bureaus being so proactive about this.

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WHAT TO DO IF YOU LOSE YOUR

A SURVIVAL GUID

R JOB

Losing your job can be a real kick in the teeth. Yesterday all was well. You could plan for the end of the month, pay your bills and support your family. Then your boss has ‘the conversation’ with you and suddenly your world has changed. The future is suddenly a scary place where you expect a upward battle looking for a new job in a tough economic environment and with bills to pay. Losing your job is rated the 5th most stressful things that will ever happen to you in your entire life. It is rated very close to going to jail or finding out you have a major illness. If this happens to you (for whatever reason) it is important to take a few deep breaths. You are not your job. That is something you do to make money to care for your family. It does not define you. Then you need to consider what steps you can take to improve your situation. Lets look at a few options you have: First off, you need to go home and discuss the matter with your family. Don’t try to hide it from them. Together you can deal with the situation as a team. Don’t try go solo, be honest, open and realistic.

Next you need to figure out your true current financial situation. Check what you have in the bank. Find out what (if any) retrenchment benefits you might get from the company. What will your new reduced monthly income as a family be? Compare your new reduced income with your current monthly spending habits and work out the gap. Knowing this figure will help you work out what steps you need to take and what salary you will be looking for. Identify things that you own that could be sold (even some of the big things like your home and car). Find out what these items (big and small) sell for by checking websites like Gumtree and perhaps even calling a real estate agent. Contact each creditor and inform them, in writing, of the situation and ask for information on your credit life insurance cover (that you have on all your credit facilities) and how to make an insurance claim in regard to retrenchment. These policies can cover several monthâ&#x20AC;&#x2122;s worth of debt repayments, which will greatly reduce your stress levels. Insist on this information. Ask for the original contract documents, if necessary. After these insurance payments expire (they can last for anywhere from 3 months to 9 months) you can make written offers of very reduced payments to your creditors, should you not have found a new job by then. Donâ&#x20AC;&#x2122;t try to hide your job lose from your creditors, it will cause problems. Tell them and make a plan. Rather pay them R10 than R0 each month. Paying something (even a few rand) puts you in a different (better) collection process. Find out about claiming UIF. Start the process asap. Cut out every single thing that even seems like a slight luxury. Be ruthless. Have you been buying cool drink? Stop. Drink tap water. Have you been smoking or drinking? Stop. Have you been having lots of get-togethers at your house? Stop. Rather go to your friends places for the next while. Get rid of any TV package subscription that might tempt you into sitting in front of the screen and relaxing instead of going out to get a new job. Collect old debts that others owe you. Even collect your old furniture, tools etc that you loaned others. Sell them, if necessary. Rent out a room in your home or your garage. Seriously consider moving in with family and renting out your place for a while. Discomfort is better than debt. If using credit, do so as little as possible. Do not continue spending as you did before losing your job. Make massive reductions in your spending habits. Make your new job that of finding a job. Work at it at least 4 hours every day. Visit sites like

jobsearching.co.za to learn about how to make your CV stand out, how to go after the jobs you want and how to use your network of friends to find or create work. Throw your pride out the window and do any work that comes your way to get in additional income. Having work even once a week or one hour a day will lead to further opportunities. It will also reduce your desperation and help you avoid falling into a deep pit of debt. Create a printed mini CV ( name, qualification and contact details) and give it to all your friends, family and former workmates and contacts. Give them each a copy or two. Rather than have just yourself look for work get everyone you know to help you. If you are under debt review, you should immediately contact your Debt Counsellor at once and schedule a sit down meeting to discuss all your options. These might include asking creditors for a payment holiday, claiming from retrenchment cover (which people under debt review can get from companies like ONE insurance), going back to court to ask to suspend or reduce debt repayments temporarily etc. Your Debt Counsellor can also look at your current situation and discuss drastic changes to your monthly budget. If you are not under debt review, consider going to talk to a professional Debt Counsellor for advice on how to make ends meet during a retrenchment. Talk to them about your realistic future prospects and to see if you might need to enter debt review until the situation improves. Many families with only one (or a greatly reduced) monthly income have temporarily used the debt review process to get through tough times. Do this soon after getting your notice. Sooner is better. These days, with the tough economic environment, many people find they are out of work for a prolonged time period. Donâ&#x20AC;&#x2122;t fool yourself and try to just go on with life as normal should you lose your job. Take drastic action to reduce your spending, find other sources of income and talk to your creditors rather than hide from them. Get professional help straight away. Be careful of unregistered people offering mediation services and asking for money up front to deal with your creditors. These are normally scams and will see you lose all the money you give them. Rather do it yourself or use a NCR registered professional Debt Counsellor, whoâ&#x20AC;&#x2122;s office is in your area.

DEALING WITH DEBT AS A TEAM

There is little that can stress a relationship like money problems. Money problems can force a wedge between family, friends, business partners and is toxic in any relationship. How can you deal with debt as a couple? We look at practical steps which you can take to avoid letting debt ruin your relationships. First, it is important to realise that men and women look at money (and debt) in totally different ways. Letâ&#x20AC;&#x2122;s generalise for a moment or two. Men, in general, learn at an early age to be rough and daring, to take risks and win at all costs. Girls are, generally, taught to be soft, vulnerable and open. Men value independence and view emotion as a liablity. They worry less about debt than women. Women value security, tend to be more conservative and are not afraid to express their emotions (including about finances). As such, it should be no big surprise that it is mostly women who seek help in dealing with debt rather than men. Most men feel that talking about their debt is a sign that things are not going well, where as most women feel the opposite; that talking about debt is a sign that your relationship is doing well. Thus as couples you may have very different ways of thinking about ( and dealing with) your situation. Some people prefer to

hide the full extent of their families debt situation from their partner. Others don’t like to consult others and prefer to call the shots. Still others feel that they are martyrs who are accruing more and more debt for the benefit of their partner. All of these views can have very negative outcomes and prevent couples from dealing with debt in a timely fashion.

TIPS FOR COUPLES: Remember you communicate about debt in a different way from your partner. Be sure to listen when they talk. Ask their view and opinion. Have a regular set day and time to discuss your finances (good or bad). If it is a regular event (maybe accompanied by a fun meal) then when times are tough you will feel more comfortable talking about the situation. Review your budget ( you need one) and discuss how price increases are effecting the amount you have allowed for each type of expense. Involve your kids in your financial situation (within limits). Don’t think you can hide your debt situation from your kids. Rather than worry and frustrate them by always saying: “no” when they ask for things, help them be part of the solution and keep them generally informed. Have a joint household account for routine household expenses. Avoid the ‘your money’ and ‘my money’ mentality. Make sure both partners are sharing the load of dealing with the finances so that neither feels they are doing all the hard work without support from the other. Avoid comparing your situation with that of your friends or how things used to be in the “good old days”. Deal in facts and not in blame or comparison. Set short term and long term financial goals and realistic steps you can take to reach them. Track your progress and adjust as needed. Make a list of money saving tricks and try tick them off when you do them. If you feel you need help with your spending or debt get professional help sooner rather than later. Debt Counsellors can help draw up a new budget that allows for necessities and repaying your debts responsibly.

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

TEL 021 913 2514 FAX 0866070940 EMAIL info@liddles.co.za PHYSICAL ADDRESS 7 Chenin Blanc Street, Oude Westhof POSTAL ADDRESS PO Box 3407, tygervalley, 7536

DEBT COUNSELLOR PROFILE

ANNIENNE NEL DEBT REVIEW AND SUPPORT CENTRE TEL: 082 641 2328 / 021 948 9781 EMAIL: bellvilledcc@gmail.com

How long have you been a DC? I was registered in February 2015 What did you do before becoming a DC? I was a long time assistant for a Debt Counsellor and Admin team leader. What area do you practice in? I have a small focused practice in Bellville, and service clients in Cape Town and the Western Cape. What do you think makes your business a success? I think I am able to assist my consumers because I dare to care. I am passionate about helping people. Where do you find new business? Mostly from referrals from existing clients as well as from the internet. Who are your most co-operative and least co-operative credit provider at the moment? African Bank under curatorship are co-operating while Edgars not updating their records and ABSA are causing us problems. What is the biggest challenge facing Debt Counsellors at the moment? When consumers default on their restructuring monthly payments. Also a big issue is supposed debt mediation companies mushrooming up everywhere and the NCR not regulating the debt mediation Industry to date. I see many consumers with serious problems because of mismanagement of their payments by these illegal operators who are not registered debt counsellors. What is the biggest challenge facing your consumers at the moment? Inflation ie: Often our clients get an annual salary increase of 3.5% while their medical aids annual increase is about 9.50% . Add to that the increase in basic daily expenses, fuel, electricity, food, public transport, short term insurance etc. We also see some consumers who default on their agreements with banks and donâ&#x20AC;&#x2122;t keep their vehicle insured. What advice do you have for consumers under debt review? Stick to the plan, there is light at the end of the tunnel. Stay in contact with your DC. Talk to your DC when you find issues you feel your DC is not dealing with effectively. It is your money and debt, take responsibility for your debt review by ensuring your receive monthly distribution statements. Follow up with creditors every 12 months for latest statements to ensure your PDA balances remain updated. Donâ&#x20AC;&#x2122;t forget to change your address when you move with your DC and your creditors. Take out credit life and income protector to cover you against unemployment. Donâ&#x20AC;&#x2122;t default on credit agreements under debt review. Always make sure your DC is in good standing with the NCR.

The National Credit Regulator has busted Shoprite and its furniture subsidiaries, Ok! And House & Home for reckless lending and unlawful insurance coverage. Shoprite Investments and Shoprite Insurance Company have been selling retrenchment and occupational disability insurance to pensioners and government grant beneficiaries. These vulnerable consumers cannot claim benefits on these forms of coverage, as they are unemployed. They should not be paying premiums on them at all. Shoprite has also been granting reckless credit to consumers for Ok! Furniture and House & Home, leaving them struggling to survive. CEO of National Debt Advisors and Debt Counsellor, Sebastien Alexanderson said of the Shoprite bust, “This is strongly reminiscent of the insurance scandal, which cost the UK banks over £40 billion and is still ongoing.” GOOD NEWS FOR CONSUMERS The NCR has referred Shoprite to the National Consumer Tribunal for violating the National Credit Act and has called for the Tribunal to have Shoprite reimburse the wronged consumers, write off reckless loans and be fined. The regulator has really turned up the heat on reckless lenders of late, as consumer over-indebtedness proliferates, in the wake of rising interest rates and a collapsing economy. BAD NEWS FOR RECKLESS LENDERS The regulator fined African Bank Investments Ltd. (ABIL) and its furniture businesses, Ellerines, Bears and Geen & Richards for reckless lending, before the bank’s demise in August 2014. Moreover, the NCR recently requested the tribunal fine furniture retailers, Lewis and JD Group for selling unlawful insurance. Recently, the regulator has also conducted investigations into the lending practices of Capitec Bank Holdings Ltd. Credit providers are undoubtedly starting to sweat bullets, as the heads of reckless lenders, at last, have begun to roll.

National Debt Advisors – Fighting for Consumer Justice! www.nationaldebtadvisors.co.za Tel. 021 007 1688

CAPITEC BANK EXPLAINS DEBT REVIEW We offer simplified, transparent banking and this transparency extends to our debt review process. We’d like to introduce Michelle Nortman, Manager: Process Recoveries, to shed more light on the subject. Hi Michelle. A number of clients are confused about the debt review process and what it means for their credit record. They worry that it will affect their chance of getting credit in the future again. We support the debt review process and want to ensure that we walk beside our clients, helping them wherever we can. The very essence of debt review is to combat overindebtedness and the protection of assets. If you are under debt review, it is important to honour your restructured commitments with the aim of settling your debt. After obtaining a Form 19, you’re welcome to apply for credit again based on your affordability. Our support for this process is mainly aimed at client rehabilitation - ultimately placing the client back into the ‘credit active’ market. Tell us more about the Debt Review Awards nomination. In 2015 we won the public voting category for favourite bank in the Debt Review Awards in recognition of excellence in the field of debt review. The reason for our success is our transparency – we always make the client a priority in collaboration with their Debt Counsellors. Can you tell us more about your unique debt review system (DRS)? DRS was designed specifically for Capitec by I-Create. It is an automated system, lending itself to greater efficiencies. While it was designed abroad, we have an in-house support team to enhance the system to accommodate any legislative changes.

FRONT LEFT: Carolina Visser, Fika Jabaar, Elista Lintnaar, Taznah Hannie, Sheridan Adams, Michelle Joshua, Marilyn Barrows, Tasneem Abrahams, Brynn Conradie, Andrea Hendrikse, Maria Crowster. MIDDLE LEFT: Garth van Wyk, Monique Loofer, Kim Lemore, Cindy Mauritz, Shakirah Isaacs, Linthea Oliphant. TOP LEFT: Brendan Josephs, Christopher Zoutenberg, Denver Abrahams and Wayne Leonard.

You must have a committed work force. How big is your team? Our Debt Review team comprises of 27 people namely: Carolina Visser (Manager: Debt Review); Cindy Mauritz & Andrea Hendrikse (Team-leader: Debt Review) Garth van Wyk (DRS Administrator) and 23 debt review agents. Our follow-up and enforcement team regularly visits debt counsellors across the country to consult and engage with them on our debt review practices. We have a very close working relationship with the NCR, Debt Counsellors and clients alike. During October 2015 we visited Debt Counsellors in the Western Cape, and in November 2015 we will be visiting the KwaZuluNatal region .

TIP

To enjoy the full protection of the debt review process clients should remain committed until all of their debt is paid in full.

What are some of the big industry developments affecting you? The controversy surrounding the 17.4 / 17.W withdrawal process. Debt Counsellors should from the onset make clients aware of debt review life cycle including the â&#x20AC;&#x153;exit optionsâ&#x20AC;?.

TIP

Always ensure you make payment in terms of the restructured agreements to avoid suspension and or termination.

IN A NUTSHELL

ARE TOO MANY RULES DESTROYING YOUR BUSINESS PRODUCTIVITY? The Oxford Dictionary defines productivity as ‘The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output (of goods, products, etc.) per unit of input (of labour, materials, equipment, etc.).Technically and mathematically this is correct, but herein lies the problem. Too many businesses focus on the pure measurement of efficiency and effectiveness without considering that human cooperation is far more powerful. Why do businesses with fewer resources sometimes outperform far more skilled and resourceful competitors? The answer lies not in what can be measured, but in the power of what people can achieve when everyone works together to achieve a common goal. When people cooperate the result is often bigger than the sum of the individual parts. Yves Morieux, managing director and expert in corporate transformation in Boston Consulting Group’s Paris office, points out in a Ted Talk that productivity has steadily dropped since the 1950’s. Between 1950 and the early 1970’s productivity was at its highest at 5% per annum, in the largest European economies, as well as Japan and the United States (U.S.). Since 1995, productivity amongst these countries has dropped to approximately 1% per annum. http:// www.ted.com/talks/yves_morieux_how_too_many_rules_at_work_keep_you_from_getting_ things_done#t-71520 .This scenario is not that different in South Africa. Productivity is directly linked to the standard of living of a country. Yves Morieux points out that when productivity

is at 3% per annum, the standard of living doubles for every generation. When it drops to 1% p.a., it takes three generations to double the standard of living. At this low rate, it means many people’s grandchildren will not have better lives than they did. Why is it that in the age of the internet, when we have the easiest access to communicate, we are cooperating less? According to Morieux over focus on the “holy trinity of efficiency: clarity, measurement and accountability” are counter-productive, as it takes little consideration of the capacity of human effort when people choose to cooperate. Group effort has a multiplier effect on performance. In Moriuex’s Ted Talk, two female relay teams, one from the U.S. and one from France compete in the World Championship relay finals. The U.S. team based on statistics is by far the favourite to win. The U.S. team has the world’s two fastest 100-metre female runners. The total race time, based on the top scores of the individual runners, estimates that the U.S. team have a 6.4-metre advantage on the French team. On race day, the French relay team win. The reason? The French team cooperate better as a team, they’ve mastered the art of passing the baton, they encourage each other, their energy transcends from one runner to the next. As a team, they are far more successful. Take another real life example, two major Debt Counselling firms (DC A and DC B), both based in the same region, both call centre based. DC A employs 13 staff and processes 155 new applications per month. 139 new consumers pay. DC B is a much bigger, more resourceful DC. DC B employs 200 staff members and processes 710 new applications per day. 300 new consumers pay. Which DC is more successful? DC A’s productivity is a ratio of 10.7 new consumers per staff member versus DC B’s productivity ratio of 1.5. DC A is seven times more efficient than DC B at converting new applicants. Why? DC A’s management believes it’s because they work harder as a team (cooperate) to engage each new client, and ensure that they understand and are fully committed to the debt review process. They are also purposefully give each client the attention and service that results in peace of mind. The new frontier of productivity is not achieved with lots of complicated structures, rules, processes and metrics but through motivated teams, cooperating to achieve the same goal. With cooperation, you can do more with less.

IN A NUTSHELL is brought you by The Business Partnership Programme™, designed to support debt counsellors and consumers during the debt review process, in collaboration with the National Payment Distribution Agency (NPDA). For help, contact the NPDA on 0861 628 628. If you have suggestions for topics that you would like covered in future, please email them to info@dcmgroup.co.za

The NPDA was recognised as the industry winner for PAYMENT DISTRIBUTION and Care Premier as the industry winner for DEBT COUNSELLING SOFTWARE at the Debt Review Awards 2015.

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DEBT COUNSELLORS ASSOCIATIONS ANNOUNCEMENT BOARD

The Annual General Meeting will be held on November 11th (starting at 10am) at the Kempton Park Golf Club. Members welcome. We wish to say a big THANK YOU to Alecea Louw for all her hard work over the years and wish her all the best as she moves abroad www.dcasa.co.za

Thank you to all our members in KZN who attended our recent regional meeting during September. We will be holding meetings in other regions soon and will notify members via email of the location and dates well in advance. Also be sure to check out the new Akani Credit Report App www.akanisolutions.co.za

www.bdcf.co.za

Listen to a 15 minute interview with Tony Webbstock, a lawyer who explains the law of prescription. http://downloads.newera.org.za/Interviews/ (right click on the file and â&#x20AC;&#x2DC;save target as.â&#x20AC;&#x2122;)

www.newera.org.za

Visit our members Facebook page to find out more about the Annual General Meeting (AGM) and to join discussions on current industry topics.

www.allprodc.org

DEBT COUNSELLING COMMUNITY SUPPORT MISSION IMPOSSIBLE - THANK YOU

We were so happy that we could help a troubled consumer cover his transport costs and that we were (with some help from our sponsors) able to pay for the consumerâ&#x20AC;&#x2122;s entire debt review payment for the month of September 2015 to the tune of R2500. This meant that the consumer, who was in a world of problems and about to fall out of debt review, as well as, potentially lose his job, was able to deal DEBT COUNSELLING with this, once off, disastrous situation and still stay in the process. Thank you to the DC firm who toldCOMMUNITY us about this emergency situation and to the sponsors who SUPPORT made all of this possible. You have changed a life!

FAMILY VACATION GIFT BAG

During December DCCS will be helping vulnerable debt review families have a bit of fun (and ease some of their financial burden) as the year comes to a close with Family Vacation Gift Bags. The Family Vacation Gift Bag includes a R1000 Pick n Pay Food (or clothing) Voucher, a bunch of fun and educational toys for the kids, as well as, a little something special for the grown ups to help them relax. If you know of vulnerable families under debt review who are taking strain then please let us know and if you want to get involved and help sponsor a gift bag contact us on: admin@dccsupport.co.za

DEBT COUNSELLING COMMUNITY SUPPORT

If you are a Debt Counsellor and know of a client who has hit a speed bump and might need a little help this month to not miss their payment chat to us about our 17.3 Project. Perhaps we can assist keep your vulnerable client in the process. admin@dccsupport.co.za

OCTOBER

NEWSLETTER COURT CASES AND THE NCR FEE STRUCTURE

It seems that the Barnardt case is getting a lot of attention recently in the press and we will be chatting about it on our dedicated members Facebook page in the next few days. Please weigh in on what we can and should do in this regard. It is likely that this matter (costs orders against Debt Counsellors and the Fee Guideline in court) will be raised at the Credit Industry Forum in the near future.

FRB IN COURT MATTERS

When dealing with Wesbank or FNB it is good for members to remember that they are actually dealing with FirstRand Bank Limited (who are registered with the NCR as NCRCP20) . Often on court documents relating to Direct Axis, Call Direct, Clicks and Wesbank Debt

Counsellors name these separate entities as respondents in the court papers (and are listed as such by us in our 17.1s and 2s) but members should consider if these are, in fact, NCR registered entities or actually fall under the FRB umbrella. In the past some courts have picked this up and have even issued costs orders. Members will want to work according to the NCA requirements to avoid mistakes. We will be talking more about this on our members page on Facebook.

AGM

Our Annual General Meeting will be held shortly and we will be emailing all our members an invitation. Please attend the AGM to discuss the year gone by and the plans for the next 12 months or send your proxy votes with one of the members who do attend.

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

WELCOME TO THE BEST PDA TEAM! Meet our new DC Partner staff - Regional Agents Gerhard Olivier

Giovanni Coetzee

How do you like working in the Debt Review Market? The Debt Counselling industry is definitely exciting and full of surprises. I love the fact that people can be assisted with their debt burden .It’s great to be part of a company like DC Partner, which provides such an excellent level of service to their clients!

How do you like working in the Debt Review Market? The Debt Review Industry is constantly changing, making it exciting and rewarding to work in. I have learned so much in a short time. Working for DC Partner, I realized there are still companies with high ethical business practices and high moral values. The whole industry has such a positive impact in the lives of people and it’s great to see the consumers and creditors reaping the rewards.

Payment Distribution Agency appointed by the NCR TEL: 044 – 873 4530 FAX: 0862462493 EMAIL: petro@dcpartner.co.za www.dcpartner.co.za

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