Debtfree DIGI Sept 2016 by Debtfree Magazine

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

September 2016 www.debtfreedigi.co.za

What you can expect from Hyphen PDA: • Increased Debt Counsellor Profitability • Flawless Systems • Meaningful Reporting • Contented Consumers!

Chris van der Straaten, Head: PDA 082 557 0437

Malcom Povey, Head: Operations PDA 082 445 5604

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Don’t expect to hear an endless amount of “spin” around why things failed!.

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DEBT COUNSELLING EXPLAINED

We asked Debt Counsellor Chris Craven of Zero Debt all about the Debt Review Process.

Due to the poor economy and sometimes unplanned changes in situation millions of South Africans are struggling to repay their debt. The same debt that, in the past, was easy to manage can become harder to handle with the cost of living increasing or sudden changes to your household income. More and more consumers are finding that they are over indebted or that their creditors are asking them to repay more than they realistically can repay each month. Thankfully the National Credit Act, provides consumers with an alternative way to manage their debt. Since 2007 over indebted consumers can apply for debt review with help from a professional Debt Counsellor. Debt counselling really protects troubled consumers from overly aggressive creditors who are quick to take legal action and not willing to listen to and understand a consumerâ&#x20AC;&#x2122;s situation. Consumers benefit, because they get to pay more a much more manageable monthly amount and the creditors benefit because they donâ&#x20AC;&#x2122;t have to take legal action (which costs a lot) and know they will receive regular payment monthly. A Debt Counsellor negotiates on behalf of the consumer for better repayments amounts from their creditors and then refers the matter to Court. Creditors are much more willing to negotiate with a Debt Counsellor that they trust than they are to deal direct with a consumer who they do not know. With debt review credit providers know that the consumer really is truly over indebted and cannot afford the monthly payments and is not simply just trying to pay less than they originally agreed to. The biggest mistake that many consumers make is that they wait too long before they get serious about sorting out their debt. Many people wait and hope that their situation will suddenly improve. This seldom happens. Ignoring your debt will not help. It only makes things worse. If you leave your problem for too long, not even debt counselling can help. That is why it is better to get professional help sooner. If you are having debt problems talk to a Debt Counsellor who is registered with the NCR.

CONTENTS STRESS!

HOW TO DEAL WITH STRESS

BUILDING A SOLID DEBT COUNSELLING PRACTICE PART3

Constitutional Court Rules On Garnishee Orders

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 entire article on it. We conclude our 3 part series about call centre debt review operations this issue with interesting news about developments at the NCR in regard to this issue. If you are a consumer looking for a Debt Counsellor or a Debt Counsellor yourself you will want to look at that. So, picture yourself not too long from now (in a beach ready body) relaxing in the sun. Take a deep breath. Feel the light breeze wash over you as the sea laps at your feet. Ah, it feels good to be relaxed and even better to be debt free.

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.

Professional Debt Counselling Attorneys

T e l : 021 872 1968 1 1 MARKET STREET, PA ARL w w w. ste y nco etze e.co.za

Who are the NCR? The National Credit Regulator is a part of government which was created when SA received the National Credit Act in 2007. The National Credit Regulator or NCR for short, register credit providers, payment distribution agencies, Debt Counsellors and Alternative Dispute Resolution Agents and they monitor everyone in the credit industry to make sure they stick to the National Credit Act.

INDUSTRY

CONSUMER

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

Repo Rate Remains Constant

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 staved off an increase for the moment but economists predict that another rise will follow before year end.

NCT Rules Against Lewis

After some press articles about Lewis Stores insurance practices, the NCR conducted an investigation into whether Lewis was actually selling insurance, against losing your job, to pensioners. The investigation revealed that this practice had been going on for many years along with selling the same type of insurance people to self employed people who could also never claim. The NCR referred the matter to the National Credit Tribunal (NCT). The NCT recently ruled against Lewis for these breaches of the National Credit Act and ordered a full independent audit and that Lewis pay these consumers back. The NCR now intend to ask the NCT to fine Lewis several million rand in punishment. Lewis Stores now arguably carries the distinction of being the first big credit provider which the NCR has really successfully taken to the NCT.

VBS Mutual Bank in Whistle Blower Scandal

Established in 1982 and operating with a banking licence since 2000 the Venda Building Society Mutual Bank -which is part owned by the legally disputed vhaVenda King, who SA President Zuma was previously planning to coronate- have been hit by scandal as an inside source has leaked concerning information. The whistleblower has supplied the press and SARB with documentation showing that the bank has supposedly lent R136 Million to a firm which two high ranking bank officials (Chairman and COO) have secret undeclared interests in. The loan was to buy shares in a big oil company. VBS Mutual Bank recently received a lot of press attention when they loaned 74 year old President Zuma R7.8 Million over 20 years.

NCT Training

Certain types of debt review applications can be heard by the National Consumer tribunal (NCT) rather than a magistrates court. The process of completing and filing such applications is slightly different from the normal court process. Some Debt Counsellors have been asking for training from the NCT and the NCT have now arranged two training workshops in JHB and CT during October. The training in JHB will take place on the 17th and in Cape Town on the 21st. Those wanting to attend are asked to email rsvp@thenct.org.za

NEWS CONTINUED

Constitutional Court Ruling on Garnishee Orders

The case of a group of poor farm workers who went to the Western Cape High Court over their “garnishee orders” has been heard by the Constitutional Court. The Court upheld that the consumers Garnishee orders were not properly done and have further ruled that the Magistrates Court Act wording needs to be adjusted and that every ‘Garnishee order’ application by a credit provider needs to be considered by a Magistrate or judge.

Banking Investigation Called Off

It is always awkward when, in government, one hand does not know what the other is doing. This seems to have been the case when government Minister Mosebenzi Zwane who was assigned to help investigate why the banks suddenly stopped doing business with the Gupta family during all that negative press- announced that the Judiciary would investigate the banks and banking practices. His plan would possibly have seen the Banks Act changed and the Finance Minister in control of banking licences. This made the markets weary just when the Rand had started to do OK again and put the Minister right in the middle of a war between the SARB, the Guptas, Finance Minister Gordhan and several other leading politicians. It was then that the Presidency threw the Minister under the bus saying that this would definitely not be happening. In the wake of this furore several political factions have called for sever disciplinary action against Minister Zwane.

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We are very proud of the achievements of Hyphen PDA at the 2016 Debt Review Awards. Simplicity Debt Counsellor Software is a Hyphen PDA Business Partner.

Stress! Noun: A state of mental or emotional strain or tension resulting from adverse or demanding circumstances. Example of use: “he’s obviously under a lot of stress” Synonyms: strain, pressure, tension, nervous tension, worry, anxiety, nervousness

Stress can actually benefit us, after all it is actually your body’s way of responding to any kind of demand.

Are you stressed? Most people are. For many people it has become the normal state of existence. Even young kids at school will tell you how their school work and tests are stressing them out. If you are dealing with debt or troubles at work or home then no doubt you are feeling stressed. Stress can actually benefit us, after all it is actually your body’s way of responding to any kind of demand. It can be caused by both good and bad things. Now when people feel ‘stressed’ by something that happens, their bodies react by releasing a flood of chemicals into the blood. These chemicals give people more energy and strength, which can really help if their stress is caused by physical danger. It can make you jump higher, lift up heavier things and run faster. But stress can also be a bad thing, if the reason for the stress is something emotional and there is no outlet for all this extra energy and strength especially is this the case if the stress continues for a long time. The longer it goes on the worse it is for us. Why Stress Is Bad For You While it seems obvious to say stress is bad for you (it is), many don’t realise how bad. Emotional stress that stays around for weeks or months can weaken your bodies immune system, cause high blood pressure, make you feel tired or depressed and it can even lead to heart disease. Your body is not designed to have all those chemicals constantly flooding your system and it can change the way your body works or make it not work at all. For example, some adrenaline is good but too much for too long and you become lethargic and feel burnt out.

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

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Things That Cause Us Stress

Many people experience stress about a variety of different things from the small to the large. Each person is unique so what stresses you out can be unique as well but there are also many common sources of stress at home and at work. Work Stress For most people being stressed at work is very common. It might be that you are just unhappy at your job or it may be that you are working too long for too little pay. Maybe your boss is an idiot of note or you realise that there is no chance of you getting a raise any time soon or of moving up in the firm. Some people unfairly face discrimination or even harassment at the office which is a large cause of stress. Work stress can leave you desperate for Friday to come along and experiencing the ‘Monday Blues’. Stress At Home Stresses at home also abound. These are sometimes called ‘life stresses’ and can have a big impact on our happiness. The biggest causes of stress can relate to the death of a loved one, which is devastating or the progressive failure of one’s marriage leading to divorce. For many the loss of their job can places all sorts of strain on their relationships at home. In this economy the ever increasing financial obligations and all too common debt can weigh you down. Many also face chronic illness or injury with all that brings. When We Worry Excessively It is not only external things which cause stress. Sometimes stress comes from inside our own heads. You can stress yourself out just by worrying about things that have not happened or may never happen at all. Alternatively you may worry about things over which you have absolutely no control. For example, you may experience fear over possible violence to you or a loved one in a terror attack. Even though such things happening to you are typically not extremely likely, their vivid coverage in the media may make them seem as if they are much more likely to occur than they really are.

The Way We Think About Negative Situations It is a reality that somewhere, somehow something bad will happen to us. It might be small things or maybe larger more serious stuff. Interestingly your attitude towards the situation makes a big difference to your personal stress levels compared to other people going through the same thing. For example, if your house is burgled and your laptop is stolen and you think to yourself “It’s OK, my insurance will pay for a new one,” you’ll be far less stressed than if you think, “My laptop is gone and I’ll never get it back! My life is over! What if the crooks come back to my house to try rob me again?” While the first way of thinking reduces stress, the second only makes it much worse. Since you have little control over what happens next your attitude can determine if you are able to successfully deal with the situation or simply fall apart. Unrealistic Expectations of yourself and others No one is perfect. If you expect to do everything right every time then you are going to definitely feel stressed when things don’t go 100% as expected. When you expect others to deliver 100% you will be disappointed 100% of the time. No one is perfect. Changes They say moving homes can be a big cause of stress. Not just the packing and unpacking but the underlying change in your situation. In fact, any big life change (good or bad) can be stressful. Starting a new job or getting married, both of which are good things, can really stress you out. Never mind more unpleasant thing in life. We all secretly hate change and it stresses us out. Debt Stress Worrying about debt is a extremely common source of stress in most peoples lives. With half of all credit users in South Africa 3 months behind on some of their debt repayments this is one of the most common causes of stress. One of the reasons why debt is so stressful is that it is often a cause of worry for a very long time period. Unlike other things like a car accident, a death in the family or divorce dealing with debt can be a ongoing situation that lasts for decades. According to Kelly McGonigal, who is a health psychologist at Stanford University: “Our bodies are designed to respond to … ‘emergencies’ and bounce back, whereas owing money can become completely inescapable.” Several studies have shown that people who have bonds to pay off (normally over decades) generally require more medical health care over time. Also the way that credit providers go about collecting debt can be a source of stress. Scary letters and harassing sms or visits from dodgy looking people who embarrass you or invade your private space and threaten more and more trouble, if we don’t pay, are all designed to stress us into paying no matter what.

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How to Deal With Debt Stress

If stress is so bad for you and so many people have stress over their debt then it is important to know how to deal with debt stress or it might begin to negatively effect you. The good news is that there are various ways to reduce your stress and improve your happiness. Some steps are easier than others and the points we will look at next are not all encompassing but they will give you a few main ideas to work with. Have The Right View Of Money First, you have to consider how it is that you feel about money. Do you love it? Hate it? Always want more? Do you see it as a tool to get what you need? Does having more money make you more important? Coming to an understanding of your own deep thinking about what money is and what part it plays in your life can take a while. Sit down and think about it. Are there other things in your life more important than money? Consider what they might be and why? Do really want the money or is it the things money gives you that you want? Recognize That Using Credit Gives You a False Sense Of Freedom A study revealed that even when consumers had maxed out their credit and could not hope to repay their debt they still felt a feeling of freedom when their credit limit was extended or someone else gave them more credit. McGonigal says that recent research shows that â&#x20AC;&#x153;people who are stressed out go into yet more debt in order to feel powerful.â&#x20AC;? That powerful feeling is false and taking on more debt will only later increase your stress levels. Practice Self-Control. A social psychologist from Florida State University, conducted experiments that showed we only have so much mental energy for exerting self-control. In other words, your ability to control the urge to spend can become fatigued with constant use. So while you can resist buying snacks at the beginning of your monthly shop by the time you get to the checkout process the shop may tempt you into breaking your resolve not to waste money. Guess where they put the sweets these days... The good news is that self control is like a muscle. The more you use it in small measure (like by budgeting or making a shopping list) the stronger it can become. Allowing you to last longer under continued marketing pressure.

The good news is that there are various ways to reduce your stress and improve your happiness. Some steps are easier than others and the points we will look at next are not all encompassing but they will give you a few main ideas to work with. Have The Right View Of Money First, you have to consider how it is that you feel about money. Do you love it? Hate it? Always want more? Do you see it as a tool to get what you need? Does having more money make you more important? Coming to an understanding of your own deep thinking about what money is and what part it plays in your life can take a while. Sit down and think about it. Are there other things in your life more important than money? Consider what they might be and why? Do really want the money or is it the things money gives you that you want? Recognize That Using Credit Gives You a False Sense Of Freedom A study revealed that even when consumers had maxed out their credit and could not hope to repay their debt they still felt a feeling of freedom when their credit limit was extended or someone else gave them more credit. McGonigal says that recent research shows that “people who are stressed out go into yet more debt in order to feel powerful.” That powerful feeling is false and taking on more debt will only later increase your stress levels. Practice Self-Control. A social psychologist from Florida State University, conducted experiments that showed we only have so much mental energy for exerting self-control. In other words, your ability to control the urge to spend can become fatigued with constant use. So while you can resist buying snacks at the beginning of your monthly shop by the time you get to the checkout process the shop may tempt you into breaking your resolve not to waste money. Guess where they put the sweets these days... The good news is that self control is like a muscle. The more you use it in small measure (like by budgeting or making a shopping list) the stronger it can become. Allowing you to last longer under continued marketing pressure. Don’t Shop When You Feel Down A study in the Journal of Experimental Social Psychology showed that we are more likely to shop for fancy items, and buy expensive stuff on credit, when our ego or self-worth is threatened. This can come in many forms from watching bad news on TV to being turned down for a promotion. Some say that people buy fancy brand name items because they want to signal positive things about themselves to others but a recent study from the London Business School shows that simply going shopping and buying expensive stuff emotionally comforts the purchaser (regardless of what others might think) especially when they feel sad.

Violation Response This fancy term really just means that people buy more to make themselves feel better about all their debt. It might sound crazy since that will cause more debt but it happens. It is also called the “what the hell” effect and was first identified in research about dieting. People tend to eat to feel better about things like…wait for it…being over weight. They reason that since they are already over weight another bite won’t hurt. In fact it will make them feel better. Sadly eating more makes them more overweight and so they feel they need to eat more to feel better. It’s a vicious cycle. The same can happen with debt because buyer’s remorse and more debt feeds our stress levels and so we head back out to spend more to feel better. Have the Right View of Debt Debt is bad. Bad for the people who gave you the money which you already went out and spent and now can’t pay back. It is a problem that the credit provider has. Not the consumer. So how do credit providers deal with that bad situation? They get collection agents to make the debt the consumers problem. They pester, harass and bother you until the consumer si the one who feels bad. The credit providers threaten consumers with negative credit bureau listings which simply reflect a simple truth. The consumer can’t afford more credit. This is fact. So, why stress about it? Debt is a credit providers problem. The problem for the consumer is having people pester you and threaten you about the debt. This is why a process like debt review, which stops the pestering while making realistic repayment plans is so beneficial to consumers. If you have debt why not get rid of it? Many consumers who are under financial pressure to make ends meet make poor decisions about their debt. For some who are in a massive debt hole they somehow think taking on more debt will help. Others make poor budgeting decisions every single month. Often consumers who come to Debt Counsellors for help will be fending off repeated stressful calls from collections agents all day long on their credit cards but will also be spending lots of money on satellite TV, multiple mobile phone contracts or be paying for other peoples debts rather than their own. Talking to a neutral professional, like a Debt Counsellor can be a real eye opener. More than that there are options like sequestration or debt review built into the countries laws which can help reduce your debt and thus reduce your debt stress.

Tips For Reducing Stress If you are experiencing stress at work (maybe you are an overworked underpaid Debt Counsellor) or home then here are some steps you can take to reduce your stress levels. Identify the sources of stress in your life. Understanding what it is that is really stressing you out will help yu plan to deal with it. Learn healthier ways to cope with stress. Donâ&#x20AC;&#x2122;t bottle up all your stress and donâ&#x20AC;&#x2122;t turn to the bottle to deal with your stress. Get Active Research clearly shows that being active makes you feel better. It makes you look better and releases all sorts of good chemicals that your body needs. Being healthier also reduces medical costs on average. Connect to others. someone to vent Reach out to a colleague at work Help someone else by volunteering Have lunch or coffee with a friend Ask a loved one to check in with you regularly Accompany someone to the movies or a concert Call or email an old friend Go for a walk with a workout buddy Schedule a weekly dinner date Meet new people by taking a class or joining a club Confide in a clergy member, teacher, or sports coach

Practice the 4 A’s.

void unnecessary stress

Learn how to say “no” – Know your limits and stick to them. Whether in your personal or professional life, taking on more than you can handle is a surefire recipe for stress. Distinguish between the “shoulds” and the “musts” and, when possible, say “no” to taking on too much. Avoid people who stress you out – If someone consistently causes stress in your life, limit the amount of time you spend with that person, or end the relationship. Take control of your environment – If the evening news makes you anxious, turn off the TV. If traffic makes you tense, take a longer but less-traveled route. If going to the market is an unpleasant chore, do your grocery shopping online.

lter the situation

If you can’t avoid a stressful situation, try to alter it. Often, this involves changing the way you communicate and operate in your daily life. Express your feelings instead of bottling them up. If something or someone is bothering you, be more assertive and communicate your concerns in an open and respectful way. If you’ve got an exam to study for and your chatty roommate just got home, say up front that you only have five minutes to talk. If you don’t voice your feelings, resentment will build and the stress will increase. Be willing to compromise. When you ask someone to change their behavior, be willing to do the same. If you both are willing to bend at least a little, you’ll have a good chance of finding a happy middle ground. Manage your time better. Poor time management can cause a lot of stress. But if you plan ahead and make sure you don’t overextend yourself, you’ll find it easier to stay calm and focused.

Be more assertive. Don’t take a backseat in your own life. Deal with problems head on, doing your best to anticipate and prevent them. If you’ve got an exam to study for and your chatty roommate just got home, say up front that you only have five minutes to talk.

dapt to the stressor

How you think can have a profound effect on your stress levels. Each time you think a negative thought about yourself, your body reacts as if it were in the throes of a tension-filled situation. Regain your sense of control by changing your expectations and attitude to stressful situations. Reframe problems. Try to view stressful situations from a more positive perspective. Rather than fuming about a traffic jam, look at it as an opportunity to pause and regroup, listen to your favorite radio station, or enjoy some alone time. Look at the big picture. Take perspective of the stressful situation. Ask yourself how important it will be in the long run. Will it matter in a month? A year? Is it really worth getting upset over? If the answer is no, focus your time and energy elsewhere. Adjust your standards. Perfectionism is a major source of avoidable stress. Stop setting yourself up for failure by demanding perfection. Set reasonable standards for yourself and others, and learn to be okay with “good enough.”

ccept the things you can’t change

Some sources of stress are unavoidable. You can’t prevent or change stressors such as the death of a loved one, a serious illness, or a national recession. In such cases, the best way to cope with stress is to accept things as they are. Acceptance may be difficult, but in the long run, it’s easier than railing against a situation you can’t change.

Don’t try to control the uncontrollable. Many things in life are beyond our control― particularly the behavior of other people. Rather than stressing out over them, focus on the things you can control such as the way you choose to react to problems. Look for the upside. When facing major challenges, try to look at them as opportunities for personal growth. If your own poor choices contributed to a stressful situation, reflect on them and learn from your mistakes. Learn to forgive. Accept the fact that we live in an imperfect world and that people make mistakes. Let go of anger and resentments. Free yourself from negative energy by forgiving and moving on. Practice gratitude. When stress is getting you down, take a moment to reflect on all the things you appreciate in your life, including your own positive qualities and gifts. This simple strategy can help you keep things in perspective.

Make time for fun and relaxation. Maintain balance with a healthy lifestyle. Eat a healthy diet. Well-nourished bodies are better prepared to cope with stress, so be mindful of what you eat. Start your day right with breakfast, and keep your energy up and your mind clear with balanced, nutritious meals throughout the day. Reduce caffeine and sugar. The temporary “highs” caffeine and sugar provide often end in with a crash in mood and energy. By reducing the amount of coffee, soft drinks, chocolate, and sugar snacks in your diet, you’ll feel more relaxed and you’ll sleep better. Avoid alcohol, cigarettes, and drugs. Self-medicating with alcohol or drugs may provide an easy escape from stress, but the relief is only temporary. Don’t avoid or mask the issue at hand; deal with problems head on and with a clear mind. Get enough sleep. Adequate sleep fuels your mind, as well as your body. Feeling tired will increase your stress because it may cause you to think irrationally.

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BUILDING A SOLID DEBT COUNSELLING PRACTICE PART 3

STAYING ON TRACK

Getting things done on time, and at the right time, is one of the biggest challenges for a Debt Counsellor. This especially true as our practices begin to grow and we become reliant on other people to perform administrative tasks.

There can be many hold ups along the way, and if the Debt Counsellor is to avoid unnecessary work caused by non-adherence to time lines, then it is vital that technology be harnessed to assist. This is why Maximus is built around the Debt Counselling Process. From the very first interaction with the client, Maximus helps to keeps the Debt Counsellor on track with the help of three very special features, built right into the system: Firstly, Maximus helps the Debt Counsellor to navigate the case through the Debt Review process by providing a structured Workflow. From the time that the client’s details are captured as a Lead, progress is managed and tracked by Maximus utilising these workflows. Each workflow representing a different phase of the process. These Workflows extend from Interview to CP Verification, Proposals and Legal to Aftercare and Collections and many more. Maximus also offers a check list for each phase, to ensure that everything that needs to be done and checked at each step is verified. Max even records who did what, and when, so that any errors can be addressed. Within each Workflow, there are a number of possible statuses for each case, for example “Awaiting Documents” could be found in the Approval Workflow. Every status in turn has specific time frames associated with it. These time frames are worked out, not only to ensure that the case is always completed in time, but also to help prioritise work that needs to be done. Priorities are represented by colour coded Traffic Lights, popularly called RAG (Red, Amber and Green.) By using the RAG feature Debt Counsellors are always able to ensure that work is timeously completed. As practices grow it becomes necessary to have more and more data available for a “view from the top”. Maximus is unique in that it is able to provide the Debt Counsellor with a number of customised management reports, in Excel spreadsheets, on a daily basis. These reports cover such matters as sources of business, overdue status of cases and an overview of the progress of every single case. With the Maximus Suite of Management tools a Debt Counsellor can be comfortable that his or her Practice is well watched over and that every single customer will be competently dealt with. Knowledge is power and Maximus’ technology provides the Debt Counsellor with limitless knowledge about every aspect of the Debt Review Process.

Contact Maximus on 011 451 0041

Next month we will explore further ways that Maximus helps Debt Counsellors to build a successful practice.

What is a Garnishee Order? A â&#x20AC;&#x2DC;Garnishee Orderâ&#x20AC;&#x2122; is the term most people use for when a portion of a consumers salary is deducted to pay off a debt. The debt is paid directly to the credit provider or collections agent before the person gets their salary payment from the firm. In actual fact these are really something called an Emoluments Attachment Order or EAO for short. A true Garnishee Order is something a little different but most people mix the term for a EAO up with the term Garnishee Order.

All professionals have professional indemnity if the unforeseen happens. Do you as a professional Debt Counselor have professional indemnity as stipulated by the ethical code?

086 111 2882

Telephone 0861 112 882 Facsimile 086 605 9751 Mobile 082 449 6856 EMAIL andre@in2insurance.co.za

www.in2insurance.co.za

MELIORLEAF WONâ&#x20AC;&#x2122;T LOAD YOUR PREMIUMS OR REPUDIATE A LEGITIMATE CLAIM Specialist insurance for people in debt review. Ask your debt counsellor.

CALL US NOW 0861 635 467 www.meliorleaf.co.za

Constitutional Court Rules On Garnishee Orders

Has a collections agents ever threatened you that should you fail to pay something today they will get a summons against us and send a sheriff to take our stuff from your home and get a garnishee order against your salary? Few things sound more scary for a consumer who is deep in debt and trying to keep their head afloat.

Some debt collectors cunningly ask consumers to sign a piece of paper to say that they have been past and chatted to them. Sometimes they say it is a vehicle inspection form. The consumer doesn’t realise the danger of signing a form without closely looking at it (or the second page) and soon they get told by their employer that money has to be deducted from their income each month due to a garnishee order. At Marikana many mine workers were getting little to no pay at the end of every month due to the various garnishee orders on their salaries for debts they had been neglecting to pay. It lead to protest and ultimately blood on the streets as the workers could not take it any longer. DAVID VS GOLIATH When a group of poor farm workers in the Western Cape were hit with a series of “garnishee” orders that left them penniless at the end of each month they decided to get help. A class action court case ensued with the banks and collections agents like the notorious Flemix on one side and the poorest of the country on the other with the help of the University of Stellenbosch Legal Aid Clinic. With the fate of the entire standard collections process on the line (as well as the longevity of those firms who collect solely through EAOs) the battle soon heated up. Civil rights groups grew interested and the country watched as a real David and Goliath situation unfolded. First Heard In the WESTERN Cape High Court The matter was heard in the Western Cape High Court where the ruling went the way of the consumer. The Court ordered that an EAO could not be granted without the proper oversight of a Magistrate or judge and that if naughty collections people tried to get EAOs somewhere else in the country rather than where the consumer works of lives then these were not valid. The Court went further and said that perhaps the process was unconstitutional. How Garnishee Orders Got a Bad Name Collections companies (the outside lawyers for the banks and credit providers) have a terrible reputation for “forum shopping” at courts around the country. This is where they find a friendly court that will normally just give them what they want without too many questions. Particularly a court where a clerk of the court (rather than a Magistrate) might just stamp the draft ‘garnishee’ order quickly in the back room somewhere. Some people even accuse some of the collections agents of giving bribes to these clerks to do so. The EAO applications to take part of a consumers salary would then receive a so called rubber stamp. No consideration would be given to if the consumer could actually afford to have that particular amount taken off their income each month and still cover their basic needs.

Hearing Matters Far Away Hurts Consumers When a ‘garnishee order’ is granted in a court in a far away province it is very, very difficult for a poor consumer to ever get to that court to defend/query or ask that the order be changed. This has basically meant that most consumers have never been able to change these EAOs. To make matters worse it seems as if many consumers have had more money taken off their salaries than the law allows. The law specifically prohibits a credit provider to take off more than double what is owed when the consumer starts missing payments. This is know as NCA Section 103(5) in duplum. Sadly many consumers have paid for years and years way beyond this double up limit set by the law. However since the court is so far away they can never get to have the order rescinded unless they somehow can pay an attorney in that area to go to court for them. The constitutionality of this was then also a big issue. When the W Cape Court ruling came out it called into question the entire normal way credit providers and collections agents were operating. Some wondered if it was the death of ‘garnishee orders’. For many months few, if any, EAOs were granted in the W Cape as courts receiving applications asked if the collections agents had researched the consumers situation and knew that they could afford to repay the amount asked. Few ever do. They normally just stick a figure on the draft order and plan to collect their commission portion on the amount. Other provinces also began asking these hard questions and the banks panicked. They commissioned their legal experts and rallied important government departments to challenge the ruling leading to it finally being heard at Constitutional Court. The Constitutional Court Ruling Courtroom The Constitutional Court ruling does not copy the W Cape high Court ruling 100% but it differs only slightly. The ruling amends some of the wording and grammar in the Magistrates Courts Act 1944, particularly section 65J of the MCA which will have a big impact on how things are currently done. The ruling emphasizes the need for an EAO amount to be appropriate and issued after everyone is satisfied it is just and equitable. This should then mean that people are not left with less than they need each month to cover their basic reasonable costs and calls for some investigation into the circumstances and figures involved. The ruling also stresses that a Magistrate or Judge must hear any EAO matter that is sent to a court and that they would be involved in a ruling on the matter and not some other court employee. The ruling states that such orders require judicial oversight. Also discussed was the process of consumers signing that they would automatically consent to judgement or that they would allow the matter to be heard in a court far away. Though the Con Court said they saw the possible benefit to the credit providers from this the risk of taking away

a consumers right to appear at court was just too great to ignore. It was ruled that the consumer must be able to attend and defend if they wish and so the court must be where they work or live. As such consumers should not be asked to sign away this constitutional right. The ruling however does not change a consumers right to consent to making a payment via an EAO that is then submitted to a court. This means that not only are the many consumers who were originally part of this legal actions ‘garnishee orders’ invalid but that thousands of other current applications for ‘garnishee orders’ currently sitting in courts around the country (not old ones - which were excluded from this judgement) may need to be reworked or simply thrown in the bin. This is going to have a massive impact on firms like Flemix (formally Coombe & Associates or something similar) who make all their money off easy garnishee orders and their commissions on those. The various credit providers and collections involved in the case begged the court not to say that the ruling effects old EAOs since this might crash the entire banking and collections system. This is what they call a systemic risk. The Con Court passed the buck somewhat and asked that the matter be looked into by the Treasury and Reserve Bank and other relevant parties but held off on making a retroactive ruling at this point. The Tide is Turning Against Garnishee Abuse This judgement ties in nicely with a new bill about the abuses of Garnishee Orders being prepared by parliament. It seems that years of abuse and misuse of these EAOs is finally coming home to roost. Consumers who do feel they are being garnished too much each month can approach legal help to have these orders reviewed and change and if paid up removed. Though costly in the short term it can lead to refunds and provide great relief long term.

Talk to a Debt Counsellor or Attorney about it If someone asks you to sign consent to being garnished when you first take out credit this is not legal. If someone comes to you when you have missed payments for a while and ask you to sign that you will accept a garnishee order this is something a consumer can do but if they don’t want to then the credit provider can try take the matter to court and have a Magistrate consider all the facts and figures before any such EAO is put into effect. So “garnishee orders” are not dead. They are just very, very badly hurt and are going to continue to be hard to get through court. More consumers will have the chance to go to court and defend these matters and ensure that only a reasonable amount is deducted from their salary (if at all). The Ruling is a great victory for consumers constitutional rights.

Who are the NCT? The National Consumer Tribunal or NCT, for short, was created in 2007 to assist with various aspects of consumer protection and the National Credit Act. For example, if the National Credit Regulator find a registrant - like a bank or Debt Counsellor - is breaking the National Credit Act they can take them to the NCT and ask for a big fine or even deregistration. Consumers can also apply to the NCT for help with various things like when a credit provider refuses to send you a statement. An order from the NCT is seen the same as an order from a High Court.

Maximus, the leading debt counselling software is proud to congratulate our PDA partners

on their exceptional success in the Debt Review Awards. Maximus is the original System Partner to Hyphen PDA.

Contact Maximus on 011 451 0041

DEBT COUNSELLING COMMUNITY SUPPORT DCCS Wish To Thank All Debt Solutions For Their Support following:

DEBT COUNSELLING COMMUNITY SUPPORT How long have your offices been practicing as a debt counselling firm? All Debt Solutions opened its doors in 2013 and we are very proud to say that we have just had our 3rd anniversary. What is your vision for your consumers entering the debt review process? Our vision is to bring our clients relief. The process is there to help people who are financially stressed and we are there to help them get through it. We pride ourselves on “bending over backwards” to assist our clients, as our clients are our number one priority. Having a happy client is very rewarding. We also strive to educate the consumers who need help and those who want to enter the debt review process. If you could change one thing in the industry , what will it be ? We would change the way a debt review client is seen, specifically in the insurance environment. We don’t think that consumers who make the responsible decision by being placed under debt review should be prejudiced in any way.

T: 0861 255 3328 | F: 086 585 8366 | www.alldebtsolutions.co.za

If you want to help or get involved in this project, you can contact: admin@dccsupport.co.za

South Africaâ&#x20AC;&#x2122;s leading Debt Counsellors Click through to

www.creditmatters.co.za or call our national call centre on

086 111 6197

IN A NUTSHELL

Christmas in September The ringing of Santa bells, the smell of roast Turkey, and presents under the Christmas tree... these are the things many look forward to on 25 December. For those that are fortunate, the festive season may be coupled with a bonus, an end of year holiday, or planning a major purchase, like that flat screen TV that youâ&#x20AC;&#x2122;ve been eyeing.

It is one thing to reminisce about Christmas, but the other is to plan ahead. It is common practice for people to head straight into December without thinking carefully about how they spend their hard earned money. People too often pile on debt during this time of year to stretch their budgets. This means that in January and beyond you may still be paying off Christmas debt long after Santa’s bells have stopped ringing. So how does one avoid falling into the traps of end-ofyear overspending? Here are a few tips to suggest to your clients.

Step 1 – Understand your budget Sit down and draw up a budget. If you have money left over after paying for essential living expenses (food, bond, school fees, etc.), as well as your debt repayments then, put some of this aside towards your end-of-year spending.

Step 2 – Lists are helpful Draw up a list of people who you intend giving gifts too as well as planned expenses over the Christmas period. Set a spending limit per person and start scouting ahead of time for specials, so you don’t get caught in the Christmas rush.

Step 3 – Assess your debt Have you got a large overdraft? Are you swamped by too much credit card debt? If you are in this situation, don’t overstretch your overdraft or credit cards over Christmas. Use this time of year to consolidate your debt and instead if you’re fortunate use 80% of that end-of-year bonus to pay it off. Yes, it may sound unattractive, but that is wise spending and a good investment in a financially healthy future.

Step 4 – Start an emergency fund Even if you pay off your debts consistently, unexpected events happen, which may force you to dip into your overdraft or credit card. Instead start an emergency fund that protects you when life doesn’t go according to plan.

Step 5 – Back to School Retailers are notorious for spoiling Christmas fun. Just when we want to keep remembering Christmas, they replace all their displays and advertising with the dreaded Back to School campaigns. Again create a Back to School Fund that covers uniforms, stationery, and any extra schooling costs.

Step 6 – Choose your luxury expenses carefully Luxury expenses like a holiday, a new TV, a new golf set should ideally be paid from discretionary income. “Discretionary income is the amount of an individual’s income that is left for spending, investing or saving after paying taxes and paying for personal necessities, such as food, shelter, and clothing. Discretionary income includes money spent on luxury items, vacations, and nonessential goods and services. “ - Investopedia It is unwise to finance these items from debt mechanisms like your credit card or overdraft. If you cannot afford a holiday, consider staying home and being creative with your free time instead - take day trips to cultural spots, go to the local park for picnics, rent home movies or spend quality time relaxing with friends and family.

Step 7 – Review At the end of January do a quick review of how you handled your finances over the festive season and note your learnings for the following year. Are there things you could have done better? Under what circumstances did you overspend? What actions did you take that made you proud?

With less than 100 days till Christmas, start planning for it in September. You won’t regret it.

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

Upcoming Regional Meeting Dates: Gauteng Branch Meeting 26 October 2016 Time: 11:00am Venue: Kempton Park Golf Club W Cape Branch Meeting 1 November 2016 Time: 10:00am Venue: Parow Golf Club KZN Branch Meeting 1 November 2016 Time: 10:00am Venue: Health Haven

Join us on Facebook: https://www.facebook.com NewEconomicRightsAlliance/

DCASA AGM 15 November 2016 Time: tba Venue: Kempton Park Golf Club

www.dcasa.co.za

As an association we promote both debt counselling and consumer education as well as B-BBEE for our industry. For more info about joining the BDCF please visit our webpage.

www.bdcf.co.za

www.newera.org.za

Cape Town meeting postponed as our host has been unwell. A new date will be advised shortly. Members can download a presentation on the envisaged debt review process on our Facebook Group. Non members please just send us an email and ask if you are interested: zune@allprodc.org

www.allprodc.org

SEPTEMBER

NEWSLETTER NCR Guidelines and the CIF Boycott Our decision in regard to the invalidity of the CIF and NCR issued Guidelines stands. We are taking further steps and consultation in regard to the NCR’s response to our concerns as expressed in our open letter. BEST WISHES Our long time member and finance officer Hennie Vermaas has been dealing with some health issues and we are thinking of him and wish him the best as he deals with this challenge. VALUE ADDED PRODUCTS AND DEBT REVIEW Some members have noted a concern about credit providers cancelling, making changes to or including credit life insurance into debt restructuring proposals or counter proposals. By law a bank (or other registered Credit Provider) is required to instruct the duly registered agent for the insurance (where it is applicable) to contact a consumer for continuation or cancellation of credit life protection. Per the National Credit Act and subsequent Amendments, insurance premiums cannot be included under debt review. NCA section 8(2)(a) clearly states that insurance is NOT a credit agreement. In terms of NCA Regulation 24, insurance is part of consumers ‘essential living expenses’ and in terms of NCA section 86(7)(b) and (c) only CREDIT AGREEMENTS may be restructured. All registrants of the National Credit Regulator are required to uphold the Act. On this matter the wording of the Act is very clear. Any contradictory guidelines issued by anyone regarding insurance is only an opinion and due to the wording of the NCA is non-binding. If the guideline contradicts the NCA it is invalid. As such, many AllProDC members have decided that they will not include insurance into their draft debt review rearrangement orders.

www.allprodc.org

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

DCASA Explain Why The NCR Task Team Agreement Can Benefit Your Practice In 2009 the NCR commissioned a task team to look at voluntary enhancements to the NCA and ways to reduce deadlocks in the debt review industry. The NCR Task Team Agreement guideline was approved by the NCR in 2010. In 2015 all CIF members confirmed the content of the Task Team Agreement. The members of CIF agreed that the Task Team and DCRS play an important role in the Debt Review process. This enabled the NCR to issue the Task Team Agreement as guidelines to the industry. CIF also noted that, for a number of reasons, debt review industry players lack detailed knowledge of the NCR Task Team Agreement Guidelines and this has negatively impacted on implementation by some. In addition to this the usage of DCRS is unacceptably low. To address these issues the CIF has agreed a number of actions: CIF recommended that compliance to the NCR Task Team Agreement Guidelines should be enforced. The NCR is now in the process to try obtain legislative authority to issue enforceable guidelines. This project when finalised will allow enforcement compliance. DCRS was reviewed and a number of system enhancements were approved. These system enhancements will be commissioned as soon as the NCR has finalised the ownership and housing of DCRS. This is an urgent project which needs to be finalised by October/November 2016. Should this not be possible a lack of funding might jeopardise the ongoing availability of the DCRS Calculator system to Debt Counsellors and Consumers.

CIF also agreed a need for NCR Task Team Agreement Guidelines Training. DCASA has responded by launching a NCR Task Team Guidelines Training booklet at the recent DCASA Annual Conference. This training document provides a summary of the responsibilities and all parties involved in the Debt Review Industry, a detailed DCRS guideline and subsequent CIF agreements relevant to the process. DCASA will also provide NCR Task Team Guideline Training at the upcoming DCASA Regional meetings. The aim is to reach Debt Counsellors and their staff with the proposed training and to dramatically increase the usage of DCRS by all Debt Counsellors. The aim is to increase DCRS usage from the current 13% to 70% in a years’ time. Some of the reasons why Debt Counsellors should consider use of DCRS include: • A consumers’ cash flow can improve by up to 39%. This reason alone should be enough to motivate usage. • Consumers will rehabilitate sooner. • Debt Counsellors will spend less time restructuring proposals. • No counter proposal through DCRS speeds up the process. • DCRS also speeds up the court process. • Adherence to agreed processes reduces disputes between DC and Credit Provider. Although the DCRS system changes have not yet been implemented this should not stop Debt Counsellors to use DCRS. Debt Counsellors can also request from their Debt Counselling System providers through their PDAs. Although some Credit Providers have been slow to implement the NCR Task Team Agreement, the good news is that major Credit Providers have pledged commitment to implement the provisions of the NCR Task Team Agreement Guidelines and this includes guaranteed acceptance of DCRS proposals which solve. DCASA encourage all Debt Counsellors and their staff to study the NCR Task Team Agreement Guidelines and to dramatically increase the use of DCRS. A number of Debt Counsellors are already using DCRS extensively and they report high rates of approval of DCRS proposals by all major Credit Providers. The electronic training document and slides are available to every Debt Review Industry participant and can be requested from DCASA by e-mail at: dcasa@dcasa.co.za

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