DEBT REVIEW TASK TEAM LAUNCHED
WHAT THAT MEANS FOR YOU
E XCE LL ENCE IS D OIN G ORD IN A R Y THING S
E XT R AO RD I N A RI LY W E L L
– John W. Gardner
CREDIT PROTECTION
CREDIT PROTECTION
Have you applied to go under debt review? Are you restructuring your monthly expenses? Would you like to insure your debt?
Why not insure all your outstanding accounts in a single ONE Credit Protection Policy?
Have you applied to go under debt review? Are you restructuring your monthly expenses? Would you like to insure your debt?
BENEFITS OFFERED:
• Death – we settle the account
Why not insure all your outstanding accounts in a single ONE Credit Protection Policy?
• Temporary Disability – we pay your installment for 12 months
• Permanent Disability – we settle the account
BENEFITS OFFERED:
• Critical Illness – we pay your installments for 3 months
• Death – we settle the account
• Retrenchment – we pay your installments for 12 months
• Temporary Disability – we pay your installment for 12 months
• Permanent Disability – we settle the account
At a rate of R2.95 per R1000 unsecured/short-term credit and R2.00 per R1000 on mortgages and you can now insure your debt for less.
• Critical Illness – we pay your installments for 3 months
• Retrenchment – we pay your installments for 12 months
The following financial obligations or debt can be covered on the ONE Credit Protection Policy:
• Credit Cards
• Overdrafts
At a rate of R2.95 per R1000 unsecured/short-term
and R2.00 per R1000 on mortgages and you can now insure your debt for less.
• Personal Loans
• Home Loans
• Retail Accounts
The following financial obligations or debt can be covered on the ONE Credit Protection Policy:
• Rental Agreement
• Credit Cards
• Maintenance Orders
• Overdrafts
• Personal Loans
For further information please speak to your Broker, Debt Counsellor or alternatively contact your regional ONE office.
• Home Loans
• Retail Accounts
• Rental Agreement
• Maintenance Orders
0861 266 562 admin.debt@one.za.com Terms and Conditions Apply
For further information please speak to your Broker, Debt Counsellor or alternatively contact your regional ONE office.
FROM THE EDITOR
Outlook can make a big difference. Two groups of people can be presented with the same set of circumstances and yet feel totally different. This is often true of those entering debt review.
Some who are in debt review complain they cannot get access to more debt. Others are actually grateful they can’t get deeper into trouble. They are tired of sinking deeper and deeper into debt. Both face the same restrictions or circumstances and yet have different outlooks.
I recently got to attend an industry event with lots of Debt Counsellors. At first, it seemed similar to many other such events but after a little while I began to notice something different. It was hard to put my finger on at first and only by lunch time had I figured out what was so different. Everyone seemed very optimistic and upbeat.
Now, that is not to say that Debt Counsellors are dour people. No, such meetings are often fun but the tone can tend towards looking at problems and being somewhat frustrated about one issue or another. With this event and the bubble of conversation going on it was clear that something had shifted. For most it was the mention of Task Team 2.0.
For those who do not know what that is, this issue of the magazine has a bit of a look back at the 2009 NCR Task Team about debt review and a new Task Team that has been launched to tackle some industry challenges. Now the Task Team has not yet accomplished anything as yet but still, the prospect of some quick wins on industry matters seemed to have lifted people’s spirits. They just seemed to have a more positive outlook.
Then a few days after the event I spoke to someone I have worked with for many years and he seemed more pessimistic than ever (I am a bit of an optimist myself in general). He is really passionate about the industry but worries a lot about the challenges he sees.
Same circumstances but different outlooks. It will be interesting to see if the new Task Team turns his frown upside down.
In this issue, we do look at some things that are a bit worrying, like Eskom’s plans. We also have some good stats about debt review, news, reviews and some less good information about what seems to be a smear campaign against debt review. You may have seen in the press that not everyone is super positive about debt review right now but we consider why that may be.
If you work in the industry, you may have noticed a few more requests for you to complete one of the Debt Review Awards peer reviews recently. The in-depth reviews are on the go and we want to thank everyone who is taking part. They only take a couple of extra minutes but really do help identify those who are going above and beyond.
If you have participated in the past or visited the Awards website then you will know some of the criteria that are used to evaluate different parties. We do not want these shrouded in mystery and want to make sure everyone knows how everyone is evaluated each year. We have organised a 3 part series in the magazine (over this and the next two issues) that discuss these in a bit more depth. Be sure to also visit the YouTube Channel and Awards website from time to time where you can catch some videos about the criteria as well.
Debt review works and has helped hundreds of thousands of people deal with their debt successfully. Debt review is currently putting over R1.5 Billion back into credit providers pockets each month. Amazing!
Credit providers have a shocking serious drop off rate of around 37.6% in their business right now. That’s people who have taken credit but end up 3 months behind on payments (the rate for those missing one payment is even higher). These millions of people need options. They need hope. They probably need debt review.
So, if you are in the process then only YOU get to decide whether you focus on the positives or negatives of debt review. We suggest focusing on the positives, naturally. It will make you happier. But love it or hate it please do make your debt repayments this month. You will find that the light at the end of the tunnel gets brighter and brighter every time you take a step closer to being debt free.
DEBT REVIEW
BASA
The Banking Association of South Africa who are known as BASA represent the various banks who operate in South Africa with a banking license. The association advocates the views of its member banks on legislation and social and economic issues. There are currently 32 members.
Market Leading Payment Distribution Agency
DC Partner is a award winning payment distribution agency to the national debt industry.
Compliance: DC Partner is a NCR accredited Payment Distribution Agency, and adhere to strict security standards to ensure compliance and safe handling of debt review funds.
Efficiency: We streamlined processes for quick distribution of funds, saving time and resources for debt counsellors with our secure payment solutions.
BANK EXECUTIVES
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.
NCR DEBT REVIEW TASK TEAM LAUN CH ED
NCR DEBT REVIEW TASK TEAM LAUNCHED
A LITTLE HISTORY FOR CONTEXT
Years ago, a special NCR task team helped get the jammed wheels of debt review turning again.
The announcement of a brand new task team has many in the industry very excited. It may result in benefits for consumers, credit providers, the NCR, NCT and Debt Counsellors.
When debt review started back in 2007, the only guidance people had was the wording of the National Credit Act and the regulations. While that may seem like plenty, it quickly became obvious that not everyone understood the words in the same way.
That’s not uncommon for new legislation. Every court across the country is full of people fighting over various matters, using the exact same set of laws, some of which have been around for decades. The question is: who has the correct understanding? This was true in the debt review space as well.
Though lots of people signed up, not all Debt Counsellors did things the same way. Not all credit providers responded in the same way, or used the same forms. The courts all had different ideas about debt review (some still do) and it was basically chaos.
As the number of consumers who signed up began to grow, many people were left with their matters unresolved. A serious problem was brewing and by 2009 everyone could see something had to be done, but what and how?
The solution was for a small NCR guided task team to:
(1) identify everyone involved in the process and what they were responsible for;
(2) identify the various problem areas; and
(3) make suggestions on how these could be worked out if everyone just played nice.
The suggestions required everyone to meet in the middle, and make some concessions, but the end result was a plan to overcome most of the issues slowing things down.
THE CURRENT LANDSCAPE
At the moment, the industry is facing many different challenges. Some are nuanced and seem small, but have a big knock on effect and others are so big no one knows what to do about it.
The Economy in General
There is a massive need for debt stressed consumers to get help. Millions of people across the country are skipping debt repayments every month.
High interest rates and high levels of indebtedness mean consumers are not going to the shops and spending money. Businesses are starting to worry if they will make ends meet each month, the money is just not moving.
Credit providers are struggling to find consumers to lend more money to, as most people cant realistically afford more debt. Young people are not getting jobs, and as a result can’t be given credit. Credit Providers need to recover their existing credit from non-paying clients and want more credit active clients. In the debt review space, there are some key issues as well.
For example, at present there are around 1.3 million people who have signed up for debt review but have not finished it. Of those, it seems only 245 000 are actively getting help from a Debt Counsellor, and paying off their debts via a PDA each month. So… how do you help the 1.1 million people to get back into regularly paying their debts?
Consumers who sign up and then quickly change their mind find they are “trapped” with a debt review flag at credit bureaus, and get cut off from their usual credit cards etc.
People “trapped” in debt review limbo for a number of years due to falling off the program, are being scammed by people offering ‘get out of debt review’ services or some sort of debt mediation scam. Many are losing thousands of rand to such scammers.
Debt review consumers stay out of the credit market for 5 years in general. Yes, they are paying off their debts but credit providers would like to see them back in the normal credit market sooner, if possible.
Consumers who enter debt review often have to wait years to pay off even a small debt. This is due to the way payments are spilt up. No quick and easy wins, just a long grind for 5 years.
People in debt review currently can’t get a cheaper car or cheaper house which they might actually be able to afford due to concerns over offering debt review clients new credit, and that being called ‘reckless’.
PDAs who supply services to consumers and Debt Counsellors alike have not had realistic fees for several years. In retrospect, past changes were overly harsh and cut their revenue to unsustainable levels for the services they offer. If this is not addressed soon, it will impact the 245 000 people trying to pay off their debt.
The list goes on and on, and once everyone has had their input, the Task Team will have its work cut out for it. What to prioritise, what to focus on, which items have simple solutions and which are more complex and may take time?
The idea currently seems to be that the Task Team will suggest the fast and easy wins, and other items may go on to be discussed in more detail over time at CIF.
NCR DEBT REVIEW TASK TEAM LAUNCHED
WHAT IS THE CIF?
Many think of the NCR’s Credit Industry Forum as a sort of task team by committee. It is a group organised by the Regulator who meet and discuss possible solutions and changes to the NCRs guidelines on industry topics.
The members come from different parts of the industry, such as Debt Counsellor and credit provider associations. These are parties actively looking to make the process faster and easier for consumers.
The CIF has tackled many issues over the years, and the NCR has put out several guidelines based on those discussions (where there was some sort of consensus).
While not legally binding, these guidelines are often adopted by the majority of industry parties, and this can help overcome common problems (just like the Task Team is designed to do).
There has been discussions about an annual Task Team to look for quick solutions with other matters being handled by CIF.
NCR DEBT REVIEW TASK TEAM LAUNCHED
HOW WILL IT WORK AND WHEN?
We are still waiting to hear more details, but the proposal for the Task Team was well received at the last big CIF meeting, and given the go ahead.
In the past, the Task Team consisted of 3 or 4 very experienced industry experts (so not a big committee) who were able to talk to others in their field, and drum up support for the initiatives suggested.
One of the possible goals of the Task Team is to be able to present some sort of report to the NCR which might then make its way to the DTI in the months ahead. With new role players at the DTI, there is hope for fresh eyes to prioritise changes to the National Credit Act or regulations in the future.
NCR DEBT REVIEW TASK TEAM LAUNCHED
HOW WILL THE TASK TEAM HELP YOU?
This may just sound like a bunch of boring meetings, but it will probably impact on everyone involved in debt review, from consumers to Debt Counsellors in one way or another.
The Task Team will hopefully be able to move faster than most of the CIF committees in the past. Rather than going months between meetings, a focused series of quick meetings and input from all across the industry might see some much needed changes come in within a year.
Credit Providers may find ways to get clients back into the normal credit market faster.
Credit providers may find Debt Counsellors more readily able to make use of the DCRS system or additional versions of it.
Debt Counsellors may find they are able to attract more clients due to improvements in the process.
Consumers with a debt review status at credit bureaus may find some relief or a way back into meaningful debt review.
PDAs may find some promise of a more sustainable business model.
Attorneys may find the courts are helped to handle matters faster or more work at the NCT.
Insurance providers may see additional support for policy substitution.
Consumers in debt review may find they are able to stay in the process throughout because of a reviewed look at the cost of living increases while in the process.
NCR DEBT REVIEW TASK TEAM LAUNCHED
3, 2, 1 LIFT-OFF
Whatever happens there is now a feeling of optimism in the industry which has been lacking.
All parties who help consumers through debt review are excited that things might once again be easier, after the Task Team has done its work.
Though it won’t be perfect, and unlikely to be the last time such measures are needed, it is likely that debt review is soon about to get a nice boost.
All parties are encouraged to submit suggestions and feedback to the NCR Task Team when it’s requested.
BANK EXECUTIVES SAYING BAD THINGS ABOUT DEBT REVIEW
SAYING BAD THINGS ABOUT DEBT REVIEW
WHAT’S GOING ON?
Lately, some people who work for big South African banks have been vocalising their dislike of debt review. Certain people at Capitec Bank and Nedbank, in particular, have been pushing rather negative stories about it in the media.
This has resulted in recent articles on MoneyWeb, and Business Day with negative headlines. When someone reads these articles, or even just the headline, they tend to have a bad impression of Debt Review and Debt Counsellors. Many of the articles mentioned above have a negative message about using debt review to pay off debts.
Why do we sometimes see comments like this from Senior Executives of the big banks, while the very same banks have entire debt review departments that are helping bring in R1.5 Billion each month through debt review? These debt review departments love debt review, but some executives from other departments run around bad mouthing debt review, it may not make sense to you.
Let’s look behind the scenes and see what might really be going on.
SAYING BAD THINGS ABOUT DEBT REVIEW
THE LOW DOWN ON THE REAL REAL...
Capitec Bank CEO, Gerrie Fourie, has been leading the charge of negative comments recently. While having to deliver less than fantastic stats about how the bank is performing, he has also been claiming that debt review is (1) shrinking the credit market and (2) hurting clients’ chances of getting credit in the future.
Why might he be saying that?
Well, many Capitec clients actually do need debt review. In the last two years, they’ve set aside an extra +- R1 billion in provisioning, because some of their customers are struggling to pay what they already owe, and are entering debt review. Their total debt review provisioning now stands at R6.3 billion, that’s a fairly large amount of money.
Capitec also notice that many people who start debt review, often do not finish the process, and because the credit bureaus keep a record of the debt review even though the consumer stops working with a Debt Counsellor and stops paying via one of the 4 NCR registered Payment Distribution Agents (PDAs), credit providers are scared to lend them more money.
They are worried they are later told they have been “reckless” in their lending, resulting in the consumer not being forced to repay that credit. So, often they tell the consumer they can’t help them. This does upsets the consumers who are forced to carry on paying off their debts (but without the benefit of a Debt Counsellors help and all the amazing benefits the banks offer via debt review). These dropout consumers are stuck living with the consequences of their bad choices, and it really stings.
But is Mr Fourie correct in saying that debt review hurts consumers’ future prospects of getting more credit?
While these consumers are listed at the bureaus, and are forced to pay off their debts, they can’t go around making more debt. But what about later down the line?
Interestingly, the National Credit Act actually requires that once a person’s debt review is completed and all their debts are paid off, the record must be removed from credit reports, so, no future problem.
The only possible way then this might hurt the consumer, is if Capitec internally keep records and then illegally discriminate against the consumer for having entered debt review in the past.
The National Credit Act also makes it illegal to discriminate against a consumer who uses a provision of the Act to deal with debt or credit. So, the only way this might be true is if the bank decides to break this law – which they obviously would never do
So, the comments made are strange and seemingly have little foundation in reality.
SAYING BAD THINGS ABOUT DEBT REVIEW
SHOOTING THEMSELVES IN THE FOOT
While loudly complaining that people are now repaying their debts to the bank in a responsible and regular way through debt review, Capitec admits that they’ve cut a lot of people off from credit, by being very cautious in lending.
Could this be real reason why they have seen a decrease in potential clients (not because of debt counselling)?
After several years of that policy, Capitec Bank have now been quite public in saying they plan to loosen these restrictions, and start to offer more credit to people with a higher risk profile in an effort to scoop up more clients before their competitors do.
It seems a bit contradictory and biased to criticize debt review as being a bad thing, while planning to lend more to riskier clients to drum up more business.
Another vocal executive has been Nozizwe Tshabuse from Nedbank Client Debt Management & Recoveries (Retail and Business Banking not the Debt Review Department) who also had some rather negative things to say about debt review.
She has been quoted saying that debt review can (1) hurt credit scores and (2) affect young people who want to buy homes in the future.
Isn’t this a bit misleading?
Yes, debt review is noted by credit bureaus while it is happening, but so is any debt or missed payment. Missed payments on debts will definitely show up on people’s credit reports. And we know that over 40% of credit users are months behind on payments or miss payments regularly. This negatively impacts on their credit scores much more so than by paying off their debts regularly each month via debt review. Admittedly the credit bureaus systems are weak and they do not report on debt review incredibly well. It could truthfully be much better.
And once again the same facts apply: once all debt is paid off through debt review, the record is cleared.
So, why the weird comments?
Could it be because they want customers to use their new 8-month old internal department which was specifically set up to try reduce their own clients’ debts?
Did You Know?
Nedbank have a page on their website titled: "How to get out of Debt Review"
Standard Bank have a page about debt review with a form that offers their debt review. (DCASA have approached them to change this wording as it implies SBSA offer debt review)
Capitec Bank has a webpage that says:
Our experience shows that 75% of people under debt review experience no long-term benefits afterwards despite paying all the debt review fees.
Under debt review: You won’t be able to get any new credit for up to 10 years afterwards
Note: These webpages are not run by the bank’s debt review departments.
SAYING BAD THINGS ABOUT DEBT REVIEW
WHAT WE KNOW DOES NOT WORK FOR CONSUMERS & BANKS
The problem for the economy and consumers is that bank-run debt recovery departments naturally focus on individual debts owed just to the bank in question, not all of a consumer’s debts.
While it makes sense that banks want to get as much of their debt repaid as possible without consumers entering debt review and having to share, what about all the other credit providers? Surely, they would also like to be repaid.
Debt review is a fair way to share the consumers’ available funds with all who are owed, without bias.
Debt review also helps consumers realistically manage and repay their debts every single month without too much strain. In the past (and even today) collections agents often demanded unrealistic repayment amounts or wanted the consumer to ignore all other credit providers and focus on their debt.
It has proved to be a short-term and short-sighted strategy.
Facts:
• Debt review doesn’t stay on credit records once the debts are settled, so does not prevent further access to credit
• Banks who discriminate because of debt review in the past would be breaking the law
• Debt review creates a fair spilt of the consumer’s available funds for all credit providers
• Debt review budgets make sure consumers can realistically repay what is promised every single month
SAYING BAD THINGS ABOUT DEBT REVIEW
A WORRYING TREND
Some executives, like Gerrie Fourie, say that people are joining the process due to the amazing benefits that you get while paying off your debts through debt review. Mr Fourie worries that the adverts people see focus only on the benefits and not the fact that people have to pay off their debts.
Well, marketing is something that the industry is talking about internally but, we need to remember that only a consumer who cannot afford the essentials for their family and at the same time cannot pay all the debts they have each month can legally qualify for debt review.
This is verified when a Magistrate has a look at the math and confirms that this is the case.
So, if that is true and the Magistrate agrees, then we need to ask: should consumers who are stuck in this tough situation be barred from using the law to force the banks to play fair because of the wording of an advert?
Their legal status is still factual. If they are actually over-indebted, then should they stay in the financial mess they are in just to keep the banks from having to set money aside to provision for their debt?
Just as a reminder, Capitec Bank makes around R60 million in profit every single day, they have not run out of money.
Also, all consumers who enter the process have to fill in forms and provide information and agree to the terms and conditions of the process (like paying off debt instead of making more).
SAYING BAD THINGS ABOUT DEBT REVIEW
DEBT REVIEW IS A SOLUTION NOT A PROBLEM
While we can feel sorry for the massive banks (who are making around R15 Billion in pure profit each month) when they say they are worried about finding more clients, we do have to balance that with the purpose of debt review.
The core idea is to get those banks their money back, and each month around R1.5 Billion is being repaid to credit providers through debt review, so it is working very well.
On the other hand, the consumers involved are experiencing massive stress relief and are happy to be able to realistically pay what is now asked.
It is win/win.
SAYING BAD THINGS ABOUT DEBT REVIEW
IT MAKES DEBT COUNSELLORS
When Debt Counsellors see negative stories in the press from some bank executives, they wish the media had rather spoken to the banks own debt review department, who know and understand the debt review process.
These very hard working members of the bank’s teams are helping recover billions of rand each year in a reasonable and manageable way, from consumers who want to pay off their debt.
These special departments are experts at helping consumers and Debt Counsellors get arrangements in place. Wouldn’t it be nice of the press spoke to them rather than those who may have alternative agendas?
GET READY FOR A SHOCK!
SAYING BAD THINGS ABOUT DEBT REVIEW
ESKOM’S PROPOSED
TARIFF HIKE
Hold on to your wallets everyone! Eskom is gearing up to ask the National Energy Regulator of South Africa (Nersa) for some whopping electricity tariff hikes.
Yes, Eskom are hoping to get a scary 36.15% and even a jaw-dropping 43.55% increase for some customers next year.
These shocking figures come from a leaked draft document detailing Eskom’s financial plans for 2026 - 2028.
SAYING BAD THINGS ABOUT DEBT REVIEW
WHAT WILL THAT COST YOU?
If the planned increases goes through (which is not really likely), you could see your monthly electricity bill skyrocket by up to R2,500, depending on how much power you use.
For the average household that uses around 900 kWh, this could mean an extra R1,600 a month.
Yes, you heard that correctly, so, you better hope your boss is looking at raises for next year, or be prepared to turn some lights off at night.
SAYING BAD THINGS ABOUT DEBT REVIEW
IT MAY NOT BE THAT MUCH
Experts are saying that people should not panic just yet, as Nersa has seldom given Eskom what they have asked for.
Remember the 2023/24 increase request of 32%? Eskom was only granted just over 18%. Of course that increase has still hit many people hard, and people across the country decided cold showers were just what they needed this year.
It is clear that Eskom needs more money to stay in business, and not go running to get a bailout every year. So, in order to get that, they are going to have to put prices up, while cutting down on corruption and wastage.
With more and more people trying to cut dependence on Eskom’s dodgy electricity supply, they are ending up with less paying clients or clients who are paying less. So unfortunately, prices must go up.
Still, while we might not be looking at the full 36.15% increase, brace yourselves for another hefty increase and one that is likely to be in the double digits again.
Marius Mostert
SAYING BAD THINGS ABOUT DEBT REVIEW
AND COUGH PLEASE
Here are some rough examples of what that might mean if Eskom did get the slightly unlikely 36.15% increase:
The proposed hikes still need to go through public comments and hearings, so there’s a very high chance for pushback. But one thing’s for sure: electricity is about to get a whole lot more expensive, better start saving those rands!
JOBURG PRE-PAID PAIN
Joburg pre-paid electricity users must prepare for an extra R230 service fee from July onwards
While everyone is talking about how Eskom is putting up prices for the electricity we use, people who are on pre-paid in JHB are about to get hit with an extra fee, just for having access.
Many users switched to pre-paid as it was known to be cheaper. Now it seems Eskom want to close that gap, and make pre-paid access less affordable than it was.
And just so you know, Eskom was planning on asking for R550/ month extra, but that was later reduced to R230. In more bad news, there is also a pending 17.9% tariff hike on the actual electricity that may shortly come into effect city-wide and again next year too.
Debt Counsellors and credit providers should take these hikes into account when looking at consumers’ budgets and calculation software like DCRS.
DEBT REVIEW
THE DCASA CONFERENCE
The Debt Counsellors Association of South Africa (DCASA) represent the interests of Debt Counsellors and their clients in the industry. The association has an annual conference in Gauteng for members during August. The conference features lots of speeches and presentations about debt review and how members can effectively help their clients get the most out of debt review.
HOW MANY PEOPLE ARE SIGNING UP FOR DEBT REVIEW?
HOW MANY PEOPLE ARE SIGNING UP...
WHAT THE STATS REVEAL
You may be wondering how many people are entering debt review each month. Debt Counsellors may be curious to find out if consumers are still eager to enter the process. The stats tell a story, let’s have a look at some of the recent figures.
While the figures do fluctuate at different times of the year, the interesting news is that overall, the figures seem to be staying fairly high compared to past years.
You can see the usual predictable end-of-year reduction in sign-ups. People prefer not to deal with their debt just before holiday season. Even the November and December numbers are not terrible.
The year starts very strong with the January figures being high. While we do not have more figures to share right now, April is traditionally a slower month (as people hate to enter debt review when they could rather go away and relax during the public holidays). Last year, the April figures were 12 989 sign ups.
Now in most industries, there is some level of “buyer’s remorse” with consumers trying to back out of their new commitments. Lots of people sign up for gym but never actually go more than 2 or 3 times.
Debt review is sadly the same with some Debt Counsellors reporting up to a 20% drop off in the first month, no matter what they try. This is one reason some are calling for a cooling off period for debt review sign ups, similar to the returns and cancellation policies of the CPA.
But how many people have ever entered debt review since 2007 and how many are in debt review right now? Let’s have a look.
TOTAL NUMBER TO EVER SIGN UP INCL.
THOSE WHO SUCCESSFULLY FINISHED
2 039 235 1 356 672
NUMBER OF CONSUMERS CURRENTLY WITH A DEBT REVIEW FLAG AT THE CREDIT BUREAUS
SAYING BAD THINGS ABOUT DEBT REVIEW
NUMBER OF PEOPLE IN DEBT REIVEW
First off, we need to acknowledge that many people who have signed up for debt review over the years, have not stuck with the process and have as a result been left stuck with a debt review status at the NCR database and various credit bureaus.
This is the case even though they are not actively working with a professional Debt Counsellor to pay off their debts.
Some are fighting the uphill battle to try settle up their debts again on their own and others are back to the old pattern of just paying whoever pesters them the most each month.
So, a better and more accurate figure to look at, is the number of consumers who are currently paying off their debts via the various PDAs. These are consumers with Debt Counsellors and who are paying each month:
That number is around 245 000
So, we have around 1.1 million who are doing… who the heck knows on their own without help but still have a debt review status! That’s the kind of stat that makes the Capitec CEO sad.
HOW MANY PEOPLE ARE SIGNING UP...
THE FIGURES DON’T LIE… MUCH
It seems that there are many consumers who are eagerly signing up for debt review each month. So, Debt Counsellors are able to find clients to help. At least, some Debt Counsellors are doing so.
So far, 2024 has been a year with high stats showing how stressed consumers are with high food inflation and high interest rates.
Even if 20% of those signing up each month never follow through, we still have an impressive number of people who start to repay their debts in a more manageable way each month.
Combined these debt review clients (paying via the PDAs) are putting around R1.5 billion back into the credit providers pockets each month.
There is, of course, some natural churn in the figures, as some people finish up debt review and some people drop out of the process while others are signing up at the same time, but there does seem to be a slow increase in numbers over time.
There certainly is a reported increase in enquiries by people asking for advice or help. Some practices who market hard have reported a 40% jump.
The stats do also show that there is a desperate need to try help those consumers who once started the process to get back into the process properly, and start to settle up their debts seriously.
It is hoped that the new NCR Debt Review Task Team may be able to find ways for this to happen.
DEBT REVIEW
The Debt Review Awards
Every industry has an awards event.
The debt counselling industry is the same. Each year Debt Counsellors, Credit Providers, Payment Distribution agencies and more are recognised for their hard work at a modest event in October.
The event is live streamed over YouTube for those who can’t be there in person.
YOUNG SOUTH AFRICANS STRUGGLING TO GET RETAIL CREDIT
THE STRUGGLE IS REAL
Young South Africans are having a tough time getting retail credit these days.
Most young people tend to enter the credit market by opening a store account with one of the main retailers. Their parents or friends encourage them to start building a credit profile, by buying a few pieces of clothing on account and paying it off responsibly. Later on, these young consumers begin to get access to bigger credit as they enter the workforce.
Of course, things have changed over the years and particularly since the Covid Pandemic. Retailers and banks are less likely to grant young people credit. Retailers are currently giving out about 40% less credit to first time applicants compared to before.
The problem is that this portion of the market is very risky, although they access smaller amounts of credit. According to Experian, the default rate for young people with credit is currently around 16.8%, not great. Still, it is better than it was last year when it was sitting at 21.9%.
You can see the risk profile of lending to these young people is high, and most credit providers have been very strict with avoiding risk recently. They simply cannot afford to lend to those who won’t repay in the wake of the pandemic.
HOW DO YOU BRING YOUNG PEOPLE INTO THE CREDIT MARKET?
Holding back from lending to young people creates a bit of a negative loop.
If you do not lend to young people, and teaching them to be responsible credit users now, then you do not know if you can lend them bigger amounts in the future. Also, if you don’t lend to them now, they may never come back down the line. The competition for new credit users is tough.
Normally, about 80% of young people’s credit is tied to retail and clothing store accounts, showing they rely heavily on this type of credit.
And with the retailers holding back on granting these young people credit, they are either shopping elsewhere (dropping sales) or using other sources of finance, like money from the banks (who then make the profit on the credit). So, retailers are also stuck in a tough spot. Will they lend or not?
Recently some banks, like Capitec, have said that they intend to loosen the requirements and are now prepared to start taking on slightly more risky clients in an effort to grow their book. Retailers may have to follow suit as across the industry their sales have shrunk dramatically due to consumers running out of disposable income.
STRUGGLING TO GET RETAIL CREDIT...
SLOWLY DOES IT
If you are a young person (or have teenagers at home) then learning how to make smart use of credit is a crucial life skill that you sadly will not really learn at school, or until you do get access to some credit.
So, when you do get access to credit, try to use it as an opportunity to learn to manage your finances well. Don’t get carried away overinvesting in your drip and then have to go to the folks for money to pay your creditors.
Slowly does it.
The Impact of Debt Review
In the face of persistent economic challenges, debt review has become a vital lifeline for many South Africans striving to stay afloat. As we navigate an era marked by high unemployment and rising living costs, the debt review industry shines as a beacon of hope.
The current economic downturn has led to a significant increase in debt review growth in the industry as a whole, surging by a remarkable 30 percent. This rise highlights the crucial role debt review plays in helping individuals manage their financial burdens and reclaim control over their financial futures.
DEBT COUNSELLORS are the essential guides leading South Africans through financial crises, helping them find stability and peace of mind. However, in these challenging times, having the right support can make all the difference.
iPDA is here to be that support. As a payment distribution agency, we collect, distribute, and report on payments for consumers under debt review. Additionally, our innovative systems help debt counsellors manage administrative tasks and automate functions, freeing up valuable time to focus on customer care.
Our mission is to enhance client satisfaction and streamline business operations, ensuring consumers remain engaged and informed throughout the debt review process.
Partner with iPDA to elevate your service delivery and grow your business. Improve your debt review business with iPDA as your dedicated co-driver. Contact iPDA today www.ipda.co.za
The annual Debt Review Awards gala will be live streamed from the in person venue in Cape Town on Friday the 18th of October 2024.
The results of the annual Debt Review Awards are based on an industry peer review, where those who are registered with the National Credit Regulator are invited to rate the performance of their peers on the opposite side of the industry. So, a Debt Counsellor will review the performance of a credit provider and vice versa.
But what are the criterion?
Over the next 3 issues we will look at the start, middle and end of the process and some of the criterion that are considered.
The Start of the Process
Credit providers and Debt Counsellors are evaluated on slightly different criterion due to the different functions they perform. Here are some of the criterion that are considered in the indepth reviews that begin in the 3rd section of the annual reviews.
Credit Provider Criterion
• Providing CoBs timeously (with all required information)
• Sticking to required industry turnaround times
• Cancellation of Debit Orders
• Stopping Collections Harassment
• Professionalism of correspondence
• Staff knowledge of the process
• Incidence of frivolous counter proposals (including of DCRS proposals)
Debt Counsellor Criterion
• Clients who start the process (17.2 received) actually making payments by month 3
• Sticking to required industry turnaround times
• Professionalism of correspondence
• Staff knowledge of the process
• Proposal quality (optional use of DCRS proposals is also included as a criterion for some who make use of the software, this is not factored in for those who do not use it)
• Balancing Client Rights with Credit Provider Rights
Note: The wording or phrasing on the questions that cover these criteria may shift or change slightly to help balance the results, but the core criterion are the same.
These are some of the criteria that cover the start of the process. Next issue we will delve into some of the criterion that cover the middle of the process. Since debt review can take up to 5 years, this covers the largest section of the process.
We hope that you will be able to join us during the YouTube live stream of the event on the 18th of October 2024.
Head over to the YouTube channel so long to subscribe and watch other interesting videos about debt review:
https://www.youtube.com/@debtfreemagazine
BREAKING NEWS
NCR ISSUES NEW GUIDELINE ABOUT INSURANCE
People who enter debt review often decide to swap the insurance built into their credit to a new lower cost supplier. These specialist insurance providers provide special cover for those in debt review in case they lose their jobs, become unable to work or even cover the entire debt if they die.
Credit providers often make decent profit on insurance on credit since few people claim. Lower repayments for this type of insurance can free up funds to rather be spent on food or on debts.
Some credit providers have been very difficult when it comes to swapping insurance because they do not want to lose the revenue stream (and knowing that debt review clients are so good at paying every month).
Some credit providers say that insurance can only be swapped when the credit is first taken out. The new guideline referring to the Credit Life Regulations of 2017 says:
4.2. Where a consumer exercises the right in terms of Section 106(4)(a) to substitute a credit life insurance policy of the consumer’s choice at any time after the credit agreement is entered into, the credit provider must accept such substitution, provided that the new policy provides at least the benefits referred to in Regulation 3.
So, the NCR would like all credit providers insurance departments to stop playing games and swap the insurance at any time when the consumer asks (for example, if they enter debt review and then decide to change insurance providers).
Credit Life Insurance
Financial Gains, Client Savings: Collaborate for Success
What We Do
We specialize in providing Credit Life Insurance, Income Protection, and Funeral Cover services to debt counsellors, empowering them and their clients to have more. By referring their clients to us, we not only offer the highest referral fee in the industry, but also provide annuity streams to support their financial growth.
Why Partner With Us?
•Additional Revenue Streams
•Annuity Income
•Retention of Clients
•We take care of Administration
•Compliance Guaranteed
For Debt Counsellors
•A lucrative recurring monthly revenue stream
•Better chance of clients qualifying for debt review
•Little time and no effort – we do the work for you
•User friendly and efficient system
•Enhanced Service Offering
•No Medicals Required
•Continuous Training Provided
•DC Front-End System Integration
For Debt Counselling Clients
•Pay a lower premium for the same benefits – can save your clients thousands of Rands
•Convenience – a single policy covers all your clients’ credit agreements
•Claiming process easy and effortless and facilitated by DCCP
•New loans can be included under this policy
DCASA ANNOUNCE CONFERENCE DATE
The annual Debt Counsellors of South Africa Conference will be held on Friday the 23rd of August 2024.
The Conference will once again be held at the popular Birchwood venue which has been used previously. The venue is spacious with plenty of parking and a catering area. Sponsors will be on hand to interact with guests who can look forward to various speeches and presentations.
STEP-BY-STEP DREX GUIDE
DREX simplifies the exchange of data and makes managing the debt review process less admin intensive.
The below links take you to step-by-step guides on how to use the DC Portal on DREX.
How to Register on the DC Portal
Introduction to the DC Portal
Accessing a Consumer's Profile
Debt review is not easy but it is also not impossible. Hundreds of thousands of people have used the process to get out of debt and you can to.
If you would like to hear from some of the people who have successfully completed the process then you can check out this podcast which is all about debt review success:
www.debtreviewwithdummies.co.za
There are interviews with all sorts of people like:
• A Hard Working Single Mom
• A High Profile Businessman
• A Radio DJ
• Someone who fell for the “get out of debt review scams”
• Someone who took a really long time in debt review
• Someone who started a new job and things didn’t work out
Their success stories show that anyone can complete debt review if they just stick with the process and work closely with their Debt Counsellor. Why not give the podcast a listen and see how they did it?
www.allprodc.org facebook.com/groups/allprodc
Finwise is an all-inclusive Software System, designed for debt counsellors for professional and efficient Debt Management.
Finwise is a cloud-based system, and can be used on any mobile device, PC, or tablet with internet connectivity. The exceptional workflow and innovative task manager tools saves the user valuable time, through multiple consumer data reporting and easy management. Several integrations such as Legasys, iDOCS, Drex, facilitate effortless administering, and handling of multiple transactions and tasks within one system.
More Industry News Than Ever...
If you work in the debt review industry you may be hungry for news about finances, the local debt review industry and the DTI, NCR, CIF and NCT.
Why not sign up for the Debtfree Industry Newsletter?
One email a month with the latest financial local and international news about all the things that may impact on how you do debt review.
We’re
If you have excellent communication skills, empathy, and a desire to make a real impact, apply now! If you’ve always been that person who gets it done, we want to talk to you.
Location: N1 City, Goodwood, Cape Town
WE ARE HIRING
Are you passionate about helping people?
Are you ambitious and money driven?
Do you want to be part of a growing organization?
Training is provided together with a basic salary.
This role includes:
- Cold calling (leads provided)
- Achieving weekly and monthly targets
- Working under pressure
- Basic Salary: R4500 - R5,500.00
- Commission Earning Potential of R10 000/month
Requirements:
- Matric grade 12
- 25 years old or older
- 1 years’ sales experience in a call centre
- Experience in banking/financial/insurance
- Independent agent working directly under management
- Must have experience in Microsoft Outlook and Excel
- Debt Review experience will be advantageous
- Good customer care skills
- Good communication skills
- Speaking more than two SOUTH AFRICAN languages
- Target driven
Please forward your CV to cvs@ezdebt.co.za
DEBT COUNSELLORS
NORTH WEST
NORTHERN CAPE
WESTERN CAPE
GAUTENG
LIMPOPO
FREE STATE
KWAZULU-NATAL
EASTERN CAPE
MPUMALANGA
www.debtbusters.co.za
info@debtbusters.co.za
NCRDC533
14th Floor, The Pinnacle
Cnr Strand & Burg St Cape Town
Tel: 086 111 6197
Fax: 021 425 6292
info@creditmatters.co.za
www.debtbusters.co.za
www.zerodebt.co.za
www.debtbusters.co.za
info@debtbusters.co.za
www.zerodebt.co.za
www.debt-therapy.co.za
www.debtbusters.co.za
info@debtbusters.co.za
One consolidated payment. Savings on interest rates. More cashflow. Let’s get it sorted! Debt doesn’t have to weigh you down. NCRDC2484 Credit Matters
South Africa’s Leading Debt Counsellors NCRDC533
14th Floor, The Pinnacle Cnr Strand & Burg St Cape Town Tel: 086 111 6197
Fax: 021 425 6292
info@creditmatters.co.za
Tel: 087 701 9665
Email: help@zerodebt.co.za
www.zerodebt.co.za
www.debtbusters.co.za
info@debtbusters.co.za
www.zerodebt.co.za
www.debtbusters.co.za
info@debtbusters.co.za
www.zerodebt.co.za
www.debtbusters.co.za
info@debtbusters.co.za
South Africa’s Leading Debt Counsellors NCRDC533
14th Floor, The Pinnacle Cnr Strand & Burg St Cape Town Tel: 086 111 6197 Fax: 021 425 6292 info@creditmatters.co.za
www.zerodebt.co.za Credit Matters
Tel: 087 701 9665 Email: help@zerodebt.co.za
www.debt-therapy.co.za
WESTERN CAPE
0872382280 enquiries@payplansolutions.co.za www.payplansolutions.co.za
LEGAL
Liddles & Associates
“If you do what you’ve always done, you’ll get what you’ve always gotten.” - Tony Robbins
(T) +27 87 138 3275 (E) quintin@liddlesinc.com
www.liddlesinc.com
Steyn Coetzee Attorneys / Prokureurs
Adri de Bruyn 11 Market Street / Markstraat 11, Paarl, 7646
Tel: 021 872 1968
Fax: 021 872 2678 adri@steyncoetzee.co.za
RM Brown and Associates 16th Floor, The Pinnacle Cnr Strand & Burg St Cape Town
Tel: 021 202 1111, f: 021 425 0875
Email: roger@rmbrown.co.za
Jus�n �an Der Linde
1st Floor Icon House 24 Hans Strijdom Street Cape Town 8001
jus�n��dla�orneys.co.za
Assisting small to large debt counselling businesses with their legal applications on a National Scale.
We pride ourselves on personal attention and service excellence.
Levesh Govender Tel: 071 364 1475 eMail: levesh@lglaw.co.za
Effective Intelligence sardagh@e-intelligence.com
Fides Cloud Technologies craig@fidescloud.co.za
Finch Technologies chris@finchinvestments.co.za
I-Bureau Services abrie@ibureau.services
IDR South Africa shane@v-report.co.za
iFacts sonya@ifacts.co.za
Inoxico support@inoxico.com
Kudough Credit Solutions chrisjvr@kudough.co.za
Lexisnexis Risk Management kim.bastick@lexisnexis.co.za
Lightstone chrisb@lightstone.co.za
Loyal1 tshepiso@loyal1.co.za
Managed Integrity Evaluation
marelizeu@mie.co.za
Maris IT Development marius@marisit.co.za
National Validation Services info@nvs-sa.co.za
Octagon Business Solutions gregb@octogon.co.za
Omnisol Information Technology info@verifyid.co.za
Payprop Capital johette.smuts@payprop.co.za
PBSA seanb@PBSA.CO.ZA
Right Cover Online cto@rightcover.co.za
Searchworks 360 skumandan@searchworks360. co.za
Smart Information Bureau info@smartbureau.net
ThisisMe juan@thisisme.com
TPN Group michelle@tpn.co.za
Trans Africa Credit Bureau
clintonc@transafricacb.co.za
Transaction Capital Credit Health
DavidD1@tcriskservices.co.za
VeriCred Credit Bureau sumein@vccb.co.za
WeconnectU
johann@weconnectu.co.za
Zoia Consulting sipho@dots.africa
C O N T A C T D E T A I L S DEBT REVIEW NIMBLE GROUP
Dear Debt Counsellors,
This letter serves to communicate to the Credit industry to use the following contact details for the Nimble Group when processing Debt Review related applications, enquiries, queries and, complaints escalation process.
Kindly take note Nimble Group hereby consents to service all legal documents applicable to Debt review herein by way of email.
Email & Task Type
Forms 17 1 and 17 7
Forms 17 2, Proposal Summaries, Cascade plans & Court orders
Forms 17.2 Rejection, 17.W & Form 19
Forms 17 3, General queries, settlements, balance, refunds, statements, Paid up letter request & reckless lending allegations, payment allocation queries & Complaints
Contact Details
drcob@nimblegroup co za
drproposal@nimblegroup co za
drtermintation@nimblegroup.co.za
drqueries@nimblegroup co za
DEBT REVIEW INBOUND CONTACT NUMBERS:
+27 87 250 5533
+27 21 8300 711
DEBT REVIEW ENQUIRIES ESCALATION MANAGEMENT ORDER CONTACT DETAILS
Kindly note that escalations must only be done once you have sent your request to the above-mentioned contact email addresses and if your requests are out of SLA in lieu Debt Review forms response business days stipulated in the NCR Act
Kind Regards,
Denvor Rank
Operations Manager: Process Recoveries
1st line escalation
Aletta Tokollo Molelekeng
Debt Review: Team Manager
D: +27 11 285 7247
E: AlettaM@normanbissett co za
2nd line escalation
Denvor Rank
Operations Manager: Process Recoveries
O: +27 21 830 0750 (Ext 6062)
E: denvorr@nimblegroup co za
3rd Line escalation
Zivia Koff
Specialised Process Manager
D: +27 21 492 4554
E: ziviak@nimblegroup co za
We trust this communication finds you well and that it will improve our service to you
It is of utmost importance that debt review documentation is sent to the correct email address to ensure timeous feedback and action.
CAPITEC BANK CONTACT DETAILS
Further to the above, please ensure that only the channel email address applicable to the documents being submitted is used. Sending emails to multiple email addresses will result in a delay or even no feedback or action.
CAPITEC BANK ESCALATION CHANNELS
1 Jolene Pieters Team Leader: Debt Review (Court Orders/Forms/Inclusions) JolenePieters@capitecbank.co.za 2 Cindy Mauritz Manager: Debt Review CindyMauritz@capitecbank.co.za
3 Carolina Visser Manager: Process Recoveries CarolinaVisser@capitecbank.co.za Proposals
1 Meghan Bruiners Team Leader: (Proposals) MeghanBruiners@capitecbank.co.za
2 Cindy Mauritz Manager: Debt Review CindyMauritz@capitecbank.co.za
3 Carolina Visser Manager: Process Recoveries CarolinaVisser@capitecbank.co.za General Enquiries, Refund/cancellation requests , Termination queries, Updated COB’s, Payment queries
1 Nathan Slaverse Team Leader: Enquires Nathanslaverse@capitecbank.co.za 2 Carolina Visser Manager: Process Recoveries CarolinaVisser@capitecbank.co.za
1 Mfundo Xaba Officer: Market Conduct Oversight MfundoXaba@capitecbank.co.za
2 Dries Olivier Manager: Market Conduct and Oversight DriesOlivier@capitecbank.co.za
Reckless Lending Queries
1 Whitney Jardine Team Leader: Recoveries Risk Support WhitneyJardine@capitecbank.co.za
2 Zayaan Jurgens Manager: Recoveries Risk Support ZayaanJurgens@capitecbank.co.za
Credit insurance claims
1 Grant Griffith Jessica Rademeyer Kanyisa Mbiza Team Leader: Insurance Claims GrantGriffiths@capitecbank.co.za JessicaRademeyer@capitecbank.co.za KanyisaMbiza@capitecbank.co.za
2 Brigitte October Performance ManagerInsurance Claims BrigitteOctober@capitecbank.co.za
Telephonic queries lodged
1 Laetitia Pretorius Team Leader: CCS Queries LaetitiaPretorius@capitecbank.co.za
2 Tracey Govender Manager: Recoveries Administration TraceyGovender@capitecbank.co.za
Sincerely,
17.1, 17.2, Proposals, General correspondence: debtcounselling@africanbank.co.za
To register for Legal Web Access: lwac@africanbank.co.za
Reckless Lending investigations: RLA@africanbank.co.za
DETAILS COMING SOON For more
ESCALATION PROCESS
DC QUERY PROCESS
NEDBANK DRRS
Debt Counselling Query Resolution Contact Points and Escalation Process
Email submissions (Level1)
Email: DebtCounsellingQueries@nedbank.co.za
To be used as a first point of contact for all written communication
Call centre (Level 1: Alternative) Tel: 0860 109 279
To be used as a first point of contact for all telephonic communication
Attended to by Queries Specialist (Level 2: First Escalation) dcescalation1@nedbank.co.za
To be used only where no resolution is found from first point of contact after 5 business days
Attended to by Team Leader and Queries Specialist (Level 3: Second Escalation) dcescalation2@nedbank.co.za
To be used only where no resolution is found from the first escalation after 5 Business days
Attended to by Support and Escalation Manager (Level 4: Final escalation) nbdcescalations@nedbank.co.za
To be used only where no resolution is found from the second escalation after 5 Business days
proposals@consumerfriend.co.za