Debtfree DIGI Sept 2014 by Debtfree Magazine

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I’m debt free September 2014 www.debtfreedigi.co.za

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CONTENTS NEWS

PRESCRIBED DEBT

LIVING ON LESS THE DCASA DISCOUNT GAUTENG CONFERENCE 2014 GOURMET

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“ 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

EDITOR’S NOTE Being debt free may seem like a far off dream but it could be closer than you think. Hundreds of thousands of SA consumers have used the debt review process to get out of debt fast. Most consumers have taken on unsecured debt (which they have to repay in 24 months) and many have vehicles (which need to be paid in 7 years or less). Which means that most consumers are locked into paying their debts for 7 years. Want to be out of debt before then? Well, you can by using the debt review process. What’s more, research shows that reductions in fees and interest rates not only covers any professional fees for a Debt Counsellor, attorney and PDAs services but eventually saves consumers a huge amount of money by the time they have finished repaying their debts.

NCR’s bad books as well how Capitec have really stirred up a hornets nest among Debt Counsellors this month. A hot topic right now is something called prescription. Do you know what it is? Do you know how it can save you thousands of rand? Well, if you want to know about prescription then be sure to read the article in this issue explaining it (and telling us about a weird springbok). The DCASA annual conference left many Debt Counsellors speechless after the research into fees was discussed. If you think Debt Counsellors are making lots of money then think again. Debt Counsellors are making less than ever and working twice as hard as they ever have. If you were not one of the over 250 people who attended then you can read all about the conference and the various presenters in this issue.

We can all learn something from African Bank. It has only been a few weeks since their catastrophic plunge down the shares value So, if you are faced with debt take the plunge rollercoaster into curatorship and already they get help and get debt free. are talking about listing on the Johannesburg Stock Exchange again. Think of it this way they got themselves into a position where they were not making enough money (You know how that feels, right?) and they are now under curatorship (getting official help from a professional) to try turn their financial situation around. Sound Familiar? Check out the news section for info on what has happened since the whole mess began, learn who is in the

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REPO RATE UNCHANGED

The Reserve Bank decided to leave the Repo Rate unchanged at 5.75% The repo rate – the rate at which the central bank lends money to the various commercial banks (like FNB, Std, ABSA, Nedbank etc) has already increase twice this year (by 50 basis points to 5.5% in Jan 2014 and by a further 25 basis points to 5.75% in July.). The Monetary Policy Committee -who decide on changes to the rate - have announced this month that the rate will not increase for the moment. Reserve Bank Governor Gill Marcus said the MPC were still of the view that interest rates would normalise eventually (go up to a higher point) but they would not do so now since Consumer spending locally had deteriorated even more than expected. They have said that SA is doing poorly economically and that there will be hardly any overall growth in the economy (or at least a lot less than they hoped). Some of the reasons they say for this limited growth has to do with huge strikes and large wage increases which make SA uncompetitive in the international market. They are also concerned that Eskom is struggling to increase supply or even keep up with demand. This means that the Prime lending rate now stays at 9.25 %.

CAPITEC SEND DEBT REVIEW CONSUMERS SCARY SMS’

“You failed to make the agreed payments while under debt review. To avoid legal action call 021 941 1453/2047 by 30 Sep-14, Ref 85********87” This was the scary message that many consumers under debt review received this month from Capitec. The industry norm is to contact the Debt Counsellor if any discrepancy between proposed payments and payments received are experienced. Debt Counsellors and consumers have been further frustrated by the long time it takes to get through to the numbers shown in the sms’. Capitec say that these messages have been sanctioned until the end of the year and are only sent to consumers who default. They say that only after no favourable response is received via a payment arrangement or payment being made does Capitec Bank proceed with the termination process in terms of S86(10) and S88(3) of the NCA. Debt Counsellors have asked that they be contacted rather than the consumer, which allows them to investigate.

AFRICAN BANK THE AFTERMATH OF THE FALL

The drama at African Bank has not really stopped since it’s huge nose dive in share prices in August. Appointed Curator Tom Winterboer must have his hands full as he runs around trying to not only get the bank back on it’s feet but put out fires left, right and centre. The Reserve Banks appointment of investigators into the banks collapse have been turning up increasingly shocking information about day to day practices in the past. One of the stories which have gained attention has to do with consumers being over charged millions and millions of Rand due to African Bank ignoring the limits set in place by NCA Section 103(5) called induplum. The bank has had to return funds to consumers to the tune of about R6 million (on average about R3500) to effected consumers. Guess those amounts were also fudging the books somewhat [awkward]. In the wake of African Banks collapse Deborah Solomon of theDCI (an online information portal about debt and debt counselling) lead the charge in putting the spot light on the NCR’s actions in regard to African Bank in recent history. One of the major causes for African Banks collapse was poor performance by clients in regard to paying their debts. If consumers don’t pay then the bank can’t make its projected profits which means that share holders end up losing money not making it. This and other factors lead to the huge share sell off. TheDCI said that the NCRs reduction in fine in regard to credit which had been recklessly granted to consumers out of a branch in KZN. The fine was reduced from a huge amount (R300 Million) to

a small one (relatively speaking R20 million is a lot less). The argument was that this was tantamount to letting them off the hook and fostered bad behavior and continued reckless practice. While it was thought, at the time, that only this branch had been investigated it was recently announced by an NCR spokesman that the NCR had investigated several branches and found many, many cases of reckless credit granting and that the fine and settlement agreement reached would then have covered those offences too. Which seems a bit unfair to those other consumers whose credit was granted recklessly but seemingly did not get their loans set aside and reimbursement as was done in the KZN cases. Later it came out that the NCR had info on all the African Bank credit agreements between 2010 and 2012. Several political parties got involved and called for a hearing at parliament about the matter. The hearing at parliament did happen but was a strange beast indeed. The NCR got a lot of praise from the ANC representatives and most questions were turned aside and little actual examination happened. Consumers seemed to get the brunt of blame in regard to borrowing money they could not pay back. TheDCI and DA (and other political parties) can only have walked away disappointed while the NCR must have felt great at all the acknowledgement of their hard work. That is not the end of it though as the DA continue to push for further accountability from the NCR as well as the DTI and SARB. In the midst of the whole matter the founder of theDCI Deborah Solomon received some pretty scary warnings from the NCR that seemed to indicate that they might deregister her from being a Debt Counsellor for bringing them

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NEWS CONT. into disrepute. This caused great concern in the DC community. Fortunately it seems that the NCR do not intend to pursue this hinted threat at this time. Representatives from Debt Counsellor Associations met with African Bank in the wake of the collapse but found no joy in trying to address ongoing key issues. It seems that at African Bank Debt Review it is ‘business as normal’ with little need to change procedure. The same can’t be said for other parts of the group. A wave of layoffs and retrenchments in the Ellerines group (including companies such as Bears) has now hit and branches are been closed and staff let go in an slash and burn effort to try save some of the brands involved. Many of these former African Bank Limited workers may now be looking for debt review (no doubt with loans from the very company that once employed them) to help them through this tough time. It has got to the point where even announcements of routine telephone line maintenance are looked at askew (hmm… wonder why they need to do that? Hmmm… sounds suspicious…) Mr Winterboer though, seems to be making some head way as he has announced that African Bank (the good part that he is in charge of not the bad part which no one is talking about) are planning to register with the JSE and be back on the stock market by February 2015. This will depend on a number of things such as getting a banking license and a number of other vital regulatory steps but that is the intention.

CONSUMER FRIEND WILL NOW BE HANDLING SANLAM PERSONAL LOANS MATTERS

Consumer Friend have announced that as of 18 september 2014 they will now be handling all debt review related matters for Sanlam Personal Loans. Consumer Friend are winners of a Debt Review Award for their good work in the debt review world. They are very popular among the Debt Counsellor community for their cooperative spirit and good systems. They have announced We take great pleasure in advising that the Sanlam Personal Loans (Pty) Ltd group have taken the initiative to appoint Samdale Trading (Pty) Ltd t/a CONSUMER FRIEND (herein after referred to as “Consumer Friend”) as it’s service provider in dealing with all Sanlam Personal Loans (Pty) Ltd accounts entering the Debt Review process as of 18 September 2014. Download the Consumer Friend Mandate from Sanlam Personal Loans (Pty) Ltd for your records: Sanlam Personal Loans Consumer Friend mandate Dont get confused! As you are aware, Sanlam Personal Loans (Pty) Ltd is a joint venture of Direct Axis SA (Pty) Ltd. Please note that Consumer Friend will only be handling Sanlam Personal Loans (Pty) Ltd. All additional products affiliated with Direct Axis SA (Pty) Ltd will continue to be serviced through the channels DCs are currently utilizing. Who do you now pay? All payments are to be made to CONSUMER FRIEND (quoting the reference number

advised). For details on that account check complicated and means they have to do a few out the Consumer Friend Retail Mandate (see extra things and update the NCR on all their records etc. Since they could not agree the below). matter went to court. SAFPS has now been told Download Consumer Friends total mandate by a High Court ruling that they have to register info for all clients here: Consumer Friend Retail with the NCR as an official credit bureau. MORE: visit the Southern African Fraud Mandate_2014 Updated Prevention Service website here http://www. safps.org.za/ 17.1 &17.2/COB’S Reminders /General Correspondence E-mail: nca@consumerfriend.co.za Proposals E-mail: proposal@consumerfriend.co.za Notice of Service/Court Applications E-mail: court@consumerfriend.co.za

COURT DECLARES SAFPS TO BE A CREDIT BUREAU

The Southern African Fraud Prevention Service (SAFPS) keep information relating to fraud as submitted by their members. This helps other members not fall foul to the same scam or fraudulent behavior. The information they store can include things like lying on a CV, forged qualifications, making fake salary slips or bank statements, insurance fraud or identity theft. The SAFPS also lists those who have been victims of identity theft or fraud. Currently there are about 75 000 people listed on the SAFPS. Are they a Credit Bureau? The NCR Think So. The NCR feel that by retaining such information the SAFPS are in fact acting as a credit bureau. The SAFPS disagreed. Being a Credit Bureau makes things slightly more

SIYAYA BELLVILLE LABOUR DISPUTE HITS THE PRESS

Siyaya Debt Solutions, a large Debt Counselling franchise, hit the press when members of staff at the Bellville franchise branch were photographed outside the offices (with signage in the back ground) demanding back pay and complaining that they had been locked out of the building. When the matter hit the press Siyaya head office stepped in and helped sort out the problem by offering to pay the 25 workers and employ them directly. This seems to have pleased everyone except Mr. Pillay the former franchisee who was somewhat thrown under the bus in the media. Mrs Celeste Brown, of Siyaya, says that the media attention has been slanted and it has not been good for business, as you can imagine. She says:” Siyaya has been adversely affected by these … reports and want to put this behind us and move forward [with] our name and business intact. We thank everyone for their continued support and can assure you that Siyaya has endeavoured to not only go the extra mile for our clients but also our staff members and allies alike.”

NCR ISSUE COMPLIANCE NOTICE TO CAPFIN

The National Credit Regulator(NCR) has announced that it has issued a Compliance Notice (warning to pull up their socks) to Southern View Finance trading as or better known as Capfin for breach of the National Credit Act. This latest credit provider investigation by the NCR revealed that: Capfin do not get and then verify proof of consumers’ income. So there is no guarantee that the consumer is earning a certain amount they might claim. This is an obligation laid on credit providers who have to check what consumer say. Capfin also does not require consumers to provide other supporting info or documents when determining the ability that consumers actually have to repay the credit they apply for. Another issue is that the NCR say that Capfin’s adverts mislead and/or deceive consumers into believing that income verification and supporting documentation are not requirements for affordability assessments. In a related matter it came out that Capfin don’t actually keep records of documentation they drew to support of affordability assessments which later makes it impossible to check if they did a good assessment (they are meant to keep these docs). It appears then that Capfin have been a bit too fast and easy in regard to getting paperwork and keeping it.

these issues specifically. Capfin need to get that ready and make needed changes swiftly or face a big fine and in an extreme situation possible deregistration.

ABSA LOSE AGAIN

In September 2013 ex-Navy Captain Teboho Molotsi won his case against ABSA. [ we covered the story at the time: READ HERE]. Happy with the victory the DC planned to cancel the bond as per the Court Order however ABSA decided they were going to appeal against the judgment and subsequently papers were served on Mr Molotsi; The Appeal was set down for 1 July 2014 in front of Honourable J Shikwane; Hammond Pole were the attorney of record for ABSA and they appointed a new advocate. On the day the DC says that it seemed that the new advocate had little knowledge of the case and had to ask the Judge for copies of documents from his file. The Judge was not happy about this and eventually postponed the matter till 18 Sep. 2014 so everyone could get up to speed. Things took another twist along the way the on the 27 Aug. 2014, ENS Attorneys approached Mr Molotsi and asked for a “without prejudice meeting”. They told Mr Molotsi that they were now the new attorneys of record and that he now owed ABSA R127 000, but if he were to pay only R25 000 – they could make the whole thing go away. Mr Molotsi declined their offer. Finally on the 18th of Sep. 2014 everyone went back to Court (with some help this time from WHAT WILL CAPFIN NOW DO? Adv Hennie van Rensburg who represented Mr Molotsi). After all that added cost and effort The NCR compliance notice requires Capfin the Appeal was dismissed this time with costs to submit a full audit report to the NCR that (which means ABSA have to pay for the whole confirms that they have implemented systems thing…again). and procedures to comply with the NCA and

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PRESCRIBED DEBT DO YOU HAVE TO PAY YOUR OLD DEBTS?

The story of the dead Springbok OR Prescription - the next chapter in the NCA debt saga Long, long ago, in fact in 1969, I had a special Springbok, his name was “Prescription” and he could go without water for 3 years - but then he died; reason being that I did not give him water in that 3 year period. If I had given him water, not just any old water, special water (tacit and expressed and enough to keep him going), I could have extended his life by another 3 years. Before we move into the debate about: “I is I was - I have been a Springbok” we need to be reminded ourselves about a pacta sunt servanda. For those who don’t have Latin as their home language it means “the sanctity (freedom) of contracts” and it is a doctrine we find in law. In short, every person has the right to freely enter into contracts. This principle has four aspects: 1: freedom from interference by the state to negotiate the terms of a contract, and the corrective freedom from having them imposed on one; 2: freedom to select the person with whom one contracts; 3: freedom not to contract; and 4: freedom from having a contract one has made, being interfered with. One should always bear in mind that we all have an obligation to honour the contracts we enter into, most important the moral obligation to settle the debt that we agreed on. Lawmakers

have an obligation to protect the consumer but the opposite is also true, hence the principle. Once we have an imbalance between the weighting of the protection of the consumer (prescription) versus the protection of the credit grantor (“sanctity of contract” - creditor/ economy) then there is no “equity” and that cannot be sound reasoning. So many times the issue of Prescription has been raised and the question is easy but the answer apparently not: “Once prescription has run the full period, without being interrupted, can the Creditor still pursue the debt?” I acknowledge many authors on the topic and trust that they will forgive me for using some of their writings and combining that with mine - all in an effort to clear some of the confusion.

imposes conditions on initiating an action for the recovery of a debt. The general rule does not apply where another law applies to the prescription of a debt which arose or arises out of an advance or loan of money by an insurer to any person in respect of an insurance policy issued by such insurer before 1 January 1974. The Act is rarely worth considering when dealing with debts that only prescribe after 30 years. The 30-year period applies to any debt: secured by mortgage bond; that is a judgment debt; relating to taxation by any law; levied by or under any law; owed to the government for any share of the profits, royalties or similar consideration payable for the right to mine minerals or other substances. Similarly the Act will seldom be applied to other debts owed to the government due to: an advance or loan of money; or a sale or lease of land by the State. In such instances 15 years must pass before prescription can be considered. With regard to a debt not mentioned above and arising from a negotiable instrument (such as a cheque or a bill of exchange) or from the less-commonly used notarial contract the prescription period is 6 years. Any debt not mentioned in the paragraphs above the prescription period is 3 years, unless a national act provides otherwise.

The 1969 Prescription Act It is true that when you appear in court for non-payment of a debt, you may raise the defence of prescription at any time during the proceedings. What does the defence entail: a set period of time has passed and by law, you are no longer legally obliged to pay the debt or a subsidiary debt that arose from the debt [chapter iv sec 17(2)]. Nowhere in the Act does it stipulate that the defence can only be raised Prescription starts to run as soon as the debt in a court of law. is due, not to be confused with the date of What about all the provisions of the other default. Here we are referred to the wording chapters in the Act? Do we ignore them and of the contract between the parties unless: the if not; how are they applied? The general debtor wilfully prevented the creditor from rule (3 years) applies to all debts covered by coming to know of the existence of the debt South African law unless the general rule is - prescription then starts once the creditor inconsistent with the provisions of any Act of becomes aware of the existence of the debt; Parliament that: prescribes a specified period or the creditor did not have knowledge of the within which a claim is to be made or an action identity of the debtor and of the facts from is to be instituted in respect of a debt; or which the debt arises - prescription then starts

from the time the creditor is deemed to have such knowledge based on the fact that he, she or it could have gained such knowledge by exercising reasonable care. Payment made by a debtor after prescription - a payment by a debtor that could have relied on prescription, or in fact relied on prescription, will be accepted in law as payment of a debt - [chapter iii sec 10 (3)]. Prescription can be delayed - Anyone wishing to rely on prescription as a defence, or anyone wishing to avoid such a defence, should study section 13 of the Act. This section raises the possibility that prescription is postponed where certain facts impede the creditorâ&#x20AC;&#x2122;s ability to institute action in a court such as the fact that the creditor was/is: a minor; declared mentally unfit by court order; a person under curatorship; prevented by superior force including any law or any order of court from judicial interruption of prescription; dealing with a debtor that was/is outside South Africa; married to the debtor; in a partnership with the debtor and the debt arose out of the partnership relationship; or a juristic person (close corporation, company, co-operative) and the debtor is a member of the governing body of the juristic person. Postponement of prescription must also be considered where the debt is the object of a dispute subjected to arbitration; the debt is the object of a claim filed against the estate of a debtor who is deceased or against the insolvent estate of the debtor or against a company in liquidation or against an applicant under the Agricultural Credit; or the creditor or the debtor is deceased and an executor of the estate in question has not yet been appointed; where the reciprocal debt in a contract has not prescribed yet.

Interruption of prescription - an acknowledgement of liability and a payment interrupts prescription. Prescription is interrupted by any express or tacit acknowledgement or payment of liability by the debtor. In such a situation prescription starts afresh from the day: on which the interruption takes place; or upon which the debt again becomes due, if at the time of the interruption or at any time thereafter the parties postpone the due date of the debt. We also see that we can have a judicial interruption of prescription i.e. the service on the debtor of any process whereby the creditor claims payment of the debt. Unless the debtor acknowledges liability, such interruption of prescription lapses, and the running of prescription will not be deemed to have been interrupted, if the creditor: does not successfully prosecute the claim under the process in question to final judgment; or prosecutes the claim but abandons the judgment or the judgment is set aside. If the debtor acknowledges liability, and the creditor does not prosecute the claim to final judgment, prescription shall commence to run afresh from the day: on which the debtor acknowledges liability; or upon which the debt again becomes due if at the time when the debtor acknowledges liability or at any time thereafter the parties postpone the due date of the debt. If the running of prescription is interrupted and the creditor successfully prosecutes the claim to final judgment without abandoning it or having it set aside, prescription starts afresh on the day on which the judgment of the court becomes executable. If any person is joined as a defendant on own application, the process whereby the creditor claims payment of the

Well I guess one must have a point of view. As stated in the beginning, this article is a combination of opinions that I could find and So what is the fuss???? - easy!!!! The Prescription added to it my own views. Least of all is it not a Act has NO penalty for overstepping the legal opinion, but it should give the novice on provisions of the Act - so who cared if the “Prescription” a pretty good start in studying Springbok died. We just ignored the fact this topic, which is as old as debt itself. that he is dead - we still went on to trace and chase him for his biltong - it was/is not a Trust that you will now know if my Springbok punishable offence or prohibited conduct to has been extinguished by prescription, or if trace, chase, collect or sell his biltong. This is in fact he has been given tacit, expressed and still the position for all other debt except debt enough water, to indicate that we want to keep falling inside the ambit of the National Credit him alive, during the 3 year period. Act once the National Credit Amendment Act is implemented. Then it will be prohibited JH Eugenè Joubert conduct to chase a dead NCA Springbok Chairman Corporate Rebels (one that prescribed and now forms part of extinguished fauna) for the biltong or value of his carcass and an administrative fine of R1,000,000 or 10% of yearly turnover could be imposed by the Tribunal. debt shall be deemed to have been served on such person on the date of such joining.

In conclusion I leave you with the dictionaries definition of “Extinguished”: Part of Speech: adjective. Meaning: of a conditioned response; caused to die out because of the absence or withdrawal of reinforcement. Similar: destroyed (spoiled or ruined or demolished). Main Entry: extinguish. Part of Speech: verb. Definition: kill; quash. Synonyms: abate, abolish, annihilate, blot out, check, crush, destroy, eliminate, end, eradicate, erase, expunge, exterminate, extirpate, obliterate, obscure, put down, put the lid on, quell, remove, squash, stamp out, suppress, wipe out. Antonyms: bear, create. Origin: Latin exstinguere (from ex- + stinguere to extinguish) + English -ish (as in abolish); akin to Latin instigare to incite.

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CONSUMER

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

DISCOUNT GAUTENG GOURMET

T N U O C S I THE D T E M R U O G G N E T U GA My husband and I work as volunteers in JHB so we live on a super tight budget. Even though we are cautious about spending the small amount of disposable income we have, every now and then we enjoy going out for something tasty to eat. We have learned to look for real value for our money. Gauteng can be an expensive place and I am horrified at the prices some people will pay.

Here are a few places that caught our eye, portions, left us so full that the amazing looking where you can enjoy something tasty without desserts had to wait for next time. (And I can eat, I tell you) breaking the bank: Cedar Lodge http://www.cedarlodge.co.za/beergarden/ This place is our ultimate favorite! Very good prices – and specials every day! Lunch specials between 11:00 – 15:00 – R50 for really nice, filling portions. Tuesday “all you can eat” sushi for R110 (they charge R5 for every piece left over – but it’s so yummy we don’t have any trouble finishing!) Wednesday “all you can eat” ribs and wings for R110. Thursday buy 1 get one for free pizza deal. Just a few things to take into consideration: Live music sometimes gets a bit too loud – but if you find a table further away from the music, you’ll be fine. Service can sometimes be a bit slow but the drinks come quickly, so if you are not in a hurry, it’s a perfect place to enjoy you afternoon/evening!

Pitstop Diner http://wikivillage.co.za/pit-stop-diner Friends took us here – you get a humungous burger for R50! Served with delicious, homemade mango achar. Fries to be ordered separately but – believe me – you don’t need to add anything!

Gilroy’s http://www.gilroybeers.co.za/ If you are a fan of hand-crafted beer, this is the place to go. The menu itself is not the cheapest, but if you want to spoil yourself for a very nice beer, you can’t go wrong with Gilroy’s. You can order a little test round of four beers, and then decide which is the best – and order that. Weekends get busy, so get there early, or make a booking – it’s often fully booked! (That’s how good they are) Friendly atmosphere and Leafy Greens the owner himself often comes to check if http://www.dining-out.co.za/md/Leafy-Greens-Café/5682 If you are looking for something different. everything is going ok. Only been here once, for our friend’s wedding – even though we are very much carnivores, Spur we really enjoyed the 100% vegan food. Tasty, http://www.spur.co.za And, of course, who can go without mentioning healthy, beautiful countryside venue! Spur! Since I moved to SA, it’s been my all-time favourite! Monday night two-for-one burger Tasha’s Cafe special warms our hearts. Don’t really have to http://www.tashascafe.com/ As we walked in to Melrose Arch Tasha – we say much – one of our JHB favorites is Ruimsig were a bit overwhelmed. Invited by others, we Spur – it’s not in a shopping mall, so you get wouldn’t have chosen this place – it looked more of a ‘special feeling’. too upmarket for our wallets. But we were pleasantly surprised! The menu was very By S Blue reasonably priced, and of course the cynics in us thought the portions were going to be miniature. My goodness – they were real

THE DCASA CONFERENCE 2014 The Debt Counsellors Association of South Africa (DCASA) held its annual conference in Gauteng recently. The event is a long standing one with a reputation for being well supported. At present, the largest number of Debt Counsellors in one province in SA operate in this area. The conference saw many DCs travelling from afar to attend the conference in Guateng at Emperors Palace just outside the airport in JHB. The event was held in one of the larger conference rooms at Emperors Palace.

THE DCASA CONFERENCE 2014 The Sponsors 11 Sponsors displayed at the event, including Hyphen, DCM/ NPDA and DC Partner. 3 Insurance providers had displays namely ONE, In2Insurance and Auto & General. Also in attendance were Maximus and Corporate Rebels. The sponsors were arranged around the outside of the conference hall with attendee seating in the centre and an elevated stage at the front with a large screen for visuals. The ever popular Consumer Friend also attended (they represent a number of companies and handle their debt review matters for them like Woolies, Truworths, RCS etc). Consumer Friend have maintained their good reputation through speedy turn around times as well as good systems, co-operation and support of the debt review process. They recently won an award at the 2014 Debt Review Awards which they were proudly displaying on the day. Debtfree Debtfree also attended and made copies of the Special Print Edition of the magazine available to those attending. The Special Print Edition is similar in content to the DIGI mag but is printed and distributed to those who may not have access to the internet. The recent Special Edition is entitled: The Benefits of Debt Review and promotes the process.

The Turn Out At present there are over 2500 registered Debt Counsellors in South Africa with an estimated 700 practicing country wide. By the time the DCASA Conference opened, there were over 250 people in attendance. This was a very good turn out from those in the DC community, Credit Providers, Attorneys and others related to the process were also seen in the audience. There was a high number of new faces and several new Debt Counsellors in particular were in the crowd. The Conference Mel de Silva opened the DCASA Conference with a few words (and some poetry) and acted as MC throughout the day. He handed out bottles of blue sparkling wine throughout the day to the presenters (and was questioned about why some of the bottles kept disappearing. However he never slurred his words, so everything seemed to be above board). The day was full of speeches by various presenters on matters to do with debt review and running a debt review business. In between speeches, attendees got time to mingle and visit the various sponsor stands. Lunch was served in the middle of the day and this gave guests a further chance to network and chat. After lunch, prizes from several of the sponsors (including Hyphen, Maximus and DC Partner) caught everyoneâ&#x20AC;&#x2122;s

an eye out for an article about prescription in this issue of Debtfree DIGI magazine]. He said that often “Consumers look for the miracle of debt being prescribed” but that this only The official welcome Paul Slot President of DCASA welcomed all applied under certain circumstances and that and began the day by relating some interesting consumers are not mean to abuse the process. figures about debt review. For example he That said it is there to ensure that credit mentioned the recent 35% increase in the providers actually take steps to collect or face number of consumers applying for debt loosing out on funds. After he discussed the review this year. He said that it is true that in origin of Prescription and how it is a bit of an reality millions more need debt help but rather old law how it has once again been brought to tend to look to new credit for a temporary stop the fore by the NCAA2014 (which has not been gap. For each Debt Review consumer there are implemented yet - but will be soon) another 40 consumers that probably should be in debt review as well but currently are not. The The Prescription Springbok challenge then is how to get more people to be This ‘bok’ can go without water (payment) proactive and apply for help before things get for 3 years but if it gets no water then it dies. out of control. Paul mentioned the need for a If you give it water (a payment or proper mindset change among consumers (no easy acknowledgement of debt) before 3 years thing). There is a clear need to get consumers it is refreshed and it can survive another 3 to apply for help sooner. Consumers need to years. But after 3 years without water the begin discussing their debt and Paul describes debt (springbok) dies. This is the thought of “Extinctive prescription” namely that the debt hiding debt problems as a “social disease”. To promote a better way of thinking about is now gone. He asked: after 3 years can some debt and dealing with debt, Debt Counsellors water (a repayment) bring the springbok (debt) need to tell consumers about the benefits of “back to life”? He answered: “no”. debt review. The benefits of the process are He then offered a brief summary of the 1969 clear. For example many consumers can see an Prescription Act: amazing 39% saving on repaying their debt by Ch 1 - has to do with acquisition of an item/ reductions in fees and interest through using property (“thing”) the debt review process. Paul said that DCASAs Ch 2 - has to do with rights extinguished when aim is to try assist [Debt Counsellors] in taking people have a servitude Ch 3 - has to do with prescription of Debt: and that next step” once again highlighted that ‘a debt shall be extinguished after the lapse of [most debt are Prescribed Debt The next speaker of the day was Eugene after 3 years]’ Joubert of Corporate Rebels who spoke in Interestingly a subsidiary debt (e.g. a surety) depth about Prescription. He is famous for also prescribes/lapses after this time. his use of the Springbok who can go without Section 10 (3) allows for payment after a water for 3 years to explain prescription. [Keep debt has prescribed but it does not revive attention and the winners were applauded with a mixture of disappointment and joy.

the debt. It is a valid payment however and the debtor can’t try reclaim payment later. The question he then raised was: When does prescription of a debt begin? He answered: as soon as the debt is due (as per contract- due date - not default date.) Then the prescribed periods of 3/6/15/30 yrs kick in. One thing that caught the attention of the audience was the Interruption of prescription periods. To do so the consumer has to make an “express and tacit acknowledgement of liability of the debt” That said even if the consumer does agree that the debt did exist the debt might already be prescribed and thus be extinguished, meaning no payments have to be made. Even a summons without any enforcement (or payment) does not revive or interrupt prescription. What about if you get a phone call and discuss the debt or start to negotiate payments? A negotiation about a debt does not mean an acknowledgement of the debt (after all you may have different views on what debt you are talking about or how much debt is involved etc). As regards Debt Counsellors acting on behalf of a consumer a 17.1or 17.2 2 is not an acknowledgement of debt but a proposal is. So be careful. Get the facts and check the dates before making proposals particularly ones to court where the consumer also submits an affidavit.

prescribed but it has been revealed that they collect on these prescribed debts anyway. Steve Laubscher of Samsung discussed the use of technology in business and how Debt Counsellors need to change their old views on technology and the place it plays in their practice (or any business). Samsung themselves have turned their brand around from years ago and now is seen as an aspirational brand. Steve discussed and explained “the cloud” and its place in business. He said that IT is now a lot easier than it used to be. There is no need for huge servers since so much is now cloud based. Samsung Printers basically have a small server built in now. These very fancy printers even allow you to print by tapping your tablet on the edge of the printer and it prints your document first before returning to other print jobs. He mentioned that DCs (and others) can have unique apps built for their clients for use on their cell phones to help their clients track their payments. His closing advice was that DCs add ancillary services for their clients to create additional revenue streams. Wise words. Reserve Bank Economist Aadila Hoosain next discussed things like the definition of a household, and the various categories of household debt.

She says they (SARB) are noticing that less If an acknowledgement of debt was acquired people are getting bonds and thus other forms by unfair tactics or coercion then it is not valid. of credit have become more popular. At the There are other things which would invalidate same time there has been a Slow down in loans an acknowledgement of debt too such as: Does and credit granting. While the numbers are the consumer actually understand the wording still high it is lower than it has been recently. and language of the acknowledgement? If Basically it seems that less people are asking not then it is not valid. Currently the Banks for loans and less people are able to afford a talk about R18 billion in debt that is actually loan.

medium/large Debt Counselling practices. Kedilatile Malakalaka of the NCR had to fight Recruiting, corresponding and the interview with attendee’s digestive process in what she process with consumers (and finding out all described as the speakers graveyard shift. She their info etc) takes most DCs 5.7 hours until briefly discussed past issues with regard to client signed up. This is similar in length to how implementing the NCA. The NCR are confident long it then takes to processing the consumer’s that the current amendments (and regulations) debt review application: 5.6 hours will improve things. She then went through some of the main amendments that impact on Next the Debt Counsellor has to get all the consumer’s figures from all their creditors the debt review space. Before closing she reminded creditors and Debt which takes on average: - 1.7 hours. This is Counsellors to pay their annual registrations a long time when it is simply comprised of fees or they will no longer be able to practices sending on average 7 distinct emails and then capturing the figures that come back. Fights as a PDA/CP or DC. with creditors who after years and years of Paul Slot delivered the final address of the debt review still can’t or won’t produce this day and dealt with the ever hot topic of Debt info quickly extend the time involved. Counselling Fees. Over the years DCASA has pioneered this topic and they recently Debt Counsellors then have to take all the engaged in country wide research among documentation and compile it into something members and other Debt Counsellors to try that can be presented at court. They will gather figure out how long it takes to do a complete all correspondence and replies to proposals, debt review from start to finish as well as how swear affidavits and get consumers and profitable or unprofitable debt counselling creditors copies of documents. This process can be. Paul revealed that out of the currently (excluding the time then actually taken at court +-700 active Debt Counsellors in SA 20% of itself) takes 10.9 hours This part of the process these DCs replied to DCASA’s research. Out of then is equivalent to the time taken to recruit, those 20% of the 700 (i.e. 140 DCs) 40 % of the interview, work out proposals and correspond replies came from non DCASA members (+-56 about them (what most people consider to be DCS). The idea of the research was in part to the “debt review”). It is almost a second debt give DCs something to weigh their business up review within the debt review. against as an industry ‘norm’. Paul contrasted research from several years ago that DCASA Various other aspects of the process were conducted into the same topic and showed also discussed like dealing with the PDA and how things have progressively become more helping consumers and CPs with additional time consuming and less profitable for Debt info throughout the process. Moving to the other end of the process it seems Counsellors. that helping consumers leave the debt review process by issuing clearance certificate takes Here are some of the ‘average’ figures: Some of the figures were split into small/ a very long 3.5 hours when added up. This is

mostly because of the constant fights about the industry has indicated that less than 10% of all Debt Counsellors now only offer debt review end balance differences. services. Most others combine debt review Debt Review Now Takes More than Twice As with other forms of work to supplement their income. Debt Counsellors make on average Long DCASA have identified 202 separate tasks in R87.20 per hour. At this point the crowd got a full debt review (excluding things at court very quiet as they saw figures. In fact you could which many DCs get attorneys to do) When have heard a pin drop. It was clear that the DCASA last did this research a few years ago audience did not like what they were hearing. the average time taken to help a consumer through debt review was 19 hours when DCs told to investigate Reckless Credit added all up. This figure has now shot up. In - Not worth it total DCASA say that a debt review from start Both the DTI and NCR would like to see Debt to finish now takes 53.3 hours on average. This Counsellors looking into reckless credit means that a debt review now takes more granting. This is when a creditor gives a than twice as long but that Debt Counsellors consumer credit which they do not understand have not been able to charge more. They are or cannot afford. At present Debt Counsellors getting the same amount of money in fees for cannot charge anything extra in anyway for more than twice as much work. This has then doing any sort of reckless credit investigation. become evident in how Debt Counsellors are The shocking figures which were revealed paying staff and themselves. In the past Debt show that on average to investigate just one Counsellors senior staff used to get around account for reckless credit takes 27hours. That R8000 and were very qualified but DCs can no is 8 hours longer than an entire debt review longer afford such qualified staff and now the from start to finish used to take a few years average salary for simplified duties is around ago. This then means that if a Debt Counsellor investigates and pursues 2 reckless credit R3000. accounts it will double the already double Professional Debt Counsellor get less than length of a debt review. Mine Workers Debt Counsellors can no longer afford to pay DC’s cant afford to help those who pay little themselves an average salary of R15 000 as DCASA’s research indicates that helping they did before and now they are normally consumers who pay very little can actually taking home R11 000. This professional wage cost the Debt Counsellors business money. then is less than that of a mine worker. This They say that R2878 is break even point for is a 33% reduction in income. When DCASA a debt review matter. This is a sad story as it spoke to some of the almost 2000 no longer may be that some consumers get turned away practicing Debt Counsellors about why they from help simply because the DC can’t afford were no longer helping consumers they to help them. In the past the NCR had a fund commonly were told that the business is no to help subsidies fees for the most vulnerable longer profitable. Some research by others in consumers but this was later pulled.

Bad Consumers 1 out of every 5 consumers who apply for debt review and have work done for them by the Debt Counsellor over +- 2 months do not pay anything at all and do not go through with the process. Ultimately this causes them huge problems but it also cost the DC in time and money. Currently in such a situation the DC get no compensation at all, since they cannot take more than R50 directly from a consumer at the beginning of the process. DCASA would like to see some sort of early cancellation fee instituted. It is unlikely that such consumers would actually pay this and legal action by the DC would then likely have to be instituted to collect the funds.

If you would like to get copies of the presentations from the various speakers you can visit the DCASA online forum here: http://www.dcasa.co.za/forum/index.php/topic,2166.0.html

Or contact them directly. At the end of the day DCASA were proud to announce their new â&#x20AC;&#x153;Debt Counselling in a Boxâ&#x20AC;? which is a fun pack of cards which detail aspects of the debt review process. The cards explain things like Debt Review jargon (used on some of the cards themselves) and how the process should work.

The conference proved to be a valuable opportunity for all those who attended to The topic of how to then make a DC business network and discuss pertinent matters in the more profitable was discussed. It seems industry. obvious that with the changed debt review process these days there is definitely room for improvement in regard to fees. Some asked if the reduction in after care fees from 5% to 3% after 24 months could be removed and would this help but it seems that while it would help it would only do so in a very small way. DCASA are now looking at a legal prep fee of some sort (non attorneys and advocates cannot charge for legal work) since this takes up 1/5th of all the time in the process. It is also clear that if the NCR and DTI want DCs to really pursue reckless lending matters they would have to look to incentives this financially somehow. Ultimately DCs also have to look at ways to speed up parts of the process (such as was initially envisaged via DCRS) so that they can reduce the time spent and thus increase their hourly rate. Technology and industry agreements might be the key here.

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2014

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

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

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The BDCF invites you to the workshop to Enhance DC’s with the Industry Changes/Developments Date: October 10, 2014 Venue: SBSA Head Office (30 Baker Street – Rosebank) Time: 09:30 – 16:00 We hope to host meetings in other regions on the below dates : Western Cape: OCTOBER 17, 2014 Kwazulu Natal: OCTOBER 24, 2014

www.bdcf.co.za

The cartels that are running our banking system, legal system and judiciary are being exposed and rooted out. In the latest expose below, see how the banksters continue to manipulate the system: http://news.acts.co.za/blog/2014/09/fraud-accusations-flyover-nedbank-liquidation-of-guest-lodge

This is happening all over the country. Blatant forgeries are being allowed and endorsed by the courts. www.newera.org.za

Want to come to our AGM? It will be held on the 17th of OCT at KWV in Paarl. Contact secretary@allprodc.org for more info or to book your seat. We had a meeting with NCR on 17 Sept 2014 to discuss CIF and our letter about African bank (see last month’s newsletter). www.allprodc.org

SEPTEMBER

NEWSLETTER Credit Industry Forum AllProDC have met with the NCR in regard to all matters at the Credit Industry Forum and the CIF procedures and our concerns surrounding this. We also submitted several comment documents in regard to various matters based on our members views to the CIF. Below are a few highlights from the Mag Court Sub Committee document. Magistrates Court Process We have called for a standardized process across the country to help speed matters and create uniformity. We still feel that the MCA Rule 55 is not ideal and that lack of uniformity is hurting consumers and making additional work for all parties including the courts themselves. We highlighted the present Gauteng Courts service by sheriff issue (which is costing troubled consumers around R230 extra and delaying the process) and ignoring of the Declaratory Order process.

Rustenburg and Knysna Courts who seem to be obstructing the process for so many minor reasons that it is almost impossible to have matters resolved in those courts. Draft Regulations comments to the DTI The DTI called for comments and we submitted a document based on our members comments. While the document covered many matters some key thoughts where: We questioned the lack of regulation regarding ADRAs (training req & scope of work) and asked that the minimum requirements for DC & staff training be clarified. We think that this would be a good time to include the commonly used/requested 17.3,17.4 and 17.7 Notices. We have urged that the COB figures become the pivotal point in the process until restructuring occurs. We called for inclusion of a withdrawal process in the new regulations for both consumer and DC (for various reasons). We also highlighted our concern about the proposed PDA fee structure.

We named the courts across the country where DCs are required to be present unnecessarily for consent orders and mentioned the issues at the

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