Debtfree Magazine April 2017 by Debtfree Magazine

South Africa’s debt counselling magazine

I’LL DO IT MYSELF April 2017 www.debtfreedigi.co.za

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

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April is normally a relaxing month. It is all these public holidays which create short weeks and many take time off to relax and recuperate. Business owners normally find this time of the year less restful as they deal with staff challenges and interestingly credit providers also struggle to make collections on their debt around this time of year as consumers make poor decisions and prioritise fun over their obligations. This issue we talk about making poor choices about debt and in particular a poor choice that some under debt review sometimes make without thinking things through. We also have advice on shopping, good news for parents with kids who love computer games, lots of news about some pretty big things going on in the industry and a letter from a reader about a hot topic. We also catch up on the latest to do with the Debt Review Awards this year. This awards process recognizes excellence in the debt review industry and an industry wide peer review is underway which leads to the Debt Review Awards evening gala (in JHB this year) in June. We also recap a warning message about your debt review payments. Some consumers have been negatively affected because they do not take note of the messages on their PDA statements. Be sure to check it out to avoid any future problems. If you have been dealing with debt for a long time then the urge to just let go and have a little fun is strong but as we discussed in the March issue, you do not need to spend money to have fun. These public holidays should be about sleeping late, spending time with family and friends and changing up your routine. If you stick to your debt repayment plan then soon you might change the routine of paying off debt for a new one of starting to create wealth. But donâ&#x20AC;&#x2122;t relax just yet. First, you need to get debt free.

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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 editorsâ&#x20AC;&#x2122; panel and the author of the content, as applicable. Debtfree Magazine, authors and contributors reserve their rights with regards to copyright of their work.

C O N T E N T S

I’LL DO IT MYSELF

I’ll Do It Myself There is a honeymoon period for consumers who enter the debt review process. At first, there is the relief of not having to worry that you no longer “have a plan” in place to deal with your debt. Then, there is the relief of not being chased by all your creditors all the time. Compared to the stress of the past few months it is bliss. Over time however the novelty wears off and many consumers start to think about the way ahead. Interestingly, even though their circumstances do not significantly change, many consumers come to the conclusion that they no longer need the services of their Debt Counsellor.

They reason to themselves:

“Why pay fees to a Debt Counsellor every month? Why not manage things myself?” Let us discuss the four main reasons why some consumers feel this way.

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Iâ&#x20AC;&#x2122;LL DO IT MYSELF

These are some of the common lines of thinking among those who decide to try cut their own Debt Counsellor out of the process. Letâ&#x20AC;&#x2122;s look at them and discuss why this way of thinking is tragically flawed and will only result in the consumer suffering terrible consequences.

A Credit Provider Calls Misunderstanding A call from someone saying they work of the Debt Review for such and such bank and that they Process have not been getting payments can be a stressful thing to hear for a consumer who thought all was well with their debt review. They may begin to worry that their Debt Counsellor (who they just met compared to such and such bank) is not doing their job or maybe even stealing their money.

Many consumers feel that once the arrangements are in place with their credit providers then they are set in stone and they will exist without the services of a Debt Counsellor. After all the matter went to court and a court order is in place.

Saving On Fees

I Don’t Need A DC

Each month during the debt review process a consumer has to make small payments to their Debt Counsellor. They also have to pay fees to the people who handle their payments (the Payment Distribution Agent). Rather than pay these fees each month for what appears to be no real significant service perhaps these funds can be used to pay toward the debts.

Once the Debt Counsellor has negotiated with the Credit Providers and the court order is granted what further need is there for a Debt Counsellor? Maybe in the future one might be needed to issue a “clearance certificate” but until then do I really need to pay a Debt Counsellor each month? Besides, many reason, my Debt Counsellor is so slow to answer my questions and offers poor service.

Iâ&#x20AC;&#x2122;LL DO IT MYSELF

Flawed Reasoning

It is important to note that debt review cannot be done without a Debt Counsellor. It would be like telling MTN that you no longer require their services after only 3 months of a 24 month contract. If you stopped paying them each month what would happen? Would you continue to enjoy the benefits of your mobile contract? Similarly debt review only works when the Debt Counsellor is paid their small professional fee each month.

A Credit Provider Calls While it can be scary to get a call from some stranger who says your debt review payments are not showing, how do they know? Who are they? It is likely they work for an outsourced collections agency who get commission if they convince you to pay or worse yet may be scam artists. Are these the type of people you feel confident to trust just

because they claim to be from such and such bank? That would be the same bank who are busy negotiating with the Debt Counsellor or who have just agreed to a payment plan. Why would they change their mind? If no payment had been received wouldnâ&#x20AC;&#x2122;t every credit provider all call you at the same time?

Iâ&#x20AC;&#x2122;LL DO IT MYSELF

FLAWED REASONING

Misunderstanding of the Debt Review Process The Court order for your debt review was not done in your name. An application was done in the name of your Debt Counsellor with you and your creditors as respondents. Therefore, in a weird twist of fate, the order is actually the Debt Counsellorâ&#x20AC;&#x2122;s. If you do not stick to the order (which may something like so and so is the Debt Counsellor) then you are in breach of the order. Refusing to pay the agreed contractual fees would therefore be

a huge problem and would end the services of your Debt Counsellor. This has left many people as technically under debt review (and thus not able to access further credit) but without a Debt Counsellor. Other Debt Counsellors may be willing to take on the case at a later stage but could charge you up to half the overall fees again and that is only if they decided to take on such a problem case.

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I’LL DO IT MYSELF

FLAWED REASONING

Saving On Fees Half of all the fees for the normal debt review are paid in month one and two. After that the fees are small each month. Leaving debt review after month 2 means that half of all the fees would be wasted. That would not save you money. PDA fees may add up over time but so would monthly debit orders for various credit providers. Rather than spend hundreds on multiple debit orders now there is only one payment saving you time and effort and debit order fees each month.

If you stop paying your Debt Counselor and continue paying each creditor according to the plan (and never slip up on the agreed changing amounts), one day you will need a clearance certificate from your “former” Debt Counsellor. At this point they will ask you for all the missing fees in between. So... no saving there. You would just have delayed paying them over time for a later date in bulk.

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?

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Iâ&#x20AC;&#x2122;LL DO IT MYSELF

FLAWED REASONING

I Donâ&#x20AC;&#x2122;t Need A Debt Counsellor

Yes, yes you do!

The debt review process as structured in the National Credit Act calls for a Debt Counsellor to assist both creditors and consumer to reach agreement and make payment arrangements. Creditor providers also often want to see your situation reviewed annually.

To do this they need a voice they can trust to be objective and realistic. This is not your voice but that of a NCR trained and registered Debt Counsellor. Since a consumer cannot issue themselves a clearance certificate when the debt review is over the services of your Debt Counsellor are going to be needed. As they will throughout the process should your circumstances change (improve or deteriorate).

I’LL DO IT MYSELF

You Need A Debt Counsellor

Trying to stop making use of a professional Debt Counsellor in the middle of a Court Ordered debt review is like waking up half way through a surgery and telling the surgeon that he can go home and you will take over from here. The idea is a bad one and no one would ever think of doing it. The fees you pay your Debt Counsellor each month are tiny compared to the savings made through debt review where many credit providers drop their monthly account fees. The court order for your debt review probably mentions the use of a PDA and is in your Debt Counsellor’s name. When problems arise it is great to have the advice of a professional counsellor who knows your situation well and has access to all your documentation and case history. The most you ever pay in fees happens right at the start so there is no significant saving should you try to stop paying your Debt Counsellor. In fact what you may be doing is destroying the debt review and that puts your assets at risk. You could find the banks taking legal action against you and yourself without access to crucial documentation or assistance when you need it most. This can lead to you losing your car or home. So, don’t try go it alone and don’t believe strangers who call making wild claims about missing payments. Rather work with your Debt Counsellor to use the debt review process to the full.

Sudden Increase In Income?

If your situation drastically improves then talk to your Debt Counsellor about how you can either leave the debt review process and return to your original debt obligations (sadly with all the original interest rates and fees) or increase your monthly payments to significantly speed up the repayment term. If you are able to settle up smaller debts and leave the process then try to do so as soon as possible but make sure your Debt Counsellor gives you the go ahead and helps you put firm written agreements in place with your creditors as to how that will happen..

Problems With Service?

If you have been getting what you consider to be poor service, be sure to talk to your Debt Counsellor personally about it. Many times, you could be getting poor service from a staff member and your Debt Counsellor will want to know about that so they can correct the situation. Other times you may have unrealistic expectations of what a Debt Counsellor is empowered under the National Credit Act to do or how fast they can do certain things. Only a candid conversation will help clarify these matters and bring it to the Debt Counsellors attention. Do not quickly try run to another firm before trying to resolve matters with the Debt Counsellor who knows your situation the best.

Shop To Save

No matter what city or suburb you live in, we can all agree that food prices are always going up. Even if you manage to find something on special, it’s often a perishable item, and so will not last long. When looking to get more bang for our buck we need to focus on savings on the main ingredients we use for most meals. We call these our staples. Factory Shops Are Not Only For Clothes

A smart way to stretch your food budget is by buying staple items from factory shops. Although many of the items at food factory shops are at their expiry date, or very close thereto, these items very seldom go “off”. Also you can check the dates and then prioritise certain meals over others to make sure the items are still in the suggested use by date time period.

A smart way to stretch your food budget is by buying staple items from factory shops. Although many of the items at food factory shops are at their expiry date, or very close thereto, these items very seldom goto â&#x20AC;&#x153;offâ&#x20AC;?. you can checkover the dates and then prioritise certain meals over others By heading theAlso factory shops conventional supermarkets you can savetoamake the items are still initems the suggested by date period. fair sure amount by buying such as,use soups intime a can (or packet), spaghetti, beans, chickpeas, onion & tomato mix, cereals, chutney & tomato sauce, coffee, oats & nuts By heading to the factory shops over conventional supermarkets you can save a fair amount by buying from factory shops. items such as, soups in a can (or packet), spaghetti, beans, chickpeas, onion & tomato mix, cereals, chutney & tomato sauce, coffee, oats & nuts fromitems factorybought shops. from factory shops this Below is a price comparison between a few

month & is a anormal grocery store: Below price comparison between a few items bought from factory shops this month & a normal grocery store:Item Spaghetti (500g) Onion & Tomato mix (410g) Wellington Chutney (470g) Oats (raw & rolled) 1kg Chickpeas in brine (410g) Caffe Mokambo Argento (250g) Nutrific raisin & coconut (480g) Household cleaning gloves Liqui Fruit (1 litre)

Totals

Average shop price R20.00 R10.00 R25.00 R30.00 R19.00 R60.00 R24.99 R34.99 R20.00

Factory shop Price R16.50 R6.50 R15.00 R16.90 R6.50 R33.52 R16.50 R8.90 R11.50

R243.98 R131.82

Saving by buying at factory shop R3.50 R3.50 R10.00 R13.10 R12.50 R26.48 R8.49 R26.09 R8.50

R112.16

price comparison exercise done in Cape TownTown using the following Factory Shops: ThisThis price comparison exercisewas was done in Cape using the following Factory Shops: The Shop TheLiberty Liberty Shop 23 Bolt Street 23 Bolt Street Montague Gardens Montague Gardens

Rialto Foods 19 Bolt Avenue Montague Gardens

Foodies Grocery Factory Shop Unit 3, 112 Princessvlei Rd Diepriver

One mistake those who are dealing with debt often make is see spending money as a bad thing. That is not the case. We need to spend money each month to provide Rialto Foods our families with the things we need. The real secret is knowing when and how to spend our money wisely. Sometimes you have to shop wise to save.

JUNK STATUS What does it mean for you

You will start paying more on interest Food, electricity and petrol prices will increase while your salary stays the same Unemployed increases due to lack of funding, factories shutting down and retrenchments The Government will be forced to spend less on social programmes Low financial confidence, which leads to low investments and no new job creation Rand will be worth much less, which will make imported goods much more expensive Thanks to

Payment Distribution Agencies NEVER change their bank details. Do not let anyone try convince you otherwise! If you get a call asking you to query your monthly payment debit order and change bank details, call your Debt Counsellor immediately to talk to them about it.

INDUSTRY

CONSUMER

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

NCR Guideline about Sold On Debt

The National Credit Regulator (NCR) have issued a notice to all credit providers, debt collectors and credit bureaus about the credit bureau listing of any debt that has been sold. The guidelines or non binding opinion reminds any company that buy or acquires debts that collecting on such means they are acting as a credit provider and need to register with the NCR as a credit provider.

ABSA Vs DCASA

ABSA recently issued an industry wide circular about how they view debts under debt review after 30 days. The notice pretty much stated that they want to receive a form (called a 17.2) in this time or will automatically assume the consumer is not over indebted and carry on with their normal collections process. The Debt Counsellors Association of South Africa (DCASA) immediately sent correspondence calling this practice into question and pointed to several issues with ABSAs plan. Other associations have also expressed concern.

Cabinet Shuffle Sees Instant Junk Status Rating

When the President announced a cabinet reshuffle that saw the Former Finance minister removed over night and new Finance Minister Malusi Gigaba appointed. International Ratings agencies reacted almost as quickly in downgrading their ratings of SA’s Sovereign debt. Nation wide protests resulted and the Rand took a nose dive before slowly clawing it’s way up again. Minister Gigaba has served for many years on the cabinet and is a former ANC youth League President and Home Affairs Head (you will recall the unabridged birth certificate development during his time there) but has little economic experience. This combined with other economic factors have left the ratings agencies with little confidence in SA. SA was once before rated as junk status and managed to turn things around to just ...”not great” status and it remains to be seen if this might be the case again.

http://www.consumerfriend.co.za/roadshow/

NEWS CONTINUED

Calls For Reckless Lending Investigation Into Presidential Loan

The issues surrounding Nkandla are many and have been much discussed an leveraged for political ends. Now political party FF Plus are asking that the NCR investigate the Presidential loan of R8 million (at 8%) granted by VBS Mutual Bank be investigated for possible reckless lending.

Debt Review Awards Gala Date Announced

The Annual Debt Review Awards Peer Review is currently underway with the final rounds happening during May. The peer review process culminates with a small Awards Gala which is being held in Gauteng this year on the 10th of June.

DC Partner To Hold Cape Town Event

Payment Distribution Agency, DC Partner are hosting an event at the Stellenrust Wine Estate in Stellenbosch, Cape Town on the 11th of May. The event is a full day seminar which will feature presentations by various speakers on topics relating to debt review and running a successful debt review practice. .

NCT launch Automated System

The National Consumer Tribunal (NCT) have been struggling to handle a growing backlog of cases for a very long time. Indeed rather than take on more staff the organization took on more work and has found popularity with regard to certain debt review applications. The latest move in an effort to reduce the workload and backlog of cases is an automated system which can be used to submit (and pay for) cases. The NCT Case Management System can be accessed by going onto www.thenct. org.za and clicking the “Links” tab then “Case Management System” on the dropdown menu.

NCR Stop PDAs Paying Their Clients

Debt Counsellors make use of Payment Distribution Agencies (PDAs) to collect fees from consumers. Debt Counsellors also need to pay an annual renewal fee to the NCR each year. Last year a huge price hike of several hundred percent was announced and a new annual payment date. Some Debt Counsellors were asked to pay a prorate amount recently for their fees. Other Debt Counsellors who had not paid their fees for a long time were asked to catch up payments by the NCR. It seems the NCR

NEWS CONTINUED

were not getting much joy and thus took the unprecedented step of ordering the 3 registered PDAs to withhold the Debt Counsellors in questions payments. The NCR have taken a firm stance on the matter and are delivering on their promise that Debt Counsellors who neglected to pay must start the application for registration process all over again (this has a reputation for taking several months). For many firms affected it could effectively mean they will go out of business and their clients might suffer. There are complaints from those who say they have paid but whose funds have not been allocated and the NCR are investigating these matters. Though there has been a cry of outrage no one has as yet taken the NCR to court over the matter. Debt Counsellors are urged to pay their annual renewals which are soon due. At the same time Debt Counsellors, Politicians, consumer rights activists and those affected began to ask if they had been victims of reckless lending. The NCR launched an investigation into some of the cases (it seems around 70 of the thousands of matters) and recently came to an agreement with ABSA. ABSA have agreed to pay a R10 Million fine and to come to an arrangement with the affected consumers, which will enable them to retain their vehicles and make manageable repayments each

month. Though this is a small victory and will greatly assist these consumers, the public are asking is the fine enough, what happens to the other creditors and consumers? The NCR have said that they intend to lodge a case against Satinsky.

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2017 Debt Review Awards CLICK HERE TO REGISTER

DEBT REVIEW AWARDS 2017

The Peer Review Process There are thousands of NCR registered parties in the country. Three Payment Distribution Agencies, several hundred practicing Debt Counsellors and thousands of credit providers (most of them smaller companies). Though there are many Debt Counselling firms (in different sizes and with vastly different set ups) the debt review process follows a pretty structured flow. So, often rather than what is done to help a consumer and credit provider make a new debt repayment plan it is how it is done. The Debt Review Awards Peer review process allows credit providers to comment on how different debt counsellors work and what their experience has been in dealing with them. The peer review process also works the other way around as Debt Counsellors get to weigh in on how various different types of credit providers are dealing with debt review applications and proposals. The Debt Counsellors get to analyze whether a credit provider supports the process or resists good proposals. They get to review how speedy and efficient they find these different companies to be. Since many different NCR registered parties all get to have a say, it allows for all this data to go onto an audited data base and helps to identify who are doing the best out of all the different role players. They may all be following the same processes but by crowd sourcing all the peer reviews, some firms naturally float to the top.

Top 5

Each year the top 5 debt counselling firms are identified in each size category. For example, the top 5 Boutique Debt Counsellors are identified, the top 5 Large Debt Counselling firms and the top 5 National Debt Counselling operations are named. This helps other firms in the industry identify who they should imitate in their offerings and helps recognize all the hard work done by these firms in leading the way.

Peer Review

The Debt Review Awards Peer Review has been underway for some time now and the opportunity for NCR registered parties to participate in the final two rounds of the peer review will happen during the first and second weeks of May 2017. The Peer Review focuses in on 10 main functions of Debt Counsellors, PDAs and credit providers. The various reviews all contribute to overall statistics which are compiled and audited resulting in the top performing companies in the industry. Invitations to participate in the coming 2 phases of the peer review will be sent out via email.

Have You Registered?

If you would like to win an award or participate in the peer review process (and are an NCR registered industry role player) then be sure to sign up here:

CLICK HERE TO REGISTER *Only NCR registered parties.

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IN A NUTSHELL

JUNK – that’s SA’s status. What is yours? Standard and Poor and Fitch rating agencies have downgraded South Africa to non-investment grade or junk status. This is not the first time that South Africa has been downgraded; the last time was during the 1990’s. By the year 2000 South Africa had regained financial investment respectability. This is an indication that the situation can turn around, but it requires good governance, good leadership, good economic planning, and good financial choices. Countries are not that different to individuals. Without good governance, good planning and good financial choices people become seriously overindebted. The good news is that if you are already under debt review, you decided a while ago that you needed help to navigate your way out of crippling debt. Given the current downgrade, that was a very good decision. The bad news is that the impact of the economic downgrade is going to have a serious impact on

many families. It will become more and more difficult to access loans from banks and paying off loans will become more difficult as costs start rising. The depreciation of the Rand will lead to increased fuel and food prices, resulting in potential inflation and longer-term potential interest rate hikes. When is the right time to ask for help? According to the national treasury, South Africa’s current debt is R2.2

trillion and 50% of South Africa’s income or gross domestic product goes towards servicing this debt. Like South Africa, over-indebted individuals spend a disproportionate amount of their income towards servicing their debt. If you are struggling to meet your debt obligations now is the time to ask for help. Debt counsellors play a vital role, particularly in difficult times. Make sure that the debt counsellor you select is registered with the National Credit Regulator (NCR). Your debt counsellor will explain the debt review process in full. They will also prepare a budget and negotiate a monthly repayment plan with all your creditors. Getting into this process early means that you gain an advantage prior to the escalation of interest rates, which will make it more expensive to service your debt. Another underestimated benefit of debt review is the value provided by a Payment Distribution Agency.

One payment safeguards your assets Payment Distribution Agencies (PDAs), like the NPDA, are independent companies accredited by the NCR who are authorised to collect and distribute money on behalf of over-indebted consumers. The NPDA plays a valuable role in the industry by removing the burden of multiple payments and consolidating this into one monthly payment. Payment distribution agencies, collect one monthly payment from consumers and distribute it to their various credit providers, according to their debt repayment plan. Besides the convenience of ‘one monthly payment’, there is also a meaningful saving in debit order transaction fees associated with one payment, ultimately safeguarding valuable assets. The country’s junk status is a warning to all of us to take more care, to govern our lives with more discipline and to never be afraid to ask for help.

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

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

Linked Insurances

Credit Life (and other debt-linked insurances) remains complex within the Debt Counselling industry. These insurances usually make provision to cover certain eventualities like disability, retrenchment and death. For this reason, a Debt Counsellor cannot cancel any such insurance policy that is linked to a credit agreement unless the Debt Counsellor is registered with the Financial Services Board (FSB). Also, a Debt Counsellor cannot sell a replacement policy, only a registered Financial Services Provider (FSP) is allowed to do this.

Save Consumerâ&#x20AC;&#x2122;s Money

Nevertheless, there are great opportunities for Debt Counsellors to save Consumerâ&#x20AC;&#x2122;s money by referring business to a registered Financial Services Provider (FSP). In turn, the Debt Counsellor can earn some commission for the business lead. This is quite different to the Debt Counsellor selling a policy. Debt Counsellors must ensure that they do not engage with a Consumer in terms of the replacement of any policy, as this is unlawful. If any replacement policy must be implemented on the Debt Counsellorâ&#x20AC;&#x2122;s system, it can

only be done after the Consumer has agreed to the new policy with the new insurer. In this case, the Credit Provider (whose policy is being replaced) must be notified in the proper manner. A further risk to linked insurances is that the payments towards the policies (linked to the credit agreement) must be maintained - even during the first couple of months when the Consumer is paying their Debt Counselling fees. Should the Debt Counsellor, through the plan, interrupt the Credit Life or other insurance payments, the Consumer may not enjoy cover. In the event of a claim under these circumstances, the Consumer could have recourse to the Debt Counsellor for causing the interruption. This is a nightmare situation that no Debt Counsellor wants!

Catering for months one and two

Fortunately, Maximus is always mindful of legal obligations and risks that Debt Counsellors face, and therefore caters for insurance linked payments within all plans, even during the first months of the Debt Review. This way, the client remains protected throughout, and the Debt Counsellor is not exposed to the risk of a potential claim from the Consumer or his estate. Another exciting development is that Maximus is in the process of integrating with a major Credit Life replacement policy provider. When this is implemented, Debt Counsellors using the Maximus platform will be able to legally and seamlessly refer clients for replacement policies, thereby saving the client money and generating some extra revenue for themselves.

As with everything in Maximus, minimal effort will be required from the Debt Counsellor. Exciting news indeed. Till next time

Max Next month we look at the information you need to run a successful practice.

Contact Maximus on 011 451 0041

Die Republiek van

SKYT AFRICA Groete aan Almal, wat n deurmekaar maand. Sedert ons laas gesels het, het daar so baie dinge gebeur wat ons almal affekteer. Afgradeer na Rommelstatus, daar is iets aan daardie woord Rommel wat n mens sommer vuil laat voel al is jy skoongebad. Sit nou die dag by my gunsteling watergat en die ou langs my brom dat hy kan dit aan sy gatsak voel dat sy Bank afgegradeer is, hy wou geld by die OTM trek en sal dit nie vir hom te vertelle het daar is onvoldoende fondse nie. Sien vertel hy my; sy bank het nou ook nie meer geld nie. Vra hy my toe later of die Republiek nou onder skuldberadering is? Ek wou eers lag maar toe tref dit my dat dit eintlik nie so n dom vraag is nie. As die Republiek onder skuldberadering was sou iemand, n verantwoordelike

iemand, mos nou gehelp het om na die geldsake om te sien. Dit het my laat dink aan diegene wat onder skuldberadering is, as jy jouself nou wragtig verder finansieel wil laat afgradeer â&#x20AC;&#x153;fireâ&#x20AC;? dan jou skuldberader die kanse is dan goed dat dat jy in k@kstraat gaan opeindig en om later daaroor spyt te wees en te kerm by al wat leef en beef gaan nie help nie. Daar is niks wat ons aan die rommelstatus van die Republiek kan doen nie en soos ons almal al gelees het gaan dinge ongelukkig erger word voordat dit gaan beter word. N pleister of Mecurocrome gaan hierdie wond nie genees nie en ons sal maar geduldig

moet wag vir n roof om te vorm. Al raad wat ek het is beheer dit waaroor jy beheer het, moenie n rommelstatus op jouself trek nie want dan gaan die lig in die tonnel moontlik n trein wees wat aankom en dit gaan verdomp seermaak. Al voel n mens lus om soos Forrest Gump aan die hardloop te raak moes hy ook op die einde homself maar tot sinne bring. Daar is n woord wat ek in die Army geleer het. Vasbyt! Vasbyt beteken maak

nie saak hoe seer, moeg, moedeloos of naby aan opgee jy is nie daar is makkers/familie wat op jou staatmaak en oorwinning is die beste medisyne. As jy kans het check bietjie die song van Jethro Tull â&#x20AC;&#x201C; Nothingâ&#x20AC;&#x2122;s Easy. Onthou daar is musiek vir elke mood maar dan is daar ook musiek wat jou mood kan verander. DIE LEWE BLY N LIED al gaan hy so wan en dan heeltemal uit tune uit!

Groete van die Republiek van Skyt Akfrika. Christo Hattingh Kyk gerus my LinkedIn profile: https://www.linkedin.com/in/christo-hattingh-351a52130/ * Seriously please do let us know if you found this article to be funny/offensive/amusing/interesting feedback@debtfreedigi.co.za

Debt Counsellors Associations Announcement Board

Regional Meetings Kwa-Zulu Natal: Western Cape: Gauteng: Freestate: Eastern Cape:

19/05/17 23/05/17 23/05/17 12/05/17 21/07/17

Check out this huge banner that someone draped over the N1 highway in Joburg: http://ewn.co.za/2017/01/09/fnb-customertakes-fight-with-bank-to-the-streets

The Date of the DCASA Annual Conference is Wednesday the 16th August 2017

www.dcasa.co.za

1. The Executive committee will hold its first meeting by end of March 2017 2. The main focus in 2017 is on ensuring that all BDCF members comply with all legislation, regulations and conditions of registration. 3. Our communication channels will be strengthened to enhance accessibility by members. 4. Special projects will be launched around April in areas such as Incapacitation or death of DCs, usage of PDAs by consumers, as well as fees. 5. Members and supporters will be fully engaged when the projects are launched to ensure maximum input and participation.

www.bdcf.co.za

www.newera.org.za

Want to attend an AllProDC meeting in your area next month? We will be discussing professionalism, new DC fees and possible amendments to the Act. Let us know: bernidene@csdebtcounselling.co.za www.allprodc.org

APRIL

NEWSLETTER Regional Meetings We want to thank those members who have offered to host meetings in their regions. If you would like to attend a regional meeting in your area during May please message: bernidene@csdebtcounselling.co.za NCR Withholding Funds The NCR has given the PDAs a list of Debt Counsellors whose renewal payments are unallocated or unpaid and told the PDAs not to release their earnings in fees. Members feel that this is outside the ambit of allowed functions of the NCR in the National Credit Act and that, contractually, the PDAs have obligations the need to fulfill. The PDAs are required not to hold funds once they receive them (after a few days). Members say they understand that the PDAs have to listen to the NCR of face censure but they could be pushed into breaching their legally binding contracts with DCs and even service level agreements and possible T&C of registration with the NCR by this demand. We call on members to get involved in our discussion in this regard on the Facebook page. ABSA 30 Days 17.2 Demand ABSA are saying that if they do not get a 17.2 (indicating over indebted and starting the process) that they will not consider the person under debt review. Members have pointed out that it is a Debt Counsellor who makes a determination on behalf of the court and provides a recommendation of a finding to the court and only a court will find the consumer finally over indebted (or not). Other members have pointed out that the NCA makes allowance for a 60 day time period in which to set up the debt review and thus it would fall outside the rights of the credit provider to ignore the debt review or jump to conclusions about over indebtedness or not. We call on members to get involved in our discussion in this regard on the Facebook page.

www.allprodc.org

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

JOBS

apply for your dream job now Join the Meerkat Team An exciting place to work! Meerkat are looking for:

Frontline Sales Agents to join our energetic team.

This is a great opportunity to become part of a fast-paced, high growth and professional debt counselling environment. We offer a consistent hot lead flow as well as an aggressive remuneration model. If you are looking for a company with an entrepreneurial spirit at its heart, and are keen to join a dynamic, hardworking but fun team contact us. We would love to hear from you! Mail us on info@meerkat.co.za www.meerkat.co.za/careers/

MyMeerkat (PTY) Ltd. Meerkat is an authorised financial services provider (FSP 46535)

FINWISE - Innovative Debt Management Program

No monthly program fees! Accessible on PC or Desktop

• • • • •

Excellent audit trail Workflow management Easy to navigate functions Quick data capturing DCRS and standard proposals accommodated.

‘’ I was pleasantly surprised by our experience and changeover to Finwise. The new system is intuitive and easy to understand.‘’ Debt Counsellor Eastern Cape ‘’ I’ve found the Finwise system to be very useful. I’m new in the debt counselling field, I managed to find my way around the system as it is very user-friendly. The training manuals provided are also helpful and informative.’’ Debt Counsellor Gauteng

Head Office 59 Victoria Street, George Telephone 044 873 4530 Fax 086 246 2450

www.dcpartner.co.za

DEBT COUNSELLING COMMUNITY SUPPORT

DCCS Wish To Congratulate: Elliot Swartz of Meliorleaf On completing the Two Oceans Marathon in under 6 hours DEBT COUNSELLING COMMUNITY SUPPORT

Well Done! We also want to thank all those who pledged to donate R100 each if Elliot finished the Marathon. These funds will be used to help support debt review families who are taking strain. Remember to contact admin@dccsupport.co.za to arrange payment or to offer support for our upcoming projects.

Check out our website for pictures, stories and more and as always if you would like to get involved in one of our projects (like our back to school project for Jan) then we ask that you simply email admin@dccsupport.co.za

NCR RESEARCH

Debt Review Call Centres

The NCR recently called for comment on the running of a debt review practice by means of a call centre. Various larger call centre based operations across the country submitted comments during April. Over the past decade credit providers have run call centre operations in order to offer services to their clients and interact with NCR registered Debt Counsellors. In such operations various staff members perform functions contributing to the requirements of the National Credit Act (NCA) and the industry. Credit providers, Payment Distribution Agencies (PDAs) and credit bureaus are all registered with the National Credit Regulator as companies or firms rather than as individuals. All of them operate

call centre like operations. This is not the case with Debt Counsellors who are all registered as individuals. This may simply have been an oversight in the drafting of the Act. Perhaps it was simply short sightedness in regard to how professional, commercial services are offered in the 21st Century. Indeed worldwide larger debt counselling operations are done via call centre operations. One unintended consequence of registering Debt Counsellors as individuals is that it

makes it very difficult for the NCR to take action against non registered employers of Debt Counsellors when things go wrong. The NCR in particular seem to have an issue with the marketing of debt review via call centres (like is done with cell phone contracts and insurance). Many times these independent firms have no Debt Counsellor and are in no way regulated by the NCR who have no authority over them. These firms then hand potential clients over to debt counselling firms. The NCR have recently amended their annual fee structure for Debt Counsellors to reflect that Debt Counsellors can have several branches of their business. This then indicates that they support Debt Counsellors expanding their business and having various branches in different towns or provinces. Obviously then, this Debt Counsellor would not be able to be physically present and able to talk personally to every consumer calling their branches. Tacitly then the NCR approve of having administrative staff assist one Debt Counsellor run their business. At the same time, the NCR recently encouraged magistrates to question Debt Counsellors about who pays them and if they received money

from consumers directly or personally (something that the NCR have told Debt Counsellors not to do for many years now but it seems that the NCA may require this despite the NCRs registration of various PDAs). This seems to contradict the renewal arrangement. It seems the NCR are not sure of their own stance. The question facing the NCR is where the line is in regard to what duties need to be done directly by the Debt Counsellor (or which Debt Counsellor since at many firms many NCR registered Debt Counsellors help the same consumer through the process over the years). The question also is: can a fax machine, computer, telephone, PDA or bank account be used (as per the wording of the NCA â&#x20AC;&#x201C; which may need to be amended)? It is hoped that the submissions handed in might assist the NCR in formulating amendments to the NCA, training or new strategies in ensuring consumers (and courts) get the best possible service from larger Debt Counselling firms.

LETTER FROM A READER My name is Ian Wason, and I run South Africa’s largest debt counselling operation, based in Cape Town, and sometimes referred to as a ‘call centre’. I was fortunate enough to be at the NCR workshop for debt counsellors

in Cape Town in March 2017, where I applauded the NCR’s recent stance of engagement with the debt counsellors. It was an engaging and informative day, and there was lots of discussion. At the end of the day I was asked what my

opinion was during a discussion on call centres. I thought I should continue that discussion in this industry forum. First of all let me tell you a little about myself. I come from an entrepreneurial family in the UK, and after graduating in Economics and completing my articles as a Chartered Accountant at Deloitte in London I moved to South Africa to do voluntary work for an NGO helping people start and manage small businesses. Most of our work was in and around the townships with spaza shops, phone containers and a huge variety of other businesses. I was struck by two aspects during my year of voluntary work. Firstly that the NGO I worked for and other NGOs that I came into contact were not as well run as the private businesses that I had worked for. I thought that there must be a better way to help people, that you could actually run a sustainable profitable business that helped people effectively, long before they coined the terms of social entrepreneurship and caring capitalism. Secondly, I was saddened to see the complete lack of financial literacy amongst the people I was helping. Now, I must mention that inadequate financial literacy education at schools, universities, workplaces is not a uniquely South African problem – it is a worldwide problem. However, it becomes a unique

challenge in the South African context. Why? Because in many part of the world, most people’s ’ parents at least had bank accounts and probably credit card and possible mortgages for a number of generations, therefore, as kids, the individuals receive some sort of financial literacy education through osmosis at home. In South Africa, very often this is not the case: the majority of my clients at the NGO and subsequently in my business are first generation banked. In addition, if you factor in the history of apartheid, the newly-established ability to get credit thanks to the NCA, the impact of global brands and consumerism, and the fact that South Africa has a first world financial services industry with world beating banks, credit providers and insurers, then the result if where we are today: masses of people who are in serious debt trouble The net result of all of these factors has been that South Africa is officially the most over-indebted consumer nation on earth. That is according to the World Bank. Given all of this, after my one year volunteer tenure ended, I decided to stay in South Africa and make it my home as I thought I could make a difference. I was proven right. Fast forward 13 years, and I am proud to say that DebtBusters have helped over 45,000 consumers on the road to debt freedom. Not only that,

but we also have provided free credit reports and independent, impartial financial tips and advice to well over 500,000 South Africans. If you think that each person we speak to has (on average) four dependents, then it is not far-fetched to say we have changed the lives of millions of people for the better. I should state here that we have done all this by never cold called anyone, ever. All of our clients approach us for help themselves. Not only this but we started our ‘lowincome’ debt counselling business, Consumer Debt Help four years ago where we have assisted nearly 7,000 low income clients with debt counselling, and an additional 60,000 low income consumers with free credit reports and help. As anyone in the debt counselling industry knows, operating a debt counselling business with the current fee structure is marginal at best, but it is certainly not financially viable for a debt counsellor to help individuals with low debt repayments. In the case of Consumer Debt Help, the average debt repayment is below R1,000 per month; we have spent millions of Rands in supporting this business, with no real prospects of making a profit. One of the greatest rewards for this is that aside the rewards of Corporate Social Responsibility and helping people who otherwise may not have been helped,

is that Consumer Debt Help has been awarded every single possible award in its category since 2014 at the Debt Review awards. Recently, I was in a meeting in parliament,, where the CEO of the NCR was being questioned by MPs representing their provinces as what the NCR had done to educate consumers. The NCR CEO Nomsa Motshegare talked about workshops and billboards that they had done or put up around the country. I pointed out afterwards that one of the greatest achievements of the NCR is to train thousands of debt counsellors, who in turn employ thousands of people who in turn talk to well over 100,000 people a month, 1,2m people a year. Now that is changing lives and educating South Africans on a grand scale! Back to the discussion about ‘call centres’. At DebtBusters, we have successfully put over 300 of our staff through the debt counselling exam over the years. Over 90% of our staff are graduates from universities like UWC and UCT; when they join us, they have a solid foundation and the necessary education to perform the job of debt counselling. Regardless, aside from the DC exam, we spend months training them on the softer skills, such as listening, empathy, client service, and analytical skills. Our business is a values-based organisation, where we put our clients at the heart of

everything we do. Educating our staff on our values and what our values mean for our clients is one of our most important objectives as an employer. In our environment, we conduct a proper financial assessment of each individual who submits an enquiry to us (and give him/her a free credit report), however less than 20% of the enquiries we speak to ever become our client. The specifics of each client we sign up for debt counselling (budget, affordability, payments etc.), is reviewed by at least five separate exam qualified and registered debt counsellors through the process. I can happily say that this is most efficient and effective process in the country. We have also invested millions of Rands in world class software and hardware with numerous other checks and balances included in every step of the process. I am delighted that the NCR engaged with the industry on this discussion over ‘call centres’. However, this discussion took place nearly two years after the NCR put up billboards stating that call centres are illegal and ‘“raided” debt counsellors in the Western Cape. It would have been better to do this the other way round. That being said, the witch-hunt and the opinion that all call centres are bad has to stop. Just like small debt counsellors, there are good call centres and bad call centres. Let’s talk about both. Good call centres are the only way

that the industry can grow and use economies of scale to help the 10 million South Africans who are in arrears on their accounts. In saying that, I do not mean to indicate there is no place for small and medium sized debt counsellors: on the contrary, I believe there is a place for all types of debt counselling operations in South Africa – as long as they are doing the best possible job for consumer and have their best interests at heart. Good debt Counselling call centres are also becoming an important employer in an environment where jobs are desperately needed, and an important source of skills development in the country, all the while spreading consumer financial literacy at a much faster pace. Good debt Counselling call centres also invest hugely in software and hardware, bring change to the industry that the entire industry can benefit from. All of this has been done by debt counselling call centres over the last ten years, while probably 70% of registered debt counsellors have left the industry as it is not financially viable. So what does a bad call centre look like in the future? Businesses that use un-educated, untrained staff to cold call consumers in an unsolicited way. Businesses that do not have exam qualified debt counsellors to perform the debt counselling assessment.

Businesses that do not have numerous quality checks in place by multiple debt counsellors. Businesses that do not invest in IT, do not invest in client services staff to hand hold their clients through the entire debt counselling life time, and it goes without saying that businesses that operate from Credit Providersâ&#x20AC;&#x2122; offices are completely unacceptable. Fundamentally it is businesses that do not operate at the highest level of ethics and do not have the consumersâ&#x20AC;&#x2122; best interests at heart. In order to get to this point, we need this engagement with the NCR, a plan must be put in place for all debt counselling call centres to get to, and a period of grace given to them to get there. One serious issue is that many businesses struggle to retain staff once they have put them through the DC exam and they have qualified. An easy solution to this, it legislate that in order to be a registered debt counsellor, you not only have to pass the exam but have to work under the supervision of a registered debt counsellor for a period of one to two years. In South Africa, we are together creating a world beating debt rehabilitation industry. Debt counsellors have helped hundreds of thousands of clients through debt counselling, millions of clients with free financial advice and ensured billions of Rand have been repaid to Credit Providers: this is a monumental

achievement that is far ahead of other consumer financial rehabilitation models in other countries. This fledgling industry needs to be nurtured, guided, supported, and championed by the NCR. The NCR needs to separate the good and bad debt counselling call centres, and recognise that only by supporting and working with the good debt counselling call centres will we together rid ourselves of the scourge of reckless lending and bring debt relief to the millions of South Africans who desperately need it. Nelson Mandela said that only education can free our people. Only financial education can free our people from the disease of rampant debt.

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