Debtfree Magazine June 2019 by Debtfree Magazine

SOUTH AFRICAâ&#x20AC;&#x2122;S DEBT COUNSELLING MAGAZINE

DEBT REVIEW

AWARDS A LOOK BEHIND THE SCENES June 2019 www.debtfreedigi.co.za

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The other morning I walked out my front door only to see that my door mat was missing. No, it wasn’t stolen. Seriously, if people are stealing your door mat, it might be time to consider moving. The door mat had no doubt flown away in a big storm the night before. Of course, I had to spend about 15 minutes scouring the neighborhood, looking behind rocks, trees and under cars on my hands and knees before I could accept the reality that it really was gone. You see I had this overwhelming urge to know for sure, and so I went searching, hoping in vain, as it turns out, to find it, but I wanted to be certain. These days’ consumers and clients want to know. We are tired of not knowing what’s going on with our stuff, because it is irritating and sometimes even unfair. Especially if we complain, we want to know that something is being done about it. If

we are waiting for something to be delivered (like a new door mat you buy online or something) we want to know where it is right now, and how long it will take to get to us, we want and deserve to know. With the industry’s Annual Debt Review Awards coming up in July this year, we wanted to know how it works and what goes on behind the scenes. So, in this issue we delve into all of that. We also look at how companies can improve their customer service so that their clients know what’s going on. We also catch up on all the news and goings-on from the State of the Nation to the ongoing debates around the SA Reserve Bank. We basically help you know what’s going on, and where on earth your doormat has disappeared to. In my more imaginative moments, I like to think of our door mat making its way over the oceans like Aladdins magic carpet, off to a new carefree life of adventure and excitement. Reality may differ, of course, come to think of it... our neighbor down the way’s new door mat looks

suspiciously similar to our missing one. Anyway, storms and possible theft aside, we hope you enjoy this issue and that this month brings you another step closer to being debt free.

FROM THE

E D I T O R

LIVE LIKE AN AMERICAN MILLIONAIRE

STATE OF THE NATION 2019

WHATâ&#x20AC;&#x2122;S THE DEAL WITH THE RESERVE BANK

DEBT REVIEW AWARDS BEHIND THE SCENES

SERVICE DIRECTORY

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

LIVE LIKE AN

AMERICAN

MILLIONAIRE

LIVE LIKE AN AMERICAN MILLIONAIRE We all have an idea in our mind of how an American Millionaire lives. A big house, fancy car or cars, wild parties and lots of rich and famous friends. Right? Apparently not. A new study of American Millionaires has revealed some pretty amazing stats about their spending habits. The National Study of Millionaires interviewed 10 000 US millionaires and found out some pretty interesting facts about what they spend compared to the average American consumer.

LIVE LIKE AN AMERICAN MILLIONAIRE

GROCERIES Most US millionaires donâ&#x20AC;&#x2122;t have a live-in chef or anything like that, they head down to the grocery store just like everyone else. Many of them even take coupons to get discounts when they shop. The majority of US millionaires spend 30% less on groceries than poorer families. The stats go on to show that multi-millionaires who have 2, 3 or even 5 million Dollars, still spend less on groceries on average than most Americans.

LIVE LIKE AN AMERICAN MILLIONAIRE

EATING OUT Well if they arenâ&#x20AC;&#x2122;t shopping for food, it is probably because they are always eating out at fancy restaurants right? Nope, once again the study shows that they spend (on average) $13 less than other Americans. It seems that our stereotypical view of what it means to be a millionaire, may need to change. Millionaires do not spend lavishly on every sort of outrageous thing that comes their way. They do not blow all their money on fun and games. Most are actually very budget conscious and donâ&#x20AC;&#x2122;t spend unnecessarily. In fact, most US millionaires are living and spending a lot smarter than their non-Millionaire neighbours.

LIVE LIKE AN AMERICAN MILLIONAIRE

WHAT DO WE LEARN FROM THIS? Live like a Millionaire. Spend less on eating out. Make use of coupons and shop for bargains and discounts as much as possible. Save wherever you can, and over time you will also begin to see the difference it makes. A common trend among the Millionaires in the study, is that they take a long range view of matters. Most millionaires do not inherit their money. Most come from middle-income families and many create their wealth over time. If you have debt now, it does not mean that you will always have debt. It doesn’t mean that you can never be a millionaire yourself or that you can never live the ‘millionaire lifestyle’. With some self-control, good spending habits and future efforts to grow your financial worth, maybe you too will be a one day.

WHATâ&#x20AC;&#x2122;S THE DEAL WITH THE RESERVE BANK? You may be wondering why all the fuss about the SA Reserve Bank? It seems every politician suddenly had something to say on the subject and it has been featured a lot in the media recently. You may also wonder who owns shares in the SARB and whether it matters to you?

WHAT’S THE DEAL WITH THE RESERVE BANK?

WHAT DOES THE SARB DO? The South African Reserve Bank says of itself that its primary function is to “protect the value of South Africa’s currency”. Their website also says they take responsibility for: • Ensuring that the South African money, banking and financial system as a whole is sound, meets the requirements of the community and keeps abreast of international developments; • Assisting the South African government, as well as other members of the economic community of southern Africa, with data relevant to the formulation and implementation of macro-economic policy; • and Informing the South African community and all stakeholders abroad about monetary policy and the South African economic situation. You will note, however, that nowhere above does it say they need to create jobs.

WHAT’S THE DEAL WITH THE RESERVE BANK?

WORTH MILLIONS? There are 2 million SARB shares. At present, shareholder dividends are limited to a pay-out of ten cents per year. The person with the largest amount of shares (20 000 shares) receives only R2000 per year in dividends. So, there goes the idea of making millions by owning these shares. Many owners actually don’t even realize they have shares.

WHATâ&#x20AC;&#x2122;S THE DEAL WITH THE RESERVE BANK?

WHO ARE THE SHAREHOLDERS? There are a small number of countries where the Reserve Bank shareholders are not all locals. SA is currently one of that small number of approximately 6 countries. So, who actually owns shares in the SARB and why does it matter? According to research by M&G the SARB has around 783 shareholders spread across the world. 58 (around 8%) are foreigners from Germany, Norway, the UK and Australia. Interestingly, if shareholders donâ&#x20AC;&#x2122;t live in the country, they are not allowed to vote at shareholder meetings. Others who own shares are plastic manufacturing companies, agricultural groups, a police widows and orphans organization, some professors, doctors and even some banks.

WHAT’S THE DEAL WITH THE RESERVE BANK?

WHO SETS POLICY? It is important to realize (as many politicians and others don’t seem to realize) that shareholders do not get to make any policy decisions at all. They do however get to attend an annual meeting, hear reports and also elect non-executive directors, that’s it. Before the changes to the constitution, which happened after ’94 it was possible for the shareholders to have some influence on monetary policy. Maybe much of the confusion about why locals should own all the shares stem back to thinking that this is still the case. The President and others have repeatedly tried to remind people that the SARB’s role is constitutionally dictated to protect the Rand, and that shareholders cannot influence this at all. Some political parties want to change things so that the Minister of Finance and not the shareholders chose the non-executive members of the SARB board. While this seems like a big change, it is actually meaningless, since these non-executive members have no say in monetary policy.

WHAT’S THE DEAL WITH THE RESERVE BANK?

MUCH ADO ABOUT NOTHING So, as usual, there is a lot of noise about this topic with the big changes being proposed making almost no change at all to how the SARB will run, and how it will prioritize safeguarding the power of the Rand. It may be more about which group of politicians gets their way. It turns out that who appoints the non-executive board members hardly matters since they don’t dictate policy. Shareholders also don’t dictate policy so; who owns them is symbolic at most. Making such changes would not mean that someone could suddenly change the SARBs job description from protecting the rand to something as amorphous and undefined as creating jobs. Sure it sounds like a really noble goal, after all 27% of the population has no work and even talking about such changes has seen the Rand dip vs foreign currency and sent the Presidency into a scramble to appease international investors. Which is, ironically, kind of the opposite what the SARB is meant to do. It seems that only the mammoth task of actually changing the constitution would have any effect on the SARB’s job description.

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DEBT REVIEW SCHOOL If you want to check if a credit provider or Debt Counsellor is really registered with the National Credit Regulator you can visit the NCR website: www.ncr.org.za

DEBT REVIEW

AWARDS A LOOK BEHIND THE SCENES

THE ANNUAL DEBT REVIEW AWARDS BEHIND THE SCENES Each year an industry wide peer review reveals who credit providers and Debt Counsellors think are doing their best to offer great service to their counterparts. The peer review results are announced at a modest black tie event called the Debt Review Awards. This year the Awards are being held in Durban, KZN on the 20th of July. We take a look behind the scenes at who is included and how the process works.

THE ANNUAL DEBT REVIEW AWARDS - BEHIND THE SCENES

WHO GETS CONSIDERED? Companies and individuals need to be officially registered with the National Credit Regulator (NCR) to be in the running. The NCR has a public online database of all registrants which can be accessed at www.ncr.org.za The Debt Review Awards also have a dedicated website where companies and individuals can sign up to be considered at: www.debtreviewawards.co.za The organizers may check with the four NCR registered PDAs if the companies and individuals who sign up are legitimate and use their services, or fall into the size or type category they indicate when signing up. The sign-up T&Cs specifically mention this.

THE ANNUAL DEBT REVIEW AWARDS - BEHIND THE SCENES

CONSIDERED EVEN THOUGH NOT SIGNED UP? You may wonder, what if the company or individual doesn’t sign up – can they or will they still be considered? Yes, they may be considered and their industry counter-parts may review their activity, but if they have not signed up they may not be eligible to be one of the top candidates, even if they were to receive the most glowing reviews. The organizers will, in this case, encourage such companies or individuals to officially sign up.

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Did You Know? The NCR Database currently shows that there are 1652 registered Debt Counsellors in South Africa

THE ANNUAL DEBT REVIEW AWARDS - BEHIND THE SCENES

IDENTIFYING THE TOP CANDIDATES Each year when one set of Peer Reviews end, another round begins. These may initially be simple reviews such as: rate company xâ&#x20AC;&#x2122;s performance as (1) Below average (2) Average (3) Above average. Over time, those companies and individuals who are consistently being rated highly and recommended, are added to a somewhat smaller pool of possible candidates for the top spots in their categories. Eventually the possible pool of candidates in a category will drop to perhaps 50 per category. Then the hard works begins as more and more detailed Peer Reviews are completed by NCR registered Debt Counsellors and Credit Providers. In some categories, there is naturally a much smaller pool of candidates. For example, there are currently only 4 NCR registered Payment Distribution Agents. Similarly, the group of candidates among credit providers who specialize in vehicle finance is relatively small.

THE ANNUAL DEBT REVIEW AWARDS - BEHIND THE SCENES

WHAT KIND OF CRITERIA ARE CONSIDERED? The criteria for each category are listed on the www.debtreviewawards. co.za website and if they change over the years, these have been announced at the Awards events and online. Letâ&#x20AC;&#x2122;s take a look at some of the Peer Review questions considered during one round of a peer review of Debt Counsellors:

• How would you rate these DCs in terms of PDA collection Ration (percentage actually paid vs. what was promised)? • How would you rate these DCs in client retention (Number of 17.1s you get vs. proposals from these clients)? • How would you rate these DCs in terms of proposal quality? • How would you rate these DCs in terms of speed and effectiveness in attending to your queries and getting back to you (eg. Within 5 – 10 days) • How would you rate these DCs in terms of their communication skills/ that of their staff (Respectful and ease of understanding)? • How would you rate these DCs in terms of their debt counselling knowledge/that of their employees? • How would you rate these DCs in their obedience to industry timelines (17.1, 17.2, proposals)? • Do you feel that this Debt Counsellor balances your needs with the needs (and rights) of the consumer? • How would you rate these DCs in terms of their business practice? (Ethical business, Consumer education, Engagement with yourselves, innovation, Passion for the industry) • How would you rate these DCs in taking matters to court (or Tribunal)?

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THE ANNUAL DEBT REVIEW AWARDS - BEHIND THE SCENES

For some larger firms in the categories for firms with large amounts of clients, you have additional questions such as this: • Do you see this Debt Counsellor actively trying to improve the industry where they can – given their time & resources? Then there are optional questions that relate to whether a DC uses something called DCRS or not. If they do not use this system, then this is not included in any calculations relating to their rating. If they do use it, then it is calculated into the rating. This is fair because Debt Counsellors do not have to make use of this system. For example: • How would you rate these DCs in their (optional) use of DCRS rules? All these ratings also have an option for a credit provider who is unsure to simply not put in a rating and due to the way the results are percentage based, this does not prejudice the company or individual being reviewed.

THE ANNUAL DEBT REVIEW AWARDS - BEHIND THE SCENES

TOP CANDIDATES NAMED After another year and as the Annual Debt Review Awards Gala draws near, the compiled results are drawn from the system. The computers do all the hard work and produce the names of the top 50 Debt Counsellors reviewed. It also identifies which PDA received the highest ratings from, firstly their own client Debt Counsellors and then also from credit providers. Credit Providers in various categories are also identified along with the credit provider debt review department which most Debt Counsellors feel has improved the most over the 12 months.

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Did You Know? The organizers don’t 100% trust computers yet so they have real humans at BKF Audit the process as well as the results to ensure the computers haven’t gone loopy and are not trying to take over the world. They also check that no efforts have been made to try manipulate the results in some manner (the computers also automatically do this). Sorry, no cheating! www.bkfaccountants.co.za

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THE ANNUAL DEBT REVIEW AWARDS - BEHIND THE SCENES

On the night of the Awards the top rated individuals or companies are identified. For example, the top 10, top 5 and ultimately highest rated Debt Counsellor in 5 different size categories are identified. It has to be acknowledged that the ratings reflect the source of the reviews. Debt Counsellors are reviewed by credit providers and not by the organizers, other Debt Counsellors or by consumers. The same is true of credit providers etc. So, this should always be taken into consideration when looking at the ultimate results. It is also good to know that these are the view of the majority of participants. The almost 60 firms or individuals identified each year should be very proud that their hard work is being noticed. These companies can make use of the supplied media for up to 3 years after the event on their websites and adverts. In many ways, these firms are leading the way in the industry and working very hard to improve the debt review experience for consumers.

THE AWARDS ARE COMING WWW.DEBTREVIEWAWARDS.CO.ZA

We congratulate all the past top rated firms and wish all participants the best for this year. Debtfree Magazine will cover the results in our next issue and bring you all the action live online and via our social media on the 20th of July. So, stay tuned for all the Debt Review Awards 2019 action.

STATE OF THE NATION 2019

Each year the SA President gives a speech which summarises where things stand locally and what government will focus on over the next while. Over the years, it has often been the scene of political shenanigans and much public speculation. This year, President Ramaphosa presented a speech focusing on a few main points,including a vision for a new technological city. Here are some of the highlights:

Economic Growth & Job Creation Half of all young people are unemployed, and a total 27% unemployment rate makes jobs a hot topic. The President even called it a national crisis. It is hoped that there will be 155 000 jobs created in the private sector within the next 5 years. Government will also prioritize projects that are labour intensive like, building roads and clearing vegetation. The President urged people to buy locally, and was showing off his locally made suit while giving his speech.

Education & Skills It seems that kids are going to school and yet are not learning to read. Government want to ensure kids can read well by the age of 10. Health It seems that the National Health Insurance initiatives are going ahead, and it is hoped that 2 million more people with HIV can get access to suitable medication over the next year and a half.

STATE OF THE NATION 2019

Services & Wages A promise was made to recover money stolen through state capture (implied) and to pour this back into services in the various municipalities. The president said that the new national minimum wage is slowly being adopted by many companies. A study will be completed by September to reveal what the new minimum has achieved (or what problems it has caused).

Housing and Land Poor people should get land and public land will be allocated to them over the next 5 years. At the same time the president would like to see a whole new technologically advanced city built to create work and housing and help drive the economy. Hopefully this would be done at the same time as fixing all the other existing cities across the country.

Eskom Eskom is going to be rescued because... people need electricity. So, many hundreds of Billions of Rand are going to be thrown at the problem. The Reserve Bank The SARB will stay independent even if some people (or even a lot of people) would like to change that.

Data The president asked the mobile networks to please be nice and lower the cost of data so that more people, especially young people, can have opportunities through online access. State Capture The new governmental plan is to avoid corruption, and to try stop politicians from stealing public funds. Many government agencies will now be empowered further to try to end this behavior.

What if...

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PARTNERSHIPS How Meliorleaf partnerships with Debt Counsellors work. We keep you advised regarding your clients to ensure they are covered properly and remain covered. We remunerate you, ongoing, for what you choose to do: Some debt counsellors want to be actively involved in arranging and managing insurance relationships, and we fairly share commissions earned Some debt counsellors are also registered Financial Services Providers. They can advise clients and provide a full broking service, and are entitled to earn the full commission But, Meliorleaf understands that some debt counsellors cannot or do not want to be actively involved. However, they do want their clients to be properly insured: For these debt counsellors, Meliorleaf can provide a fully outsourced turnkey solution. What’s more, we will still provide you with ongoing remuneration on all active policies.

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NEWS FNB DEBT REVIEW CHANGE ADDRESS The FNB Debt Review Centre will soon be on the move to a new location in the Johannesburg city centre. The move will take place at the end of June and start of July (officially 1 July 2019). The new street address will now be 1st & 2nd Floor, 1066 Building, 35 Pritchard Street, Johannesburg.

LOAN SHARK ARRESTED A 59 year old Limpopo woman has reportedly been operating illegally as a credit provider offering loans to people in her community and holding clients SASSA cards as collateral. She was arrested by the Hawks Serious Commercial Crime Investigation unit based on information provided to them by the National Credit Regulator. People who lend money to other people and charge any fees or interest must to register with the National Credit Regulator. This is a requirement of the National Credit Act and an attempt to cut down on loan sharks preying on consumers across the country. Allegedly the loan shark was

holding bank cards, SASSA cards and ID books taken illegally from those who approached her for loans. Though she was released on bail she now faces criminal charges as well as action via the National Consumer Tribunal who could be asked to write off all the loans granted. A 59 year old Limpopo woman has reportedly been operating illegally as a credit provider offering loans to people in her community and holding clients SASSA cards as collateral. She was arrested by the Hawks Serious Commercial Crime Investigation unit based on information provided to them by the National Credit Regulator.

People who lend money to other people and charge any fees or interest must to register with the National Credit Regulator. This is a requirement of the National Credit Act and an attempt to cut down on loan sharks preying on consumers across the country. Allegedly the loan shark was holding bank cards, SASSA cards and ID books taken illegally from those who approached her for loans. Though she was released on bail she now faces criminal charges as well as action via the National Consumer Tribunal who could be asked to write off all the loans granted.

TYMEBANK CEO STEPS DOWN Amid a sweeping wave of changes at TymeBank, CEO Sandile Shabalala has decided to call it quits after 3 years. With TymeBank set to be on the way to signing up 1 million new clients by the end of the year, things are certainly going well for the digital bank. Nearly 100 000 new clients have been signing up every month as the bank has made bold moves in the industry putting increasing pressure on the established brands. Recently, there have been a number of big changes to the TymeBank board of directors. Now there will be one in regard to the CEO as well. As yet, Mr Shabalalaâ&#x20AC;&#x2122;s replacement has not been announced but he will

work out his notice period while Deputy CEO Tauriq Keraan will be there to keep an eye on things. Mr Shabalala, who helped the bank grow from nothing to the position it is today has said he will now take a break to be with family before looking to come back into the employment market and pursuing new opportunities.

SUPREME COURT RULING ON FR AUD RECORDS The National Credit Regulator (NCR) felt strongly that the Southern African Fraud Prevention Service (SAFPS) were breaking the requirements of the National Credit Act in storing information about consumers who commit fraud for longer than a year. The NCR felt that this information was simply a type of negative credit report listing and needed to disappear after some months to not negatively affect a consumerâ&#x20AC;&#x2122;s chances of gaining access to credit down the line. They have been fighting with the SAFPS for some time now and the matter has been progressively climbing through the countryâ&#x20AC;&#x2122;s legal system at great costs to all parties.

The SAFPS argued before the Supreme Court that it was necessary to keep such information for much longer to help prevent credit providers from falling prey to repeated fraud efforts by lawbreakers and criminals (who may also be credit users). Such individuals blatantly lie to credit providers even going so far as to manufacture pay slips and fake proof of employment and residential information with the intention of never repaying credit granted. The Supreme Court of Appeal considered the case and concluded that if information about a consumer who through unplanned circumstance is sequestrated is kept for 10

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years then surely information about purposeful criminal behaviour too could be kept for longer than 12 months. It concluded that such fraudulent activity is not simply a regular negative credit listing but is much more. The ruling linked back to the stated purpose of the National Credit Act which it feels would be undermined if such information was removed too swiftly. It also pointed to the need for sensible and businesslike findings in regard to NCA statute. The SCA felt that removing such listings prematurely could ultimately hurt the credit industry and would not protect consumers as the NCA intended.

While the SAFPS was extremely happy to come out victorious, since their entire existence revolves around keeping these records, they were quick to publically acknowledge the vital role of the NCR in the credit industry and are pleased to gain additional clarity on the provisions of the NCA and the spirit of the law.

NEW COINS COMING THIS YEAR Reaching into your pocket for some change may be something that you do less and less these days but SA has not yet moved to a coin free economy just yet. In some countries, people bunch notes together and wrap them in elastic bands forming bricks or money to transact with. They havenâ&#x20AC;&#x2122;t seen coins for years. Fortunately, the Rand has not fallen quite so low just yet. So, you may be interested to know that a new series of R5 and R2 coins will soon be landing up in your pocket. The 6 new coin designs look to highlight certain rights under the SA constitution.

The coin highlighting childrenâ&#x20AC;&#x2122;s rights was designed by artist Neo Mahlangu.

Maaike Bakker designed the coin representing environmental rights to try to show that people have access to natural resources including food, water and air.

The R2 coin showing the right to education was also designed by Neo and shows 3 levels of education.

Ratsy Knayles coin highlighting freedom to move around and chose where to stay as symbolised by the weaver bird with a key on the coin.

Using the concept of sign language artist Peter Mammes depicts the freedom of belief and religion in the final new R2 coin design.

The new look R5 coin celebrating 25 years of striving for freedom was created by Lady Skollie.

DEBT REVIEW SCHOOL Did You Know? If you are soon going to have to take maternity leave did you know you can ask a court to delay or postpone debt repayments (NCA Section 86 (7)(b)).

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THE TIMING OF LEGAL FEES FOR DEBT REVIEW After the 2018 amendment to the NCR guideline* about debt counselling fees, many Debt Counsellors made modifications to the names and types of fees they charge consumers. For example, many Debt Counsellors now charge an ‘Administration fee’ and ‘Determination fee’ and even a ‘Reckless Lending fee’ as set out in the new guideline. One of the biggest change was the name and wording of the fees for legal work in debt review. Since debt counselling is a legal process, where matters go to court, it is obvious that legal costs will apply. The NCR have repeatedly said they cannot dictate to attorneys what they can and cannot charge, as they do not have authority to do so. Simultaneously however, their guideline has some thoughts on the matter and implies that the Debt Counsellor somehow plays a part in this side of the process and collection of fees. This is no doubt because consumers ask Debt Counsellors what the process is going to cost them.

THE TIMING OF LEGAL FEES FOR DEBT REVIEW

A ROSE BY ANY OTHER NAME One change was that the fee which was known as the legal fee was renamed the ‘Attorney Fee’. The guideline says that the fee should be agreed with the attorney (not the Debt Counsellor). The guideline also says that these fees should be agreed upfront (maybe by the Debt Counellor?). This is tricky, of course since it is hard to know how long it will take and how much legal work will be required and a consumer would be hard pressed to make such arrangements directly with random attorneys. So, this implies the Debt Counsellor is involved here. In the past the legal fee was a broad fee which might possibly cover legal costs throughout the debt review process. Now the ‘Attorney Fee’ is linked specifically to the initial court application to have the debt restructured.

THE TIMING OF LEGAL FEES FOR DEBT REVIEW

TIMING In the past, there were some industry agreements or usual business practice, which credit providers liked a lot, which said legal fees would come out of the consumerâ&#x20AC;&#x2122;s second debt repayment during the debt counselling process. The new guideline is very different and changes all of this. The NCR guideline now says that consumers will only pay the attorney after the attorney has (1) drafted the court papers and (2) been to court (presumably for the first time?). The timing of this can change or vary greatly from company to company, attorney to attorney and indeed from court to court. This is especially true if consumers delay in timeously providing the necessary documents needed to take matters to court.

THE TIMING OF LEGAL FEES FOR DEBT REVIEW

THOUGHTS, MUSINGS AND QUESTIONS Attorneys do not want to wait until they have been to court for the application to get paid, or else they may never get paid. The NCR canâ&#x20AC;&#x2122;t tell them what to do, and they also cannot expect the Debt Counsellor to bankroll the consumerâ&#x20AC;&#x2122;s costs. The fee guideline (sort of), makes a visual distinction between an NCT application and a court application by listing them in separate sections (as it does with the application fee, the determination fee and the restructuring fee). This does not however automatically mean that it is one or the other since there are also other fees listed separately, directly above them. Some disagree and say that this does mean it is one or the other. The NCT have however stated that anyone can be represented by another party (such as an attorney) in cases before the NCT. As such, can both fees apply for such an application if an attorney is chosen to represent the consumer?

Due to the simplicity of the old system of taking legal fees in month 2 of the process, change in regard to the timing of this fee has been resisted by credit providers. It is after all very, very hard to work up and agree to the math of a payment that could (might) happen at almost any random month during the process. Most Debt Counsellors across the country have simply ignored this portion of the NCR guideline. So, if Debt Counsellors are still taking fees and sending them on to attorneys on behalf of the consumer (perhaps via the PDA) in month 2 of the process, will the NCR give them a hard time? Can they? Will the NCR amend other guidelines and industry related reports which featured the old timing of legal fees to match their new guideline with its more vague timing for attorneyâ&#x20AC;&#x2122;s fees? These changes may have been made in an effort to stop Debt Counsellors handling any money for the legal side of things and try to encourage Debt Counsellors to rush things to court. If however credit providers have torpedoed any change to the way they prefer to do things (ie. money in month 2) does this invalidate these efforts? *Please note: The NCR, like other organisations, has the right to issue guidelines about fees they feel should be charged for Debt Counselling. At present, no official obligatory fee structure has been published in the NCA or Regulations.

Die Republiek van

SKYT AFRICA Hi Almal, Junie was baie interessant op die plaaslike front. Steinhoff het, volgens hul jongste finansiĂŤlestate, n reuse verlies van R20Bn getoon. Ek het voorheen hieroor gepraat so kom ons laat dit daar. Kort op hulle hakke het Tongaat Hulett, eens die grootste suikerprodusent in die land, hul inkomste met tussen R3.5Bn en R4.5Bn oorverklaar gevolglik is die verhandeling van hul aandele op beide die JSE en in Londen opgeskort. Nou hoe de drommel gebeur dit? Daar is immers rekenkundige beamptes, interne ouditeure en direksielede wat die finansiĂŤlestate moet afteken, almal kundiges op hul onderskeie gebiede. Of is hulle? Die probleem was dat hulle inkomste wat nog nie gerealiseer het of gefinaliseer was as werklike inkomste aangetoon het. Dit is n fout wat

menigte persoon maak wanneer dit by persoonlike finansies kom – die verwagte verhoging of verwagte bonus word spandeer nog voordat dit gerealiseer het. Soos die Engelse sê, don’t count your chickens before they hatch! SONA. Gisteraand kyk ek ook die SONA met gemengde gevoelens, versigtig positief maar ook met n beklemming om my hart. Ek verstaan goed dat die SONA nie gaan oor die detail of die hoe nie maar eerder n beplanning van hoe dinge beoog word om te verloop oor die volgende dekade of wat. ESKOM. Die ligte moet aangehou word – baie positief maar die realiteit is dat indien ESKOM op sy lenings fouteer dan word die staatswaarborge opgeroep en die staat het nie die geld om die skuld te vereffen nie. Om die ligte aan te hou moet daar iewers geld gesoek word. O ja almal moet vir krag betaal – sterkte met daai een. Jaare gelede was ESKOM n funksionerende entiteit. TRANSNET. n Trein wat van Mussina tot in die Kaap ry, en op tyd. Stasies is verwoes en spoorlyne gesteel. Jaare gelede het ons n funksionerende spoordiens gehad. SAA. n Meulsteen wat geld vreet. Jaare gelede was dit ons trots. MUNISIPALITEITE. Grotendeels bankrot. Jaare gelede .... ja,ja.

VAKBONDE. Hulle gaan steeds onrealistiese vereistes stel en ekonomiese groei kortwiek. SKOLE. Solank as wat n patetiese 33% as slaag beskou word gaan die jeug nie n ekonomiese bydrae kan lewer nie. LĂŞ die blaam by jaare van onafhanklikheid of by die individue wat magsbehep geword het sonder dat hul tot verantwoording geroep is? Die Guptaâ&#x20AC;&#x2122;s het wragtig nie alles kom bedonder nie. Tydens a kaartspel is n Ace n deurslaggewende kaart, n belangrike kaart. Die Ace wat egter agter die skerms doenig is, is eerder n Joker. Kyk wat het hy met sy kaartmannetjie houding veroorsaak toe hy snert oor die Reserwe bank kwytgeraak het! Met so n Ace in die pak is die spel verlore. Daar is nog n hele paar Jokers in gesaghebbende posisies waarvan ontslae geraak moet word voordat my hartbeklemming verdwyn. En is die Sjinese n redding of nog n Joker? Pasop vir iemand wat jou die maan en sterre belowe. En gaan maar versigtig te werk met die beoogde aanwending van die pensioenfonds reserwes as n uitweg om al hierdie drome tot waarwording te bring, sit eers persone in beheer wat weet wat hulle doen en vertrou kan word. Maak seker dit is n Ace wat jy vashou en nie n Joker nie! Groete, Christo

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

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DEBT REVIEW SCHOOL Did You Know? The NCR changed their guideline about Debt Counselling fees. They now suggest legal fees be taken in the month of the court order however, most DCs stick to the old arrangement of taking legal fees in month 2.

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