Debtfree DIGI october 2016 d by Debtfree Magazine

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

October 2016 www.debtfreedigi.co.za

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C O N TE N T S Missing A Payment

Ruining Everything

Do Credit Bureaus Discriminate Against Debt Counsellors?

BUILDING A SOLID DEBT COUNSELLING PRACTICE

SERVICE DIRECTORY

EDITOR’S NOTE As the last few months of the year pass then we naturally begin to think about end of year holidays and getting to forget all our stresses and rather just have a little fun. Take a look at this months cover. Doesn’t that look nice and peaceful, tranquil and relaxing? Even if swimming is not exactly your thing then I am sure you agree that a few days down at the coast relaxing in the sun would still be very relaxing. It might be a chance to de-stress, to unwind. After all stress is bad for you. We all know that but this issue we look at the various sources of stress a person might face and how to deal with them. Dealing with debt stress is, naturally, a focus of the article so, if you feel weighed down and tired all the time be sure to read the article.

We feature a number of short articles this issue about common acronyms that get thrown around by Debt Counsellors and we also look at all the latest industry and economy related news that will impact on you. For instance, this month saw a big legal victory for consumers who were being subject to abuses of so-called ‘garnishee orders’. The SA Constitutional Court made a ruling which is going to change the way collections are done and will reduce the abuses of EAOs. We have an en

DISCLAIMER Debtfree Magazine considers its sources reliable and verifies as much information as possible. However, reporting inaccuracies can occur, consequently readers using this information do so at their own risk. Debtfree Magazine makes content available with the understanding that the publisher is not rendering legal services or financial advice. Although persons and companies mentioned herein are believed to be reputable, neither Debtfree Magazine nor any of its employees, sales executives or contributors accept any responsibility whatsoever for their activities. Debtfree Magazine contains material supplied to us by advertisers which does not necessarily reflect the views and opinions of the Debtfree Magazine team. No person, organization or party can copy or re-produce the content on this site and/or magazine or any part of this publication without a written consent from the editors’ panel and the author of the content, as applicable. Debtfree Magazine, authors and contributors reserve their rights with regards to copyright of their work.

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Missing A Debt Review Repayment

hen you are able to get help from a Debt budgeting advice and some negotiating with matter goes to court and you receive a debt order.

Before you entered debt review you may have found that to make ends meet each month you may have had to skip paying one creditor one month and pay another instead or maybe take on more debt to repay your existing debts. Eventually, like half of all credit active South Africans, you may have started to just not pay for a month, two month, three months or more. You probably had to prioritise other important things like food, medical care or unexpected costs over your debt obligations. Of course, when that happens then the credit providers collections process kicks in hard. Phone calls, emails, letters, smsâ&#x20AC;&#x2122;, visits from collections people and even summonses and court judgements normally follow. This is incredibly stressful. It is a real relief then when you are able to get help from a Debt Counsellor. After some budgeting advice and some negotiating with credit providers your matter goes to court and you receive a debt restructuring court order. Suddenly the stress of the collection process is gone and the repayment amount is far more reasonable. You can finally breath again. Many consumers find that December and January (as well as April) are some of the hardest months to keep up their restructured court ordered debt repayments. Why does this happen and what happens if you do miss a payment?

Reasons Why Some Miss Payments

Before debt review it might have been an ongoing scramble just to make ends meet each month. Few have the time, discipline or expertise to budget effectively. Besides who wants to look at figures on paper which will just show how deep of a hole you are actually in? It is depressing. Thus most people avoid doing a monthly budget and tracking their expenses.

Under debt review however each consumer gets a target of what portion of their income to use for debt and what amount to use for household expenses. Does that mean that simply by entering debt review a consumer will miraculously learn how to only spend what they have set aside for their budget each month? Will they suddenly learn the self control it takes to save toward annual expenses? This is seldom the case unless they receive training and guidance to do so. Currently this is not a big focus of many debt counselling firms or consumers. Rather consumers who have for years struggled to manage their finances simply find the struggle continues with slightly adjusted goals. Eventually they may face a tough choice: To pay or skip a payment. It is impossible to plan for the unplanned. You never know when a family member or even a pet might get ill. This normally comes with sudden expenses. Though your Debt Counsellor may have asked you to start saving a small amount each month toward such things maybe with the way food prices and electricity have gone up you have used those funds elsewhere. Sadly this is pretty normal. So, when disaster strikes you may simply decide to use the funds that are meant for your debt repayment. A car accident can really throw a spanner in the works. Suddenly you may need to pay a big amount of excess to the insurance company to get your car fixed. Where will you find the money? Well, you do have the money that is meant to go to your debt repayment sitting in the bank. Some consumers think that missing a repayment is not a big deal. So, they chose to rather use the funds set aside for their debt repayment for other things. As shown, these might be repairs to a car or medical expenses - things that seem more important and urgent but in some cases it might be for other more frivolous things such as lending funds to a family member or maybe even presents for the kids and a end of year holiday.

Miss A Payment And Ruin Everything!

If you have done something for a long time then it is hard to change. It is hard to change from a credit life style to a cash lifestyle. It is hard to budget. It is hard to learn to rely on someone else like your Debt Counsellor for advice rather than try make choices yourself quickly.

If for many years, you sometimes paid and sometimes did not it might seem that this can be done with debt review as well. It cannot. It is a huge mistake and can ruin everything that you have been working so hard to accomplish. In many cases it can leave a consumer in a much worse state than before debt review if they choose to skip a payment. If a court has ordered that you repay a certain amount each month and you do not then the credit providers have the right to go back to their original contract agreements with you and start their collections process again. Debt Counsellors also have the right to prompt credit providers to do so since you are not sticking to the process. Remember that part of the fee structure is that you pay the Debt Counsellor for their services each month. If you don’t pay them is it reasonable to expect them to offer you their services? If your boss didn’t pay you for your work would you keep gong back to work each month? When a consumer stops paying or misses a payment on their court ordered debt restructured repayment plan the credit provider will look at what you have paid since the credit was first granted, see how much you were meant to pay (plus interest etc) and then contact you to demand payment of the full arrears. This is not to be confused with just the missed debt review repayment. No this would be all the money you should have been paying under the original credit agreement for all the months or even years of the debt review and before. They will expect you to immediately catch up. Obviously it is unlikely you could ever do so or you wouldn’t have needed debt review in the first place. When you can’t pay the credit provider will unleash the collections people and their legal teams on you. So, lets say you had a car. You were meant to pay R2000 a month on the original contract. You feel behind by 2 months and then wisely entered debt review. At that point you owed the bank R4000 in arrears. Under debt review you received a fantastic deal and only had to pay R1000 a month. For the next 2 months you regularly pay the R1000. Then comes a bad month. You decide to skip a payment and the debt review falls apart. Now the credit provider call you up and demands not R1000 for the missed month but the original R 4000 arrears plus the additional R1000 x 12 months for all those

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months and now another R2000 this month as per your original contract. Do you have R18 000 (plus all the interest)? No, So they go to court, take your car and auction it off for a tiny amount. Then you still have to pay them the shortfall when they sell it for a pittance. You can see the danger because this could happen on every account you have all at the same time. Many consumers then much later in a panic run to the Debt counsellor (who they have not paid and who they never spoke to about the problem) and ask for help. But realistically what can the Debt Counsellor do? You have broken the court ordered arrangement they fought so hard to get in place. Some very willing and some would say foolish Debt Counsellors try put the broken debt review back together and may get it right to a partial measure but this may not prevent all the collections pressure on some of the accounts where the credit providers are not willing (and are not legally obliged). Cars could be lost, salaries garnished etc. So, before deciding what to do if a sudden emergency arises, be sure to speak to your Debt Counsellor. They may have a totally different view on how to handle the matter. They may also help you to see the danger of making a bad decision that you initially feel is a good one. Your cousin needs money to pay his debt? Well, the Debt Counsellor may suggest they go under debt review rather than derail your debt review. You need to repair your broken washing machine? The Debt Counsellor may advise you to use a friends machine while saving over a few months towards the repairs. Your car broken down? The Debt Counsellor may help you run the figures and realise you can join a lift club, use public transport or taxis and save towards repairs for a month or two and not miss a payment. It is hard to change your thinking about finances and instant satisfaction. If you were in financial trouble before debt review and have enjoyed the benefits of the process then be careful not to throw them all in the toilet based on a quick decision. Imagine if you decided to miss a payment to buy your kids some Christmas gifts and take them on holiday only to end up loosing them their home. Consult your Debt Counsellor and make a plan so that you never miss a payment.

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INDUSTRY

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

NCR Launch Media Campaign to Warn of Misleading Advertising

by that stage already made the payment and then all sorts of complications ensue. Few debits are queried after 10 days however. The PDAs also asked that the unrealistic rate of 0 Rand for payments under R100 be reconsidered since this constituted about 25% of all payments.

The SA Reserve Bank have announced that there will be no change in the Repo Rate (to which your bond and credit rate are linked) in September. The rate thus remains stable at 7% with Prime sitting at 10.5%. The strong Rand as well as other positive economic factors have Mid Term Budget Speech staved off an increase for the moment Not only rioting students were interested but economists predict that another rise in the mid term budget speech given by Finance Minister Pravin Gordhan. will follow before year end. Ratings agencies around the world were also paying attention as Minister Gordhan as he appealed for the country PDAs Beg DTI To (and one would guess political parties) Rethink Fee Changes At a meeting between all three NCR to work together. He stated that the registered Payment Distribution economy (growth) is once again doing Agencies and the DTI the issue of the less well than hoped. The government recent fee changes was discussed. 2 is going to find new ways to raise taxes, of the PDAs in particular discussed the since it now appears that there will be danger to the industry being caused by less tax income than predicted in Feb the 5 day payment window, in the face this year. Social grants have gone up of many debit order queries. They asked by R10. Addressing the current student that a reworked period of 15 days be chaos he announced that some extra instituted. The PDAs face a challenge in funds will be spent on tertiary education. that many consumers query debit orders This was stated as student vandals were and have them returned. The PDAs have on a rampage through the city outside

NEWS CONTINUED

parliament in running battles with the about the backlog in any reckless credit police. investigations. The suggestion was not well met by those concerned that this would give the NCR carte blanche DTI & NCR Want More Power to investigate and fine whomever Recently the DTI and NCR made they wished without a due process of presentations at Parliament, to the hearings. Portfolio Committee on Trade and Industry in regard to their desire to get more power. The DTI would like the Are you SA’s Favourite? Minister to be able to issue regulations Do your clients love you? Are you giving which offer new debt relief matters them excellent service? These questions (rather than have them added to the will soon be answered as Debtfree will NCA). The actual measures were not be running a Peoples Choice public well enumerated and when asked for voting process online as the year nears 3 examples the answers were vague. it’s end. Consumers will be able to vote The NCR asked that they be allowed to for their favourite Debt Counsellor, investigate whoever (any registrant) their best Credit Provider and preferred they wish, whenever the want. This PDA. Details will appear on the www. follows after the recent shutting down debtfreedigi.co.za website in the near of charges they brought against Capitec, future and companies will be able to due to the issue of the NCR having invite their clients to cast votes for them. been on a ‘fishing expedition’ rather than having responded to specific complaints. That case was thrown out. Credit Providers Can’t The NCR find this to be frustrating and Stand New Affordability have asked that they be empowered to Assessment Requirements basically replace the NCT in being able Truworths, Mr Price and TFG all feel that to not only investigate but to punish the regulatory changes are killing their and issue large fines. This was naturally businesses and are now taking legal a big slap in the face of the NCT, who action against the NCR and DTI to try the NCR essentially suggested become get the new regulations changed or an appeals body for any fines they issue. thrown out. The regulations demand Recently the two parties have come that credit providers ask for 3 months Truworths who under increasing pressure at parliament salary slips/proof.

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report that few people are signing up for credit accounts since the changes. Along with other negative economic factors this means that businesses like Truworths are experiencing tough times. Truworths CEO Michael Mark says that they estimate that the change has cost Truworths about R200 Million in lost sales on credit. The entire retail sector has been hard hit by the worldwide economic recession and NCR stats show that credit granted in the retail sector dropped by a massive 34%. Truworths are dependent on credit sales for 69% of all their sales. The fact that some consumers can now not prove that they can afford to use that credit is making a huge impact on their profitability. Truworths, TFG and Mr Price argue that many of their clients are self employed or are not able to gain access to pay slips meaning this burden is now preventing people from making impulse purchases or opening accounts easily.

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Jili v FirstRand Bank Ltd the Supreme Court of Appeal of South Africa

The Supreme Appeal Court has reaffirmed that a credit provider can proceed and take judgment against a consumer who defaults on any obligation under a debt review debt re-arrangement court order. This decision is based on Section 88(3) of the National Credit Act (NCA). In this case, FirstRand Bank Ltd, trading as Wesbank, originally financed a car with Ms Jili with instalments of R3 100 per month over 60 months. When Ms. Jili could not handle all her debts she entered debt review and received a debt restructuring court order. During the debt review the consumerâ&#x20AC;&#x2122;s obligation to the bank was reduced to a monthly instalment of R1 714 over 68 months. Thatâ&#x20AC;&#x2122;s a massive monthly reduction of around R1400. All was going well until Ms Jili failed to pay two instalments. The bank then issued summons and at High Court was granted summary judgment against the consumer for the return of the vehicle. The judgement was then appealed by Ms Jili. At the Supreme Court of Appeal the consumer argued unsuccessfully that Wesbank could not sue without first rescinding or varying the debt re-arrangement order. Under the NCA any court hearing such a matter can order the debt put back into the debt review but the Appeal Court also refused to cut the consumer any more slack. Why not? Well, importantly, the consumer had made no effort to catch up the missed repayments during all the time of the appeals process. The Appeal Court felt that Ms Jili had already enjoyed the considerable benefits provided by debt review court order for a long time and was not entitled to any further indulgence. The ruling shows that the bank had clear rights to proceed according to the NCA and the summary judgment was confirmed.

Do Credit Bureaus Discriminate Against Debt Counsellors?

As a professional it is hard when someone you work with regularly basically says to you that they donâ&#x20AC;&#x2122;t trust you in your professional capacity. This is how many Debt counsellors feel about the recent demands of credit bureaus when the debt Counsellor sends them notification that the consumer is no longer under debt review and their debts are paid up. What happens is when a Debt Counsellor send notification to the credit bureau (as they must in terms of the National Credit Act [NCA]) the credit provider then sends a return email saying that in order for them to update the...information [they] require all paid up letters for the accounts reflecting the Clearance Certificates. They go further to say that without such letters they will not update the info. Why are credit bureaus doing this? Is it simply a case of not believing a Debt Counsellor? Credit Bureaus biggest clients are credit providers who want to check if consumers are good payers and who else they owe money to. Thus the needs of credit providers can sometimes be prioritised over others. Many Debt Counsellors issue a clearance certificate when the consumer has paid all their debt repayments in line with the debt restructuring Court Order. At the moment though, credit providers and Debt Counsellors as well as the Payment Distribution Agencies are fighting about this matter. Some Debt Counsellors say the court order is the final word and if it says 20 payments of R100 then after 20 months the debt is done. The credit providers say that because they donâ&#x20AC;&#x2122;t capture information at the same time as the Debt Counsellors and PDAs their balances differ somewhat due to interest calculations. They thus almost always want a little more money from the consumer at the end of the process to cover the difference. This is called End Balance differences and has become a major issue in the industry. Many credit providers feel that removing the info from the credit bureau (which they could however query if they disagree) if it is simply paid in terms of the court order, is not right. They worry that the consumer may then be able to get more

credit while still owing them a few rand. It seems that this is also the view of many at the National Credit Regulatorâ&#x20AC;&#x2122;s Credit Industry Forum. CIF have been discussing this topic for a really long time with little agreement on how to deal with the matter. Suggestions have been made that pleased few people. It seems though that the credit bureaus feel that they must ask for these paid up letters. Many Debt Counsellors have already made it a long habit to have all the paid up letters from credit providers and to send these along when contacting the credit bureaus. So, it seems like a non issue but some Debt Counsellors feel strongly that they are being disrespected and this action is actually illegal. The National Credit Act does not allow for demanding any such â&#x20AC;&#x153;proofâ&#x20AC;? and does not require a Debt Counsellor to send such or even permit a Credit Bureau to deny such a request (as they have been doing). The current course of dealing with matters is thus not legal even if most Debt Counsellors simply put up with the small amount of extra work required. Some Debt Counsellors say this approach to clearance certificates is totally unfair and discriminatory since the credit bureaus do not demand a copy of the signed application when the consumer first applies for credit from a credit provider. They simply take the credit providers word for it that the debt actually exists. If the consumer later queries the listing they may then do so but not automatically for every account when they are first listed. Could it be that the credit bureaus feel that the +- 700 practicing NCR registered Debt Counsellors are not as trustworthy as credit providers are? If you are a consumer waiting for your clearance certificate this may be the hold up. Consumers should be aware that though the PDA statement may show all the debts are repaid, the Debt Counsellor may be dealing with the End Balance differences and they may end up paying for an extra month or two to make the credit providers happy.

Over Indebted If you have debt but can afford to cover your monthly living costs and still pay everyone what they are asking for you are doing well. If you have too many debts and canâ&#x20AC;&#x2122;t afford to pay them and still cover all your necessary monthly living costs then you are over indebted. Over indebted people can qualify for debt review.

Debt Review A person who is struggling with debt can approach a professional Debt Counsellor and ask them to review their situation. The Debt Counsellor draws credit reports, asks credit providers for detailed information about all the consumers debt and also works with them on a better budget for their monthly living costs. This review can help a consumer either to make a few budget changes so they can afford to repay all their debts each month or may show they need help through the courts to restructure their debt to be more affordable each month.

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Debt Restructuring If an over indebted consumer goes to a Debt Counsellor for debt review and needs help to adjust their monthly debt obligations the matter can be referred to court. A court can then consider any proposal that a Debt Counsellor makes on how they feel the debt might be repaid over time in an affordable way. The court can then declare the consumer over indebted and restructure their debt in a court order. With some negotiation before the court case many credit providers not only agree to accept less but also reduce interest rates as well.

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TIME IS MONEY

There is no doubt that Debt Counselling is one of the most complicated services available in South Africa. A recent DCASA study found that there are well over one hundred separate processes that the Debt Counsellor must undertake in the process from first contact with the Consumer through to the issue of a Clearance Certificate. This poses two unique challenges to the Debt Counsellor. Firstly, it is very easy to inadvertently skip a process or even to miss out on some of the things that you need to do within a process. Secondly, clearly Debt Counselling is an enormously labour intensive exercise. It is obvious that the more routine tasks that can be done by our systems, the less work we have to do our selves. This is after all the entire point of having computer systems. These two factors are cornerstones on which Maximus finds its passion. Team Max works tirelessly to find ways for our Debt Counsellors to save time and work more efficiently. Two of the ways that Max helps the Debt Counsellor are discussed below:

Marital Status Nothing is more frustrating than taking a Consumer through the entire on board process only to discover that they are married and the spouse knows nothing about your Consumerâ&#x20AC;&#x2122;s debt. Much worse you find that the marriage is in Community of Property! Maximus solves this problem in under five seconds. When capturing the client information Maximus makes available a button that, when clicked, interfaces with the Home Affairs database and retrieves the marital status on record there. This is then automatically compared with what the Consumer has said and Maximus confirms the result to you by highlighting the Marital Status in red if it does not match. Of Course, the result is displayed! Credit Bureaux Data One of the most onerous tasks that the Debt Counsellor must do is capture the Credit agreement information in preparation of a Debt Review. In ten seconds Maximus does all of this for you! Not only is Maximus interfaced with the Bureaux and so populates the Debt Information, but it also solves another very time consuming activity. The Account reference numbers recoded on the bureaux are as often as not garbled with other data such as extra zeros or special Characters. Maximus knows all about these gremlins and automatically fixes the account reference. The advanced Algorithm even, wherever possible, matches the bureaux Account Reference Number to the account type and then inserts this information into the debt review. These are but two examples of the many ways in which Maximus saves time and makes the Debt Counselling firm much more efficient. From fully automated mailing to Automatic Document Creation and Generation to automated Consumer communications, Maximus has it all. Contact Maximus on 011 451 0041 Next Month we will delve further into making the Debt Counselling Practice efficient by getting things done right the first time, every time.

IN A NUTSHELL

Plugging holes or addressing levers

South Africa is once again experiencing a serious drought, which has severe implications for many people and of course the economy. It is interesting to see the kinds of restrictions that are implemented during these tough times to curb water consumption. Water restrictions is essentially a strategy that plugs holes.

There are two kinds of strategies in life and in business: ‘Plugging Holes and ‘Addressing Levers’ The ‘Plugging Holes’ strategy is reactive. It is a temporary fix that doesn’t address the systemic issue, which is the mismanagement of our water resources by both government and consumers. It plugs the hole, obscures the facts and doesn’t address the real issue of ‘water scarcity’. The ‘Addressing Levers’ strategy is about resource optimisation, implementing projects and plans ahead of time, putting in place projects that will harness the most out of the existing environment. It’s building the catchment tank for rainwater, recycling grey water, and planting indigenous gardens that require less watering. There are three important ‘levers’ in the debt counselling (DC) business environment that are not given the attention they deserve; Client Conversion, Client Retention and Client Churn. Converting applicants into paying clients is not easy. However, the benefit of increasing your conversion rate is substantial. The National Payment Distribution Agency™ (NPDA) defines Conversion “as the number of debt review applicants who make their first payment within three months from the date of application.” Optmising and converting the number of clients that apply for debt review should get as much attention if not more than looking for ways to attract new business. Client Retention and Client Churn are essentially two sides of the same coin. Client Retention can be measured as the number of clients that continue to make regular monthly payments. Client Churn is the number of clients who stop making regular monthly payments. Part of the reason why debt counsellors don’t address these ‘levers’ is because they don’t measure them. What is not measured cannot be managed. Instead, the ‘loss of clients’ that inevitably results from the poor management of the conversion, retention and churn levers is plugged with advertising campaigns

to attract new business. The problem with this approach is that often the rate at which DC businesses’ lose clients can negate the effects of attracting and signingup new clients. Because increasing conversion and managing retention is not an easy process, DCM in collaboration with the NPDA developed the DCM Business Partnership Programme™ (DCMPP) to help debt counsellors increase their conversion rate and maximize client retention. The DCMPP™ involves a series of interventions, triggers and materials that assist Debt Counsellors from the very first consumer encounter, including handholding through the application process, encouraging first payments, sending SMS payment reminders and reinforcing the benefits of debt review during the full period of rehabilitation. The programme has a proven track record of success, increasing the number of first payments amongst new debt counselling applicants by 20%.

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

Debt Counsellors Associations Announcement Board

Notice is hereby given that an Annual General Meeting of members of DCASA will be held on the 15TH of November 2016 at 10h00 at Kempton Park Golf Club for the purpose of attending to the annual business of the association (including elections of next year’s NEC, the annual financial statements, confirmation of an auditor). Open to full DCASA members. Western Cape Branch Meeting Date: 1 November 2016 KZN Branch Meeting Date: 11 November 2016

When a bank burns down a building to cover its hideous underhanded crimes, you know it’s just another day in the life of being a bankster. Read this and fall over: http://www.acts.co.za/news/blog/2016/10/docufilecalled-to-court-to-answer-questions-over-fire-thatdestroyed-thousands-of-bank-documents Has a bank given you the “excuse” of documents being burned in a fire? Pleas let Kevin know. kevin@dapsol.com

www.dcasa.co.za

www.newera.org.za

As an racially diverse association we promote both debt counselling and consumer education as well as B-BBEE for our industry.

Members can visit our dedicated Facebook group and engage in a number of fascinating topics. We want your input on topics like: Can the NCT hear non 86(7)(b) matters? / DC Fees/ CIF and more.

For more info about joining the BDCF please visit our webpage.

www.bdcf.co.za

Want to join AllProDC? Contact zune@allprodc.org

www.allprodc.org

OCTOBER

NEWSLETTER Amending The Act While many of the amendments which were previously made to the NCA addressed concerns of our members, it was equally true that some glaring issues were not addressed in those changes. The changes at the time helped reduce the abuses of Section 86(10) -which we can all agree was a big step in the right direction - but many key issues were simply side stepped or ignored. This month the DTI and National Credit Regulator made several suggestions at parliament to the Portfolio Committee on Trade and Industry in an effort to take on more authority and more work. Our members are very happy to see that the NCR and DTI see the need for further changes. That said, we are somewhat concerned that the proposed changes focussed almost exclusively to the needs of the Regulator and not the industry. Looking at the suggestions made it seems unlikely that many of the proposed items will ever come into effect and indeed many of our members have concerns about some of the things proposed. One of the issues addressed was somewhat to do with the NCR’s ability to issue guidelines to the industry that are not voluntary and non binding (as is currently the case). There are pros and cons here. If the NCR could issue a guideline that somehow overrides the Act itself (which we do not feel is a good idea) then our members would be protected from punishment and fines at a court level should they follow these guidelines which clash with the Act. We however feel that it is the role of the legislative arm of government to make changes to the Act and then us as the industry to follow those changes. We hope that, should amendments or new regulations be on the charts for the mid to near future, that more important items like published DC Fees, 100% clarity on the starting point of Section 103(5)- which credit providers have been purposely dodging for years and changes to the NCT hearing only Section 86(7)(b) matters would be addressed. NCR DC Fee Research While another Debt Counsellor Association and it’s members has had extensive chance to engage with the NCR’s appointed researcher on the topic of DC Fees, we have not. Our member seem to have been sidelined in this process and it concerns us. Should this then result in the NCR issuing a new non binding opinion on DC fees in the near future without adequate representation for our members we anticipate a problem.

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

NCR Media Release Creates Poor Impression Of Debt Counselling

It is no secret that the NCR have recently been on the war path against Debt Counsellors who operate in large firms. Though some say that the NCR are actually only worried about the actions of one or two companies that are (were) larger and not all large firms, the messages coming out of the NCR seems to indicate that all the large firms (who employ lots of staff and help probably over 90% of all monthly consumer application) are somehow bad. Those in the industry struggle to understand clearly what the issue is and the media and consumers are equally, if not more, confused by these statements. All they know is it is something bad about debt review. The NCR has had billboards warning consumers about the mysterious dangers of dealing with (something to do with) Debt Counsellors. Thousands of consumers were probably scared off from the process at that point. Rather than educating consumers the message seemed scary and made debt review look like a bad idea somehow. Some consumers may have wondered if it was not better then to stay in debt and not get help. Sad really. Now the NCR has begun a media campaign to warn consumers about bad Debt Counsellors again. In particular they single out Call Centre Debt Counsellors and claim that all their staff inflate consumers budgets during consultations and then promise big discounts on the consumers future debt repayments. The NCR that to advertise that (on average) consumers pay less or a certain percentage less is misleading to consumers.

Consumers can only be disappointed that the NCR seem to be telling them that they will not pay less under debt review. Debt stressed consumers want to pay less. They need to pay less. Thus why bother with debt review at all then? Why try contact a Debt Counsellor at all if they can’t talk to people who answer the phones. Poor confused consumers. The NCR media campaign has already resulted in news headlines like this one: ‘Watch out for misleading advertising – NCR JOBURG – NCR advises consumers to be aware of the misleading debt counsellors’ You will note that it is now suddenly the Debt Counsellors, according to the headline, who mislead people. Therefore… Debt Counsellors can’t be trusted. So, then it must follow that debt review can’t help troubled consumers and they will have to rather look elsewhere. Maybe to a loan shark for an unregistered loan? You can see the concern that some Debt Counsellors have about these messages. What the NCR probably mean is that when consumers talk to Debt Counsellors they should realise that though the Debt Counsellor may at first make a guess of what the credit providers will do and what a court will probably grant, they cannot at that point know 100% for sure. Thus consumers need to be aware that their final restructured debt repayment amount under debt review will only be determined after a few weeks. Maybe this is what they are trying to tell consumers? Next, the NCR plan to warn consumers about misleading advertising by credit providers. Here the message is somewhat more clear. Certain terms like “blacklisted” etc will be clearly debunked. Offers of credit without credit checks will be shown to be reckless and illegal. The Debt Counsellor community have many concerns about misleading adverts from debt mediation companies who offer unmonitored and unregulated debt review away from the NCR’s supervision. It is a pity that the NCR have failed to warn consumers of these debt mediation scams. Instead it seems that their confusing battle against the large debt review firms will dominate the news cycles for now.

JOBS Looking for individuals who have experience in debt review. Must have an excellent knowledge of the Simplicity debt review system. Knowledge in: Excel Word Powerpoint Outlook Contact Crystal Riekert 082 727 4496 010 500 1060 / 61

DEBT COUNSELLING COMMUNITY SUPPORT DCCS Wish To Thank Standard Bank South Africa For Their Support

DEBT COUNSELLING COMMUNITY SUPPORT What makes your debt review department different from other debt review departments in the industry? Standard Bank are committed to finding innovative solutions to assist the customer in obtaining financial freedom, as well as working with all debt counsellors to find the best solutions to suit all parties. If your department could change on thing in the industry what will it be? Communication and interaction. Creating a more open channel between all stakeholders to make the entire industry great. What positive message can you give to consumers and debt review clients to motivate them not to lose hope in the process? Many people go through financial difficulty at some time in their lives. Taking responsibility, asking for help early and sticking to repayment arrangements can Turnaround help put you back in charge of your finances. Time

Bank Debt Review If you want to help with our Holiday Hamper project for December or Back to School project for January please contact: admin@dccsupport.co.za

0861 111 525 or 0861 111 402

DRApplications@standardbank.co.za

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