South Africa’s debt counselling magazine

April 2016www.debtfreedigi.co.za

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It always seems impossible until it is done” - Nelson Mandela

“

C O N T E N T S

NEWS

CaN aN aCCouNt BE REiNStatEd

oNCE JudgEmENt iS gRaNtEd?

dEBt REViEWaWaRdS

SERViCE diRECtoRY

makE a SuCCESS of YouR

dEBt REViEW

LEttER fRom a REadER

it seems that fictional character John Snow’s warning about “winter” has come to pass. Storms in the Cape wiped out around 150 houses this month and elsewhere the weather has turned. Winter has begun to settle in. No relief yet for the drought stricken areas though, isn’t that typical. a lot of consumers probably feel exactly the same way. things just never seem to go their way. So many times it seems that things just stack against you no matter what you try. Even when consumer enter debt review (expecting no more pressure or stress about their debts) they soon face challenges which can make them feel that they have not really improved their situation. obviously this is more perception that reality, however it can move some to make poor choices right at the start of the process. in this issue we look at crucial steps consumers can take to make a success of their debt review. though debt Counsellors admittedly do the lion share of the heavy lifting in the process, it is still the consumer’s debt. if you recently began debt review, then be sure to read the article and follow the simple but important steps outlined. We also look at a new project launched by the debt Counselling Community Support Program (dCCS) which really highlights that debt review is not a short little sprint but rather a marathon in which consumers need to pace themselves.the NCR and many credit providers have been very busy. Some credit providers have been

busy taking on the NCR. Be sure to catch all the latest news in this issue. those in the industry will no doubt find the (admittedly longer and more involved than normal) letter from one of our readers very interesting. it discusses some technical issues surrounding the NCR guidelines and the process as it is currently conducted. as time goes by, and new court cases are heard, the landscape needs to be reevaluated and this letter discusses some of those potential considerations. We also look at upcoming industry and association events.there is a story of two families sitting in two similar homes during mid-winter, both with leaking roofs. the first family is gloomy and distressed at the leaks while, strangely, the second family is singing songs and are all smiling, despite the leaks. the difference between the two families? the second family will soon be moving to their newly constructed (leak free) home. the story is centered on the power of hope. if you are struggling with your debt, don’t let it wear you down and wash you out with one problem after another. Rather embrace hope and enter debt review. manage the process well and you will soon find yourself heading for a bright, dry, warm future - living debt free.

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INDUSTRY CONSUMER

NEWS FLASHNCR GUIDElINE ON CONSUMERS lEavINGThE PROCESSRecently the NCR issued a new Withdrawal guideline (explanation). the guide helps show what can be done in a variety of different situations (e.g. if all debt is paid up; if only some debt is paid up; if a court order has been issued, or if one has not etc.). You can download the guideline here:http://debtfreedigi .co.za/wp-content/uploads/2016/03/Withdrawal-from-debt-review-NCR-guidelines-feb-2015.pdf

ChaNGE YOUR FORM 16the NCR suggest that debt Counsellors adjust the wording on their form 16 to allow for the changes in the amended NCa. the new wording can be found in this document which strives to clarify the guideline: http://debtfreedigi.co.za/wp-content/uploads/2016/03/NCR-EXPLaNatoRY-to-tHE-WitHdRaWaL-guidELiNES.pdf

lEwIS GETS ThE GO ahEaDLewis Stores have received the go ahead to acquire 57 new outlets (under the “Beares” and “Ellerines” Stores brands). this will allow them to continue to shift their market focus as the economy continues to slow. Lewis recently impressed with their speedy establishment of

a call centre (with more than 50 staff) to help consumers through the application process (in addition to the work done by sales staff at the stores). the call centre also assists them in making sure consumers understand the costs and are able to afford the credit offered. despite this latest positive move Lewis are once again front and center as the NCR have referred them for a third time in recent history to the NCt for what they say are breaches in the National Credit act. Lewis disagree. the action follows after another charge by Summit financial Partners (some question their motives and connections with other credit providers). in the latest referral to the NCt the NCR have gone so far as to request up to 10% of the companies annual turnover (which would amount to over R500m) in fines. Lewis have speedily made adjustments again but many of the matters refer to old credit agreements. as yet the NCt has yet to actually hear any matters against the credit provider that have been referred to them by the NCR.

DCaSa CONFERENCE BOOkINGS NOw OPEN TO allthe debt Counsellors association of South africa (dCaSa) are holding their annual conference in JHB in august 2016. as always, debtfree will cover the event for those who can’t make it. the midweek conference is very well supported and packed with lots of

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presentations and opportunities to engage with industry representatives. after first taking bookings from members only, dCaSa have now opened the doors to all debt Counsellors and other parties. the conference takes place at Emperor’s Palace on Wednesday 17th august. dCaSa members can attend for free, while non-members pay a nominal entrance fee. if you would like more info or would like to attend please contact: admin@dcasa.co.za

NCR ISSUE POST COETzEE FEE CIRCUlaRin a recent court case (first Rand Bank & Nedbank V Coetzee) the High Court said in its ruling, that it felt that it was not right that the debt Counsellor ask for their fees before the debts are settled. the court then suggested that the debt Counsellor should be treated like one of the credit providers and be paid off month by month rather than in accordance with the NCR’s issued non-binding opinion on debt counselling fees. many felt that this ruling – which saw the debt Counsellor ordered to pay a massive amount of money for the credit provider’s legal fees shows that (in that court at least) the NCR’s fee guideline carries no actual legal weight or merit what so ever [You can read an open letter all about this case later in this issue]. the NCR’s recommended fee structure makes allowance for the debt Counsellors professional fees to be drawn during the first month of the debt review process. the NCR have now felt compelled to comment on the matter in the face of this sentiment.in their recent Circular (Circular 6 of 2016), the NCR have stated that they feel that the judge obviously did not want to cause chaos across the industry and ignore the NCRs

guidelines. this could make it possible that different courts might start to make rulings on how debt Counsellors should receive their professional fees. they have said that due to the wording in the ruling - that a monthly fee payment “may” be a better way of taking fees - that it is not obligatory for debt Counselors in that area to change their fee structure and can thus basically be ignored (as per their recommendation). Several debt Counsellors feel strongly that this is not the case and that if a court makes an order, only a higher court can clarify or adjust what has been said. the entire case touches on a sensitive topic, the professional fees of debt Counsellors. the NCR long last reviewed these fees, during which time the entire face of debt review and time taken for a review have shifted dramatically. debt Counsellors across the industry feel the NCR’s fee guideline is extremely outdated and does not make allowance for many parts of the current debt review process or workload. the NCR have agreed and even mentioned, that they had plans for a review last year (before budgeting constraints delayed matters).it is worth taking note that there is currently no real ‘legal’ limit or structure to debt counselling fees. the NCa only mentions an amount of R50. the NCa allows dCs to give consumers a receipt for the amount but the NCR have bound many dCs to not accepting any money directly from consumers and only allowing this to be done via a Pda. though they have verbally indicated that this prohibition may not apply to this R50, that would seem to contradict the terms & conditions many debt Counsellors have signed. there is in fact only a non binding guideline which the NCR really like debt Counsellors to follow but which - as this court case shows - carries no current

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legal weight. also of note is the fact that debt Counsellors do already get a monthly payment for ongoing professional care - something which the magistrate mentioned might be the better way for consumers to pay debt Counsellors. another consideration regarding the current confusion over fees, is that though the NCt recently issued increased costs for NCt debt review matters but the NCR have not issued an updated guideline in regard to NCt fees which debt Counsellors can charge. this seems a little unfair and could be updated in the course of a single line circular. that may however open a can of worms in regard to the other fees. When the NCR and dti were recently pressured into reviewing fees and rates which credit providers can charge, credit providers were hit by a large reduction in rates in regard to unsecured credit. this has since been challenged at court [see news item in this issue] for having been poorly thought out and the industry insufficiently consulted. this is something that debt Counsellors would like to avoid. it is hoped that the dti will eventually issue well researched regulations in regard to the matter, or that the NCR update their guidelines (should the dti decide not to do so to allow for competitive service offerings). You can read the Circular about payment of dC fees as per the NCR’s guideline here:http://debtfreedigi .co.za/wp-content/uploads/2016/03/NCR-Circular-No6-2016-Payments-of-debt-Counsellor-fees.pdf

CREDIT PROvIDERwORkShOPSBoth fNB and Nedbank recently held workshops and conferences with debt Counsellors in an effort to discuss industry

specific challenges, and credit provider specific workflow processes. the Banks were not the only credit providers to hold workshops recently. Consumer friend – who handle a lot of debt review admin for many retail credit providers (like Woolies and truworths) also held an intimate but very exciting meeting in Cape town where they discussed their future plans for the brand. debtfree will be sure to keep you posted on some big developments there which will make everyone’s life much easier. at their workshop fNB focused on some of their new projects (like the 86(10) pre-termination project – which is aimed at reducing the amount of incorrect and time wasting 86(10)’s are done and their attempts to ask for or find missing documentation on some consumers matters) while Nedbank held what they label a series of ‘Candid Conversations’ with debt Counsellors in gauteng about their systems, their processes and their views on key industry issues.

CaN YOU SEE ThE DIFFERENCE? I CaN’T SEE ThE DIFFERENCE... CaN YOU SEE ThE DIFFERENCE?When african Bank shares took their dramatic tumble into the dirt, the bank was put into curatorship in an effort to salvage something out of the giant, after years of trading and building a strong brand. mr. tom Winterboer took control and soon it was announced that african Bank would be split into good Bank and…not so good bank. the “not so good bank” has now been called Residual debt Services and the “good bank” is being rebranded as african Bank. due to some very fancy legal paper shuffling, the all new african

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Bank will have none of the old bank’s bad debt but still act as it’s agent to collect on the many bad debts allocated to it. Please note that the old bad bank debt which is lumped into Residual debt Services will not be operating as a bank, though they will continue to be a registered credit provider. this entity is still under curatorship.New african Bank has an equity base of R10 Billion and a cash position of a whopping R24 Billion. this should see it able to raise additional funds to expand and continue to trade over the next couple of years. african Bank will be tying in with Sanlam to offer consumers more insurance products in an effort to push up profitability. Stricter affordability assessment regulations should also see a reduction in possible reckless lending allegations. the bank has stated they wish to move toward a more retail focused business as opposed to heavily focusing on unsecured lending as in the past. the bank will operate out of around 400 branches country wise and if consumers don’t really think about it too much it will almost be as if nothing ever happened. While consumers may feel this way, it is unclear what investors will think. the newly branded african Bank began operating this month with mr. Winterboer handing over control of good Bank to new african Bank CEo mr. Brain Riley. this in the midst of calls from parliamentary parties against the National Credit Regulator demanding some sort of accountability from former african Bank management who, they say, have gotten away with gross abuse of their positions and have not been held accountable for the factors leading to its crash.

MFSa GO TO COURTmicro finance South africa (mfSa) who represent reputable micro finance credit providers, have made an urgent application to court to have the new fee regulations (coming into effect in early may), which will see fees for unsecured credit greatly reduced, prevented from coming into effect. mfSa represent most micro financing credit providers across Sa. they say that they are concerned that the proposed changes to the fees that credit providers can charge on credit (a drop of around 7%) will see between 30% and 50% of all their members go under. they say this will then lead to more people approaching unregistered parties for loans (i.e. illegal loan sharks). in court papers submitted to the North gauteng High Court, mfSa want to prevent the fee changes coming into effect at this time until further research is done. mfSa say that the fee structure needs to be reviewed properly and additional research conducted before any change is made. they say that they cannot find evidence of any macro-economic impact assessment having been done prior to the announcement of the new fee structure. the members of Parliament Portfolio Committee on trade and industry feel that the changes are actually not extreme enough and that consumers are still being taken advantage of in many cases. at consultation phase mfSa were able to make comment on the proposed changes which the dti went ahead with. Credit providers are allowed to charge the maximum amount, but do not have to. mfSa on the other hand, warn that the changes will see many of their members go out of business. this will have further economic impact. mfSa further say that a reduction in fees is actually the opposite of what their members need, to

be able to offset increases in running costs and compliance with increased regulation. the NCR and dti will oppose the application and the matter will be heard on the 3rd of may 2016 (just before the deadline of the 6th when the changes are meant to come into effect).

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Capitec Bank rakes in four accolades for customer service in 2016

Capitec Bank was named South africa’s best service and best value bank for a fourth consecutive year in the South african Consumer Satisfaction index (Sacsi) this month, and was rated best bank in the world by the uk-based global banking advisory group, the Lafferty group, in a tally of 100 global banks last month. Capitec was also named South africa’s best priced bank in the 2015 Solidarity Report, and the best customer service bank in the ask afrika orange index awards of 2015.

“We are inspired by the recognition our clients give us and humbled by the positive support for our brand. these accolades place a huge responsibility on our shoulders to maintain the high levels of support that we give our clients in the future,” Carl fischer, Capitec Bank’s head of marketing and Corporate affairs said. “the bank would like to thank all 12 000 employees who helped us earn the public’s trust, but we know that we can never stop striving to be better – there is always more we can do,” he added.

20 april 2016: Capitec Bank’s customer base has grown by 25% over the past financial year as a result of growing brand acceptance in the South african market that is underpinned by four recent accolades for customer satisfaction.

according to the SaCsi results, Capitec Bank received a customer satisfaction score of 83.8%, which puts it 8.9% points above the industry average for services rendered in 2015. SaCsi rated customer satisfaction with quality of service, perceived value, customer loyalty, levels of complaints and rates of complaint resolution.

the global Lafferty Bank Rating in turn benchmarked the world’s top banks on a combination of financial and non-financial criteria related to the quality of the organisation and its business model, including strategy, culture, customer satisfaction, and living the brand promise.

“the recent SaCsi award and others attest to our simplified product solution, global one, our customer service model and the approach to client support that we follow,” said fischer. “our flexible product offer ensures that we provide the best solution, as defined by the client.”

on 30 march, Capitec Bank announced that it achieved the highest annual client growth in its 15 year history over the 2015/2016 financial year. the bank now has 7 million customers, 720 branches and 3 705 atm’s nationwide and is South africa’s safest, most affordable bank.

the debt review process helps consumers deal with their debt in a responsible but realistic way. it allows consumers to make an arrangement with their creditors through debt review for reduced payments over extended periods of time. Next these agreements go to court and consumers end up getting a court order restructuring their debts. While the debt Counsellors and Credit Providers do a lot of the negotiations and work it is always a good idea for a consumer to be involved. Not totally handing the reins over and ignoring their debts. there are several things that you can do to help make a success of your debt review.

MakE a SUCCESS OF YOUR DEBT REvIEw

GET ThE DETaIlSthe very first step in making a success of your debt review is to know who you are dealing with. this means that you should first do research on any firm you are planning to approach about debt review. No firm will be 100% perfect and problem free but be sure to ask around or check online about the company. You want to be sure you are dealing with a NCR registered counsellor and not some fly by night mediation firm.

You should also know where the company is based, how to contact them and most importantly who the actual debt Counsellor is who will be handling your mater. it is important to note that much like walking into a bank, you may not get to speak to the manager (or in this case debt Counsellor) immediately. the smaller the debt review practice the more likely you are to deal directly with the debt Counsellor soon. in larger firms this can take some time. Some consumers never even meet or speak to their debt Counsellor. Why not ask to chat with them or go into the office to get to see them face to face?

Regardless of what size firm you pick be sure to find out who the debt Counsellor is and how

to get hold of them. When signing up with a debt Counselling firm they will supply you with various forms. keep copies. these will have the contact info of the firm and debt Counsellors name and NCR register number on it.

Never be shy to ask a debt Counsellor or debt Counselling firm to see the NCR certificate for the debt Counsellor. this will give you added confidence in the firm and process. STEP ONE: kNOw whO YOU aRE DEalING wITh

Speak to My lawyer!debt review is a legal process. a formal proposal is made by the debt Counsellor to the courts. the court then looks over the papers and listens to any credit providers who may not be happy with the proposal (this can happen if they feel one of the other creditors is getting all the money or that you have more money that you could pay. in reality creditors normally only oppose out of greed in wanting to settle the debt sooner or to maybe take away an asset to sell).

Not many debt Counsellors are also attorneys. this means that in most cases a debt Counsellor will hire an attorney to handle the matter at court (this is totally legitimate). the key is to get a reliable and knowledgeable legal representative. Some attorney firms have started to specialize in debt review matters even having debt Counsellors on their teams to offer great service.

Since attorneys do not work for free, the NCR have issued a guideline that consumers pay towards legal fees in the second month of the process. this has become an industry norm (though it is not found in the National Credit act). What then happens is money will be taken from your first payment toward the debt Counsellors fees and from your second payment to the attorneys.

What will help you make a success of your debt review is to get to know who your attorneys are, where their offices are and who they are. they (and the debt Counsellor) will produce documents for court about your situation. the court will want to know that (1) you know about the debt review and (2) agree with the plan. for this they will ask for an affidavit signed by yourself. this is needed before the court matter can get sorted out so you can help speed things along by signing and having commissioned this affidavit. Your attorneys or debt Counsellor will tell you how to do that.

the key is to do so quickly when asked. this protects you from creditors who might not totally like the plan and want to try other legal means (expensive ones) to try get you to pay more.

STEP TwOknow who your attorneys are and sign your court docs as speedily as you can.

Money, Money, Moneyonce you have an idea who your debt Counsellor and attorney are there is another important party to a successful debt review. Since debt review is about paying money to your creditors we take a moment to talk about the people who handle your money during the process: You Payment distribution agency.

as per changes to the National Credit act consumers do have the option to manage their monthly payments towards their creditors themselves throughout the debt review process. While simple sounding, in practice this is not really the case. Some creditors change account reference numbers when consumers enter debt review meaning if the consumer pays as they did in the past the funds will not be allocated to the correct account. another challenge is that the debt restructuring repayment plan as designed by the debt Counsellor will normally call for differing amounts to be paid on different months to the credit provider over time. many consumers find this very hard to manage. in fact, most would like to make a single payment toward their debt and then rather focus on the month to month challenges they face. this is where service providers like Pdas come in. in the past some had issues with Pdas as they were not written into the NCa. this objection is now firmly in the rear view mirror now as the amended National Credit act clearly makes provision for the registration of Pdas and outlines their services.

for many debt Counsellors their terms and conditions of registration (with the NCR) require that they not accept funds directly from a consumer. the terms and conditions naturally do not extend to the consumer but are accepted by the debt Counsellor. in such cases, even if the consumer is paying their creditors directly, consumers have to make payment of their monthly aftercare fee to their debt Counsellor via a third party such as a Pda.

Step 3 in making sure you have a successful debt review is to find out who your Pda is going to be. obviously under the Consumer Protection act you can decide which of the 3 main Pdas you would like to use but normally your debt Counsellor will have one of the three that they work with for all their clients. this keeps costs down for them and allows them to work closely with one firm which reduced their workload as well. Normally consumers go with which ever Pda their debt Counsellor is using at the time and recommends (debt Counsellors can switch Pda). One Easy PaymentConsumers will make payments (of the one set total debt restructured monthly payment – which is normally much less than what they were paying in the past) directly to the Pda. Your debt Counsellor will provide you with those banking details. make sure it is not into the debt Counsellors personal account but to one of the 3 current NCR recognised Pdas (more may

register soon) dC Partner Pda, Hyphen Pda, NPda (from dCm group). Each have websites you can visit for more info.

the Pda will provide you with a monthly statement tracking your payments and the rough balance that is worked out according to the computer system. Watch out though this is not the figure from the creditors. the creditors systems sometimes don’t get adjusted fast enough or even at all until the debt Counsellor complains. While the statements will track payments it is good to know that normally creditors try to add all sorts of minor fees and charges which mess with the final balance when it comes time to close out an account. this has lead to many issues across the industry and can lead to consumer disappointment when they think an account is paid up but the creditor demands more money. the NCR recently issued a guideline about these end balance issues and basically said that consumers must just pay more...

the Pdas keep proof of every payment (something consumers forget to do if making payments themselves) and are able to prove how much was paid and when. Consumers will pay a small fee for the use of a Pda (just like you would normally pay for various debit orders and whatnot for all your credit accounts before entering debt review). the fees are set by the dti and are adjusted from time to time.

STEP 3Find out who your PDa is. make sure you are paying them directly and get your rough guide monthly statement.

Spending habits & BudgetingWhen a consumer signs up with a debt Counsellor one of the first things your debt Counsellor will ask about, is your monthly household spending habits. this is not your payments toward your debts but rather the money you spend each month on things like food, transport, phones and insurance. for many consumers their total monthly spend is a bit of a mystery. many are not sure. few make allowance for the smaller or unplanned expenses that come along. this is one of the reasons why the debt Counsellor will ask. they need to figure out if you are spending too much on one thing and not enough on another.

for example, you may be paying a large amount for digital tV subscriptions but have no insurance on your car (which is actually required for vehicle finance). Consumers also often are so busy trying to pay their debt that they never have the chance to set funds aside for annual expenses like car and tV licenses or school clothes and books in Jan.

Changing Mindsets When starting debt review consumers go through the challenging switch from a credit lifestyle where unplanned expenses are simply added to the credit card to having to save up in advance for things (including the unexpected).

after looking over the consumers monthly spending habits (even looking through your bank statements etc.) the debt Counsellor will talk you through suggested changes that you need to make. they will remind you to save for particular things and what you need to cut back on. they will then set you a monthly budget figure and show you how they suggest you spend your money each month. they will also then work on the funds left over from your salary and how those can be allocated to your creditors in a fair way.

Consumers who want to make a success of their debt review need to stick to the budget. this doesn’t mean that you have to spend every cent exactly as your debt Counsellor has suggested. You may find ways to better the target they have given you but you should definitely take notice of any figures they mentioned that you should be saving towards. if you fail to save towards those figures (like school books) you will not have funds to cover those costs when they come and you don’t want to ever miss a payment or steal some funds from your monthly debt repayment amount. Consumers should also be aware that over time things cost more due to inflation. this means that if you are not able to earn more to cover these increases then you need to spend less on things and cut back even more than before to keep within your budget.

another wise step is to track your spending habits very closely for a month or two. keep each till slip and write down every cent you spend as a family. add all the figures up and actually track where the money is going.

Some families use the envelope method in setting out funds for their various expenses each month. Putting cash into labelled envelopes allows for a quick visual budgeting exercise. You spend out of the envelope for the thing it is labelled. When the envelope runs dry you stop buying that thing (e.g. airtime for your phone). if you need to spend more you have to steal from another envelope and it helps you track what you are spending and where you are spending more than you thought. Just keep that cash safe! STEP 4Stick To Your Monthly Budget.

the final and perhaps most important step that will make or break your entire debt review is actually a simple one. Pay. it is as simple as that. once your debt Counsellor lets you know what your new reduced monthly repayment amount toward your debt will be, pay and never miss a month. this payment will be done either via your Pda in one easy payment or for a few brave souls by themselves to all their creditors.

Breaking Old habitsSometimes, if consumers do not save toward annual costs or if they get confused by a collections call from a collections agent who doesn’t know about the debt review the consumer may skip a payment. Some consumers think if they miss a payment there will be no consequences (they may have this bad habit from before when they missed payments on their credit accounts). many consumers decide to spend money on gifts for kids in december rather than pay their debt repayments. Little do they realise the kid may get a gift but end up losing the roof over their heads. others decide that they would like to head home to visit family in other parts of the country over the Easter weekend. if they haven’t saved for this out of their monthly budget amount this means they probably don’t have enough to cover their monthly debt review repayment and they skip a payment.

There is no room for reduced payments or missed payments while under debt review. it is a court arranged, ‘last chance’ to pay debt responsibly. if a consumer misses a payment, their debt Counsellor may be the first to notify them that they are going to be removed from their services and that creditors will have the right to take new legal action against them. if not their debt Counsellor then their creditors have the right to take legal action and the debt Counsellor will not be able to (or want to) protect them from that.

Never Miss a Paymentit is important to know that credit providers cooperate with the process and adjust things while you are under debt review (adjusting the monthly payment amount required and often reducing the interest figures by agreement) but should you drop out of debt review (for any reason) they will enforce the original contract. the scary part is that according to the original contract you are meant to ha e paid the full monthly repayment amount and not the reduced one. this means that you will suddenly be behind on payments by a huge amount. this will make things incredibly difficult for you and will normally mean that should you miss a debt review payment they will take the account out of their debt review department and hand it over to collections who will demand huge arrears from you or hand you over to lawyers. the lawyers will be more than happy to get a summons against you and try get a court order. armed with that they will either go after your salary or even try take your goods or reposes vehicles or auction of houses. they will not care about any of the debt review payments you made during the time you were under debt review and how good you were. they will focus on the missing amount according to the original contract.

STEP 5Never, ever, ever, ever miss a payment... ever!

this was the question which has slowly been climbing its way from court to court across the country in an effort to get clarity on a particular section of the National Credit act which comes into effect when consumers start to miss debt repayments and the credit provider wants to begin legal action...

CaN aN aCCOUNT BE REINSTaTED ONCE JUDGEMENT IS GRaNTED?

the particular case involves ms Nkata and first Rand Bank. ms Nkata took a bond with fRB. When she hit financial difficulties she allowed the debt to fall into arrears and eventually the bank decided to begin legal action. they sent ms Nkata a Section 129 letter advising her of her options (to bring the account up to date or to go see a debt Counsellor). at this time she was unable to sort things out. Naturally fRB went to court and got a judgement and then moved to sell the property. it was only at this point ms Nkata decided to pay up the outstanding amount on the account (there had been extra legal costs incurred but she did not know about those and so only paid the arrears amount). it was after this time that the house was actually sold to another party.ms Nkata was not happy and took the matter to court since she had done what the Section 129 letter (particularly 129(3)) said to do. Because she had not paid any of the enforcement costs fRB felt that the account was not up to date and because they had already been allowed by a court to sell the house they felt the matter as closed. after their day in court the High Court agreed with ms Nkata and said that fRB had to set things right. Seeking further clarity on the issue (which has big ramifications) the credit provider challenged this ruling on appeal and actually won the case at the Sa appeal Court. it seemed that a judgement and warrant of execution meant no more chance for a consumer to revive a credit agreement.

was This a Constitutional Matter?the case was not over though, as the matter was successfully referred to the Constitutional Court

which is Sa’s highest court and consider the only the most serious cases of national importance. an organisation called SERi (Social-Economic Rights institute) got on board on ms Nkata’s side of the fence and helped argue the matter. at this highest level, the court heard all the arguments in regard to NCa S129(3). Particularly of note was the question of (1) was this too late to try reinstate the agreement between creditor and consumer and (2) what about the costs of enforcement which had been added to the account for the legal action and sale? ms Nkata had not covered those costs in her catch up payment. a third issue was (3) did the consumer have to give notice of having made such a catch up payment and wanting to reinstate the credit agreement?one of the main points that has come to the fore from the Constitutional Court ruling is that consumers can’t realistically be expected to know the legal costs before being informed of them. this makes sense as the credit provider normally will only inform consumers of these much later. also consumers probably don’t know about notifying creditors that they want to pay arrears and revive an account but creditors do have access to the account balance and can see when such catch up payments are made. the ruling was in ms Nkata’s favour and potentially much to the benefit of many similar consumers.

what Now?Credit providers now face an extra hurdle to jump in enforcement. the question is how to deal with this change in understanding based on this ruling. do they (1) inform consumers of the costs as they add up, bit by bit (but what would constitute the consumer being made aware of them etc?) or do they (2) have their collections/legal service providers do so on their behalf (once again piecemeal)? Would those costs be the final accurate costs? do they (3) try rush the executions or final sales of assets to avoid this situation altogether? do they (4) institute another level of checks before the asset is handed over to a new buyer to ensure they are not handing over an asset which account has been reactivated or revived as per NCa Section 129(3)? it is a tricky situation and one that could come up more over time as troubled consumers make last minute plans to bring the accounts back into good standing.though this case involves a particular bond for a particular client, the legal principal holds true in regard to all similar accounts and sets an important precedent about S129(3) which will have to be taken into consideration by credit providers when enforcing their rights through judgements and warrants of execution or auctioning off fixed assets.

a Judgement and Even a warrant are Not The End For Consumersthis case shows that a judgement is not ‘executed’ when a warrant of execution is issued but only once an asset is actually sold. it also makes clear that this process of reviving the account cannot be denied or opposed by a credit provider simply because they do not want it to and prefer to carry on with a sale or auction. it happens automatically as long as the actual sale has not occurred. this is good news for consumers in a similar position. immediately it makes one think of vehicle repossessions and plans to auction off vehicles when consumers can make a last minute catch up payment.

DEBT REVIEW AWARDS

3

over the last half a year, the organisers of the annual debt Review awards have been consulting with industry role players and progressively refining the debt Review awards process. time flies and before you know it, it’s time for the debt Review awards process to begin again.

this year the process will run from april till June 2016 as the industry get involved to help determine who this year’s big winners will be. the results of the process are announced at the end of June - around the same time of year as the National Credit act came into effect- at a modest red carpet event which will be held in Cape town this year. Speakers, nominees and guests from across the industry and around the country gather to find out who has taken the top spots in the industry this year.

PROCESS ChaNGES IN 2016this year will see the use of an online system to gather information from NCR registered industry role players. all Credit Providers and debt Counsellors will have the chance to weigh in on the results using the online portal. april sees CPs and dCs signing up to participate (and be considered), may will see the bulk of the work with registered parties weighing in on opposite sides of the industry. for example debt Counsellors will get to give feedback on Pdas and their services as well as the various different types of credit providers. Credit Providers will also be able to weigh in on Pdas and dCs. No dC can weigh in on another dC and neither can CPs comment on the performance of a competing credit provider. the results are not based on the amount of clients serviced or the amount of money moved but rather the companies’ level of service to consumers and interaction with other role players in the industry.

in the past, a panel of industry experts from across the country and from a variety of sources, ages and size organisations was used. this allowed these industry experts to bring their many years of experience to bear on the current standing of firms in the industry. many hours were spent

ThE PROCESS BEGINS

by lots of hard working volunteers and their help was much appreciated. this year the online peer review system will replace this panel process. the new peer review process has been well received by not only the NCR and Pdas but also BaSa, mfSa and the various dC associations.

When the peer review process ends (during may 2016) the results will all be calculated by the online software and then verified by the auditors before the debt Review awards gala in June. debtfree will also report on the gala and the results, so be sure to follow us on twitter and facebook, as well as the website (www.debtfreedigi.co.za) on the awards weekend (the gala will be held on the 25th of June 2016). members of the debtfree team don’t participate but we will be sure to observe and report throughout.

COUlD YOU BE a wINNER?While there are thousands or NCR registered parties on both sides of the debt review fence only a handful will take home the top spots across each category. if one thinks about vehicle finance credit providers, the mental list which comes to mind is perhaps a shorter one that when contemplating the many micro finance credit providers. Regardless, the process allows for NCR registered credit providers and debt Counsellors to only be evaluated in comparison to similar firms offering similar services. the system will present each group of registrants (e.g. Banks, Pdas, debt Counsellors etc.) with a specific set of review questions which they can research and complete. the information gathered will be in regard to recent performance of the firms under consideration and not old legacy stuff. also to be announced this year are those firms who are top 5 performers in various categories. along with the awards and top 5 spots comes a certain level of (deserved) bragging rights. in an industry as wide as ours, being single out of the crowd shows a commitment to making the process work, and servicing the needs of consumers effectively.

INvITES TO PaRTICIPaTEYou can sign up to participate in this year’s awards process by visiting www.debtreviewawards.co.za (note: there are terms and conditions and you do need to be registered with the NCR etc.).

in the past, a consumer vote regarding who their favorite registrants took place at the same or a similar time. this will not be happening over the next few months but may happen at a later stage in the year.

members of industry associations such as BaSa, PdaSa, mfSa, dCaSa, allProdC, BdCf will all receive invites to participate via their associations. Parties can only register once per NCR registrant and the system is pretty straightforward. debtfree got to do a test of the system (please note: our [(and other testers] test results won’t be included) and it was easy as 1, 2, 3.

Be sure to add your voice to that of the industry and join in the debt Review awards process.

South Africa’s leading Debt Counsellors

www.DCCSupport.co.za

DEBT REvIEw IS a MaRaThON aND NOT a SPRINT

We all know that the debt review process works well for those who stick to their payments and make long term changes in their lives. dCCS want to help share that message while assisting vulnerable loyal debt review consumers though the tough cold months ahead. interest rate hikes, increases in fuel and electricity prices are going to hit some of these families hard and dCCS want to do what we can to keep these consumers in the process. With your help we can!

wINTER waRMER PROJECTone of our volenteers will be running the 2016 Comrades marathon in an effort to genereate funds for our winter warmer project.

hOw DOES ThE wINTER waRMER PROJECT wORk ?With the help of the greater debt counselling community we will identify those consumers who are loyally paying but under increased pressure to make ends meet this winter.

dCCS will then get a hamper together (with funds from the sponsors) to send to this family.a Winter Warmer hamper will consist of the following:

• Blankets • food / food Voucher • Warm Clothes• toiletries • dCCS will then publicise the hampers getting to the families!

hOw YOU CaN GET INvOlvED ?the comrades is a up route (the tougher one) this year and is 87.612 km long . our volunteer has 12 hours to complete the the route. there are 6 cut off points that must be made in a spesified time at various distances.

You can donate an amount of your choice for each cut that the vollenteer successfully makes.

alternatively you can donate an amount of your choice for each km the volenteer completes

another option is to donate an amount of your choice if the volunteer successfully completes the Comrades within the 12 hour window.

Below are the cut off times

ExPERIENCE ThE PaIN aND GlORY lIvE ON YOUR MOBIlE DEvICE!our volunteer will run in an easily identifiable shirt that will be specially designed for the project watch out for her on the route in person or on tV. technology is great and you can also trace Bernidene with her race number on an app that will be sent to all the sponsors involved.

BEEN ThERE... GOT ThE T- ShIRTSponsors will get a copy of the specially designed t-shirt (one per sponsor involved*) that is fully branded which you can later display. the shirt will be used on race day to promote your brand in photos of our runner. along the route, photo’s will be taken at each cut off point with some of our other road side volunteers. the road side volunteers will be wearing fully branded shirts displaying sponsor logos.

due to race rules, our runner can not run in a branded shirt with sponsor logos on. this is why we will have road side volunteers in your branding. that said, the run itself is all about generating funds for the Winter Warmer project. our dCCS team will do promotion in social media and online in regard to sponsor brands to ensure your brand gets out there. We want to make sure we promote your brand for helping sponsor our project.

BaCkGROUND ON OUR vOlUNTEER RUNNERBernidene Thieroff the good news is i have successfully completed the Comrades race twice. though a tough “up” run this year this will be my third race. my best time was 11:45 on my first comrades attempt, i am not a great athlete, but i love to run, and to be part of this project is a great honour.

why the Comrades?Well , running the Comrades can be compared to a client that applies for debt counselling: at first you are excited and ready for the challenge. When you start the process you are motivated and strong. the true challenge comes when you are in the middle of the process then , you must really work hard not to give up. the challenge is to think beyond the moment and remember your end goal and to push through and not to give up

Your spectators ( debt counsellor) are there throughout, next to the road cheering you on , motivating you and keeping you focused on your goal. When you reach the end (or are close to the end) all your pains and worries tend to fade away. You have made it ! You have reached the finish line and have overcome a massive obstacle. for consumers they are finally debt free. What a great feeling.

i am ready to carry the dCCS banner this year and give it my all. it will be great to know that the community will also be sponsoring funds towards fantastic loyal consumers with every step i take.

*on request, more shirts can be printed and sent to you at a small additional cost

EvEN zUMa haS TO PaY BaCk ThE MONEY

IN a NUTShEll

“the Constitutional Court has found that President Jacob Zuma failed to uphold, defend and respect the Constitution as the

supreme law of the land. He has been ordered to pay back the money.” –Eyewitness News 31 march 2016

the president spent R246 million on non-security features at his Nkandla home in kwaZulu-Natal. this is money that ‘he borrowed’ from the state and ultimately from the people of South africa. He claimed that he was unaware of the features built and the money that was spent.

Just like Zuma people often borrow money mindlessly, without a clear understanding of the legal repercussions when they fail to honour their debt obligations.

We clearly have a serious problem in South africa given that almost 50% of credit active individuals are not meeting their debt obligations. Why is this statistic so high? and what can be done to reduce it?

over-indebtedness doesn’t just affect individuals but all of society. it is a complex social and economic phenomenon which impacts families, communities, reduces economic growth, and ultimately hurts all South africans.

according to a European union debt policy paper, “at low levels, debt is a good thing. it is a source of economic growth and stability. But, at high levels, private and public debt is bad, increasing volatility and retarding growth. Beyond a certain point, debt becomes dangerous and excessive. Household debt went over 100 percent of gdP only twice over the last century (1929 and 2006), each time leading to massive financial crisis and economic recession.”

there are a number of reasons people become over-indebted.

Poverty, Scarcity and UnemploymentBeing poor means coping not just with a shortfall of money, but also with a reduced ability to make wise financial decisions, not because of inherent personality traits, but because the very context of poverty imposes additional psychological stress. the poor borrow money at less favourable rates often to pay for rent, transport, phone bills and food. this is true not just for low-income people, but for people whose circumstances, like divorce and death force them into poverty.

People with well-paid jobs sometimes lose their jobs and are left with large mortgages without the prospect of increasing their income in the near future.

Young Families Young families face many expenses tied to housing, living expenses and children. many expect their economic situation to improve over the years and thus feel confident to borrow. Confidence in the future makes them less risk-adverse, which can lead to indebtedness.

IN a NUTShEll is brought you by the DCM Business Partnership Programme™, designed to support debt counsellors and consumers during the debt review process, in collaboration with the National Payment Distribution agency (NPDa). For help, contact the NPDa on 0861 628 628.

The NPDa was recognised as the industry winner for PaYMENT DISTRIBUTION and Care Premier as the industry winner for DEBT COUNSEllING SOFTwaRE at the Debt Review awards 2015.

If you have suggestions for topics that you would like covered in future, please email info@dcmgroup.co.za

Behavioural IssuesWe live in an era where people succumb to many societal pressures and influences. the pressure to ‘fit in’, the rise in consumerism, enticing advertising and temptation play havoc with individuals’ self-control.

Debt Counsellors can helpdebt counsellors have an invaluable role to play in helping over-indebted people regain financial stability. their work doesn’t just benefit the individuals concerned, but their families and society at large. debt counselling should not just be about the completion of forms, but should also address the various reasons that people fall into too much debt. Consumer education, financial literacy training, participation in consumer forums, regular progress checks and payment reminders help to ensure debt review compliance and minimise terminations. the dCm Business Partnership Programme™(dCmPP) was designed by dCm and the National Payment distribution agency to assist debt counsellors from the very first encounter with their consumers up until the first payment is received and beyond, with the goal to fully rehabilitate consumers. it is designed with in-depth knowledge of how over-indebted consumers think and behave. With no change in operational costs, debt counsellors can use a programme like the dCmPP to assist their clients and increase the conversion rate of first payments.

the repercussions of over-indebtedness are so severe that a multi-party approach is required from the state, credit providers and debt counsellors. all parties need to take more accountability and employ proper measures to ensure debt levels remain below the point of prejudicing society and the economy.

the reality is that no one is above the law, or immune from the impact of too much debt, not even a country’s president.

Zuma’s ill-considered antics over the past year have taken a heavy toll on the rand and, naturally, South african consumers. one poor decision after the next, Zuma sent the rand plunging at the worst time possible. Just as our country faced devastating drought, the worst since 1992. as a result, food prices soared and continue to do so, with the farming industry now in a recession.

the destructive domino effect on our economy, set in motion by Zuma’s habitual political scandals, has swept across our nation leaving chaos in its wake. moreover, as our weaker currency prevents us from taking advantage of record low oil prices, we can only expect fuel prices to get higher and higher.

Here are just a few of the Zuma scandals that have erupted over the past year, causing the currency to bomb and the South african consumer to suffer needlessly. National debt advisors (Nda) fights for consumer justice. if you are in financial trouble, don’t suffer in silence – reach out to us.

1. Nenegate on december 9, Zuma announced that he would be firing finance minister Nhlanhla Nene and replacing him with the little known des van Rooyen. as a result, the rand weakened by almost 5% that evening. on January 11, the currency bombed to a record low of R17.92 to the u.S dollar. a weaker rand causes inflation to accelerate and prices to skyrocket. Suddenly, even the basics become unaffordable. this is especially true for those in debt. Nda can help, so please get in touch.

2. Nkandla in 2014, the country’s ombudswoman, Public Protector thuli madonsela ruled that Zuma had “benefitted unduly” from so-called ‘security upgrades’ to his Nkandla residence in kwaZulu-Natal. the work to Nkandla cost a whopping R246 million, which came straight out of taxpayer’s pockets.

3. Guptagate on march 17, the rand slipped by 0.64% to R15.74/$. this was after claims emerged that the wealthy gupta family, close friend and ally of Zuma, was behind the sacking of Nene in december.

4. Sars wars on march 16, a political row between Zuma, gordhan, the South african Revenue Service (SaRS) and the Hawks reached boiling point. Subsequently, the rand sacrificed most of the gains it had made since the end of January, tumbling to its weakest in over two weeks.

due to the weakening rand, the Reserve Bank has since taken aggressive action to curb inflation, hiking interest rates by 50bps up to 6.75% on January 28, and again by 25bps to 7.00% on march 17.

interest rate hikes and the rising cost of living have tipped many consumers into over-indebtedness.

If you are struggling financially, speak to NDa about professional debt counselling.

Free State friday, 29 april 2016

kzN friday, 20th may 2016

western Cape tuesday, 24th may 2016

Gauteng Wednesday, 18th may 2016

Eastern Cape friday, 15th april 2016

Please RSVP to dcasa@dcasa.co.za for further details.

Bookings for the annual Conference in august now open to all. Email admin@dcasa.co.za

DEBT COUNSEllORS aSSOCIaTIONS aNNOUNCEMENT BOaRD

Help our sponsors (& thus DCU) get in front of Sir Richard Branson. & be part of their corperate social responsibility program

Please vote https://www.vmbvoom.com/pitches/gateway-2-digital

www.newera.org.za

www.bdcf.co.za

Would you like to attend our next meeting in Cape town? Email finance@allprodc.org

Wold you like to attend our next meeting in Bloem?Email zune@allprodc.org

www.allprodc.org

our agm will be held on 6 may 2016. all members are welcome to attend and to vote.

www.dcasa.co.za

APRIL

CONTaCT DETaIlSfoRum: www.debtconcern.webs.com / WEBSitE: www.allprodc.org /

faCEBook: www.facebook.com/allProdC / tWittER: www.twitter.com/allProdC

REGIONal MEETINGS

Cape Towna small regional meeting was held in Cape town recently to discuss our local membership and needs. another follow up meeting is planned for the near future (check the facebook page for more info on dates). members are free to invite other dCs and their staff to the meeting.

BloemfonteinWe plan to hold a regional meeting in Bloemfontein shortly. if you would like to attend please mail zune@allprodc.org for more details or post on the dedicated members facebook group.

our goals as an association we have collective goals which our members wish to pursue. as we all push toward these common goals we know it will benefit both our members as well as consumers who we are able to assist through debt review. Here is the list of our core goals which we will continue to focus on in 2016:

1. to promote consumer protection and knowledge of the industry.

2. to promote a sustainable credit industry.

3. to educate consumers about their rights in particular in regard to the debt counselling process.

4. to promote debt counselling as an effective solution to consumers facing over-indebtedness.

5. to create a forum for debt counsellors where we can discuss policy proposals and debt counselling matters

6. to promote an understanding of the role of the debt counsellor as part of the local industry development.

it is good to review these goal from time to time so that we can encourage others to join our association or at least to pursue similar goals and improve our industry.

Not a Member Yet?if you are not a member of a debt Counselling association please feel free to join us at one of our upcoming meetings. We would love to have you attend and share your thoughts on the process and challenges you face. don’t practice in isolation, join allProdC and join in promoting the debt counselling process.

NEWSLETTER

When debt Counsellor michelle Barnardt was ordered to pay costs because of following ‘NCR guidelines for debt Counsellors’ she decided it was time to let others know about the systemic issues that challenge debt review and the current commonly followed debt review processes.

lETTER FROM a REaDER

in april 2016 michelle issued an open letter to the industry, directed to the NCR, in the hopes that what has happened to her is not repeated elsewhere with debt Counsellors having to cover huge legal costs which might cripple their practice. the intent of the letter is not to make trouble but rather to highlight practical outcomes from the appeal Court Judgment Barnard/Coetzee vs mfC /fNB Case a801/2014. as part of this case the credit providers (in a total turn-around from years of supporting the NCR task team and later Cif guidelines) argued that the dC had caused the consumers accounts to go into default by doing the agreed industry norm (and NCR advocated) taking Professional fees from the consumer’s first debt review payment and then allocating legal fees from the second payment. the Court didn’t really like that. this is the judgement that gave rise to the NCR circular saying that the Court obviously didn’t want to make problems for the industry by changing how payments are done. if you would like to read the open letter and consider some of the very valid issues raised therein then here we go:

the letter is rather long, if you would rather just download it and read it later then you can do so here: http://debtfreedigi.co.za/wp-content/uploads/2016/04/oPEN-LEttER-to-NCR-7-aPRiL-2016.pdf

SKIP THIS ARTICLE

DOWNLOAD

Dear Regulator

it is common course in the debt counsellor’s fraternity that there are serious problems that need to be addressed as a matter of urgency. it is my humble submission that due to a lack of leadership and proper guidance to all parties, the debt counselling process has developed into a laissez faire breeding ground for litigation where the legal fraternity hijacked the process to the detriment of consumers in particular and debt counsellors at large. this is a flagrant contradiction of the spirit and purpose of the act.

a recent High Court Ruling1 questioned the validity of computer based debt restructuring programs which the National Credit Regulator insist debt counsellors use. the Judge ruled proposals to be fatally irrational (47) and that it effectively granted the consumer perpetual credit at the expense of the creditor and that this is a violation of the purpose of the act (33).Being the debt counsellor in the case i was forced to conduct my own investigation and was appalled to find that the debt counselling process was hijacked and taken on a route that is so far removed from the provisions of the act that if and when proposals are challenged in higher courts, it falls apart and are declared irrational at the expense of the debt counsellor and the consumer.

Based on the Judgment, i raised a formal complaint with the National Credit Regulator on the 5th of august 2015. it took the Regulator eight months to finalise this urgent complaint with the final reply dated the 6th of april 2016. the outcome of the complaint is not in accordance with Section 140 of the act which prescribes that the Regulator must either refer the matter to an adjudicating body to deal with it or issue a non referral notice to allow me the complainant to refer the matter to the tribunal. although Section 15(a) of the act state that the Regulator may not adjudicate in any dispute the Regulator indeed declared that the creditors did not contravene any provisions of the act and “closed the file”.

i submit that during my investigation i found that the fundamental principles of debt review have been applied wrongly; and realised the catastrophic implications this have to all consumers who have applied for debt review over the past eight years.i therefore feel obliged to write this open letter to the National Credit Regulator and bring this to the attention of everybody who on a daily basis perform duties set out by this act or anybody who may be affected by any provision of this act.

on behalf of Concerned debt Counsellors, i humbly submit the outcome to my investigations and the basis for our concerns. We request the industry to address these serious issues and bring about necessary changes so the process will be in line with the provisions of the act.

1 appeal Court Judgment Barnard/Coetzee vs mfC /fNB Case a801/2014

CONTENT OF ThIS lETTER

Basic framework for the debt counselling processdebt Review Process determination of over indebtedness Role of Credit Providers in the debt Review Process different types of applications How to rearrange the obligations of the over indebted consumerCurrent debt review rearrangements to the detriment of over indebted consumersdebt Review fee guidelines Page 9Conclusion Page 10to resolve this serious situation NCR to investigate and address NCRdebthelp program NCR to review and withdraw guidelines NCR to apply for declaratory order

BaSIC FRaMEwORk FOR DEBT COUNSEllING

Magistrates Courtsall magistrates’ Courts are “creatures of statute” and have as such no inherent jurisdiction. S170 of the final Constitution provides that a magistrate’s Court may decide any matter determined by act of Parliament, but does not possess the power to enquire into a rule on the constitutionality of any legislation.

Debt Counsellorin National Credit Regulator v Nedbank Ltd; du Plessis held that the debt counsellor is the applicant in a debt review application. their role is neutral and in referring a matter to court in terms of S86(7) they are fulfilling a statutory obligation as a pro forma applicant. the debt Counsellor has a duty to assist the court and should be available to render such assistance by way of furnishing evidence or making submissions as to his or her proposals or to answer to queries of the court. it is important to note that the registration conditions of a debt counsellor also ascertain that a debt counsellor should not enter into any agreement or engage in any activity which may prevent him or her from acting in the best interest of the consumer to whom the debt counselling services are provided - (point 5 of registration conditions).

The actSection 2(1) of the NCa states that when interpreting the sections of the NCa, effect must be given to the purposes of the NCa. it is important to always determine what the intention and purpose of the NCa is when interpreting any provision of the act.the objects of the act are set out in Section 3 and are directed at providing protection for the consumer and addressing imbalances that exist between consumers and credit providers. S3 sets out three main purposes, namely to promote and advance the social and economic welfare of South africans, promote a fair, transparent, competitive, sustainable, responsible, efficient,

effective and accessible credit market and industry, and to protect consumers by-(g) addressing and preventing over-indebtedness of consumers, and providing mechanisms for resolving over- indebtedness on the principle of satisfaction by the consumer of all responsible financial obligations.

the National Credit act must be interpreted in a manner that gives effect to these objects.

DEBT REvIEw PROCESSthe National Credit act 34, of 2005 read with the declaratory order National Credit Regulator v Nedbank Ltd and Supreme Court of appeal Judgment : Nedbank v the National Credit Regulator (662/2009 & 500/2010) read with case law and written papers by legal professionals have reference.

Determination of Over IndebtednessS79(1) read with S78(3) provide the definition of over-indebtedness. in order to declare a consumer over indebted the requirements as set out in these sections must be met.the first problem that arises which i humbly submit has not been interpreted or applied correctly is S79(3) setting out that during the process of determining over indebtedness, a debt counsellor need to consider the “settlement value” of all credit facilities when calculating the consumers over indebtedness. this will be the total balance outstanding on the credit facility and not the minimum monthly payment required.

Information required to determine over indebtedness that will form the basis of a rearrangement proposal:Regulation 24(7) list all the details which a consumer need to submit at the time of application when completing the application form (form 16).

Regulation 24(1)(iv) is very clear on what information should be submitted by the consumer in terms of his credit agreement :- List of all debts, disclosing monthly commitments, TOTal BalaNCE OUTSTaNDING, original amount, and amount in arrears. the above information is required for all credit agreements under the NCa and are duly listed separately each under its own subsection under Regulation 24(1)(iv) referred to under (aa) to (ee)

Role of the Credit Providerin terms of Regulation 24(3) a debt counsellor should verify the information received from the consumer with the credit provider. Regulation 24(4) make it clear that in the event that a credit provider fails to provide a debt counsellor with the correct information within five business days of such verification being requested the debt counsellor may accept the information provided by the consumer to be correct. in terms of Regulation 24(1) the credit provider must verify TOTal BalaNCE OUTSTaNDING, monthly instalment, the original amount and if in arrears the amount in arrears. it is not required that the creditor provide new information but only to confirm or verify the information provided by the consumer to the debt counsellor.

in terms of S86(5) the credit provider must (a) comply with any reasonable requests by the debt

counsellors and (b) participate in good faith in the review and in any negotiations designed to result in responsible debt re-arrangement.

the credit provider should be included in negotiations and proposals when a consumer is not yet over indebted but experiencing financial problems in terms of S86(7)(b). Such rearrangements may be made in terms of Section 116 of the National Credit act.

DIFFERENT TYPES OF aPPlICaTIONthere are three possible outcomes. i will only be dealing with the second and third outcomes. 1. the consumer is not over indebted; 2. the consumer is not over indebted but experiencing financial problems; and 3. the consumer is over indebted.

Procedures in terms of Section 86(6), (7), (8) and (9)it is important to note that all rearrangements to be lawful need to be endorsed by either a court or the tribunal.

S86(7)(b) whEN ThE CONSUMER IS NOT OvER INDEBTED, but nevertheless experiencing, or likely to experience, difficulty satisfying all the consumers obligations under credit agreements in a timely matter the debt counsellor may recommend that the consumer and the respective credit providers voluntarily consider and agree on a plan of debt re-arrangement

S86(8)(a) if a debt counsellor makes a recommendation in terms of subsection 7(b) and the consumer and each credit provider concerned accept that proposal, the debt counsellor must record the proposal in the form of an order, and if it is consented to by the consumer and each credit provider concerned, file it as a consent order in terms of S138 and (b) if paragraph (a) does not apply the debt counsellor must refer the matter to the magistrate Court with a recommendation. Regulation 24(9) states that any arrangement entered into must be reduced to writing and signed by all credit providers mentioned, debt counsellor and consumer.

Point (23) of the Supreme Court of appeal confirms that the debt counsellor may recommend that the consumer and the credit provider voluntarily agree on a debt re-arrangement plan. if they reach an agreement it can be filed as a consent order with the Consumer tribunal or a court and if no agreement can be reached the matter must be referred to court.

the current task team agreements was formulated first in may 2010 by the actual task team and then again endorsed by the Cif (Credit industry forum) in 2015 to be issued by the National Credit Regulator as “debt Review task team agreements of 2010 guidelines”. it is my submission that these agreements can only apply to consumers who are not over indebted but experiencing financial difficulty. the software program called dCRS currently calculates proposals within a “conceptual framework” which include the following key features :-

“Simultaneous finance charge (fees and interest) reductions and term extensions up to certain defined limits in order to significantly reduce monthly payment obligations for

consumers (affordability gains) to overcome the debt stress situation. (annexure d of the task team agreements Page 4.

Point 4 “finance Charge Reduction concessions” the industry agreed to the following concessions. (annexure d of the task team agreements Page 4 – 5).

b) the reduction of monthly service fees (as per the NCa) as part of the finance charge on the agreement to zero.c) in respect of secured loans (mortgages and vehicles and asset finance transactions) a reduction in the contractual interest rate to the rate at which the case solves subject to a limit of the prevailing rate plus 2%, to be fixed for the rehabilitation term, where after the rate and fees will revert to contractual if the debt is not settled.d) in respect of all unsecured debts a reduction in the interest rate to the rate at which the case solves subject to a limit of 0%, to be fixed for the rehabilitation term.

When both the consumer and credit provider agree to these rearrangements the proposals will be confirmed by a consent order in terms of S138.

i therefore agree with the department of Justice that “only in instances where the debtor is not yet over indebted but likely to experience problems that the NCa provides explicitly for the parties to voluntarily agree on a debt re-payment plan which can then, if all credit providers agree, be filed as a S138 consent order”2.

it must be emphasized that the act does not provide for informal rearrangement. in terms of S87 all debt rearrangements must be made an order of court or the tribunal.

it is important to note that S116 should form the basis for these agreements where parties agreed to reduce interest rates and fees, as changes may only be made to an agreement in terms of S116(a) of the NCa. these changes must however reduce the consumer’s liabilities under the original agreement because it constitutes an alteration of the original contract. the new agreements must be recorded in writing and signed by both parties as provided for in S116(c) of the NCa.

Where the consumer is not over indebted but experience financial problems and no agreement can be reached the debt Counsellor will also refer the matter to the magistrate Court with a recommendations in terms of S86(7)(b) read with S86(8)(b) and S87(1). it is important however to note that proposals in this case will be in line with the provisions of S86(7)(c) as the magistrate Court is a creature of statue and may only make orders to rearrange credit agreements as determined and provided for in terms of the act.

S86(7)(c) whEN ThE CONSUMER IS OvER INDEBTED. the declaratory order National Credit Regulator v Nedbank declared that S86(7) requires the debt counsellor to seek an order from the magistrate Court.

2 debt Rescheduling application: Page 9 (point 10) department of Justice and Constitution RSa

“although S 87(1) (requiring the magistrate Court to conduct a hearing) only refers to S86(8)(b) (when consumer is not over indebted but have financial difficulties) the court found that the requirement to conduct a hearing indeed applies to matters that have been referred to the Magistrate Court under S86(7) (when consumer is over indebted) the court pointed out that a magistrate Court can only provide the necessary judicial oversight if it conducts a hearing and is therefore obliged to conduct a hearing and make an order in terms of S87(1)(a) or 87(1)(b) of the act where the consumer is over indebted. “3

“ take note, the court found that the provisions of S86(8)(a)(i.e. consent orders in cases of successful voluntarily arrangements) do not apply to cases where the consumer was found to be over indebted. the court pointed out that the finding that a consumer is over indebted sets in motion a process that is not voluntary. Nothing however prevents the parties from seeking a consent order when they have settled a matter and agreed on the re-arrangement” 4

“Negotiations are not required if the consumer is over indebted. the parties may enter into negotiations in order to settle the matter, but it is not prescribed by the NCa. it is therefore submitted that the effect of the court’s decision in this regard is that debt counsellors, in cases where the consumer is over indebted, are not obliged to send proposals to credit providers before a matter is referred to court”5

hOw TO RE-aRRaNGE ThE OBlIGaTIONS OF aN OvER INDEBTED CONSUMERS86(7)(c) if the consumers is over indebted the debt counsellor may issue a proposal recommending that the magistrate Court make either or both of the following orders

i) that one or more of the consumers credit agreements be declared reckless, or

(ii) that one or more of the consumers obligations be re-arranged by (aa) extending the period of the agreement and reducing the amount of each payment due accordingly (bb) postponing during a specified period the dates on which payments are due under the agreements (cc) extending the period of the agreement and postponing during specified period the dates on which payments are due under the agreement and (dd) recalculating the consumers obligations because of contraventions of Part a or B of Chapter 5, or Part a of Chapter 6 (in case of unlawful provision)

the act clearly makes a distinction between the term re-arrangement and recalculation. only when there is an unlawful provision - for example incorrect fees or interest rate that contravenes the act - is the debt counsellor allowed to do a recalculation.

the act states clearly that the debt counsellor may only re-arrange the agreement and provide specific details as to how this may be done. the word “rearrange” are defined in the american Heritage dictionary meaning “to put into a new order” and the Cambridge dictionary to “change the order, position or time of arrangement already made”

3/4/5 Communique : Page 1 declaratory order issue 1/august 2009 – by National Credit Regulator

it has to be noted that nowhere in the act does it makes provision for a debt counsellor to calculate interests and fees when rearranging agreements under a debt review application. Neither does the act require of a debt counsellor to verify any interest rates of any agreements including credit facilities.

Point 2.15 under the objects of the Bill of the NCa confirms the recommendation that may be made by a debt counsellor to “re-organise the consumer’s debt by extending the term of any agreement, postponing payments, re-calculating unlawful fees or interest, or ordering adjustments to improperly charged items”

in terms of Regulation 24(1)(iv) the rearrangement must be done on the Total Balance Outstanding. this balance is inclusive of all future interests and fees collectable in terms of the contractual agreement. the act do not allow for any additional interest to be charged on adebt review re-arrangement, which is confirmed by S66 of the NCa.

Section 66 a credit provider must not, in response to a consumer exercising, asserting or seeking to uphold any right set out in this act or in a credit agreement

a) discriminate directly or indirectly against the consumer, compared to the credit providers treatment of any other consumer who has not exercised, asserted or sought to uphold such a right;

b) penalise the consumer;

c) alter, or purpose to alter, the terms or conditions of a credit agreement with the consumer, to the detriment of the consumer;

d) take any action to accelerate, enforce, suspend or terminate a credit agreement with the consumer.

When charging a consumer under debt review additional interest, costs and fees on the extended term it refute the relief provided for in the act and is to the detriment of the consumer.

i herewith attach an example annexure E of a proposal done in terms of the provisions of the act as proof that the act intended rearrangements to be simple and logical without prejudicing the consumer or credit provider.

in terms of Credit Facilities it is important to note that the act require from a debt counsellor when determining over indebtedness that the settlement amount must be used as set out in Section 79(3) the act does not refer or mention instalments, interest rates or payment terms for a credit facility, it further does not differentiate between the allowed rearrangement for a credit agreement and a credit facility. these accounts are listed under the same Regulation 24(1)(iv)(cc)(ee)(ff).

Because the act does not define the word “charges” we still have to determine the correct interpretation of S88 in terms of S2(1) of the act read with S3 that credit should be transparent at all times.

Section 88(1) specifically provides that “a consumer who has filed an application in terms of debt review must not incur any further charges under a credit facility or enter into any further credit”

the word incur is very specific and give us some indication to what the legislator had in mind. When you incur something it is something undesirable. You incur penalties, expenses a parking ticket. You will not say i incur free tickets to the Rugby World Cup it can therefore not be interpreted to be applying only to additional credit.

also consider S4(6)(a) and (b)(ii) of the act and note that it refers to “charges” under S103(5) of the NCa which include interest. this should also be read with S100 to S103, which deals with charges and fees.

it is important to note the act only allow for rearrangement of the total Balance outstanding by reducing instalments, extending payment periods or postponement of payment dates.

additional argument:Debt review rearrangements do not include or allow additional interest over and above the contractual terms and obligationsit is important to note that proposals should be based on the total Balance outstanding, which includes all future interest and fees in terms of the contract as well as the contractual terms and obligations of the original contract. it is common course that a credit agreement may not be changed or altered under rearrangement and has so been confirmed in more than one judgment.

the consumer who applies for debt review is not in default because he is merely upholding his rights set out in the NCa. Regulation 24(1)(iv) also include the arrears to be included should a consumer be in default at the time he apply for debt review and the credit provider has not yet taken any legal steps to rectify the default.

a consumer cannot be both in default and not in default at the same time. debt Review does not constitute a default of the original credit agreement and S86(10) and S88(3) confirms this position since there would be no need to specify that there needs to be a default on the original agreement and debt review arrangement if an application for debt review constituted an automatic default.

in terms of the contractual terms and obligations of all credit agreements additional interest may only be charged if the consumer is in default.

CURRENT DEBT REvIEw REaRRaNGEMENTS aRE TO ThE DETRIMENT OF CONSUMERSPrior to the task team agreements of 2010 creditors correctly verified the total Balance

outstanding (Proof thereof are annexed to this letter as annexure a1 to a7)

What is very concerning is that debt counsellors then added additional interest on the total Balances which already included all future interests and fees in terms of the contractual obligation and or original agreement.

as an example I herewith attach a case currently under investigationConfirmed by the Contractual agreement (annexure B1):-Principle debt R127 378.94interests and other fees R57 249.46totaL CoLLECtaBLE R184 628.40

the consumer applied for debt review five months after the agreement was concluded. the CoB verified the total Balance outstanding in terms of Regulation 24(1)(iv)(ii) to be R179 048.45 (annexure B2)

the principle debt when the agreement was entered into was R127 378.94. the CoB also confirmed the consumer was not in default. it safe to conclude that the balance of R179 048.45 five months later is the total Balance outstanding which included all future interest and fees payable in terms of the contractual agreement.

due to software programs and training provided by the NCR the total Balance was used as the basis for the calculations and additional interest at the contractual interest rate was calculated and added on a monthly basis. this constituted a “refinance” and not a rearrangement. from month six additional interests – over and above as determined by the contractual agreement - was added on a monthly basis.

Eight years later:- the consumers statement dated 16 January 2016 confirmed that the consumer in total has paid back an amount of R226 231.85 (annexure B3). Note this is already R41 603.45 more than the contractual obligation.However; according to this Statement the consumer still has an outstanding balance of R90 114.17.if the consumer continues with payments the total payments made on this agreement will calculate to R316 346.02

keep in mind the principle debt is R127 378.94 and in terms of the contractual agreement the total collectable amount is R184 628.40. under the debt review rearrangement the collectable amount has spiraled to R316 346.02 due to the incorrect interpretation of the provisions of this act.

i respectfully submit that this is why Judge tuchten ruled these proposals to be “irrational in several material aspects” (Point 47) and that it also grant the consumer perpetual credit at the expense of the creditor and that such action violate the purpose of the legislation to achieve eventual satisfaction of the debt (Point 33) 6

6 appeal Court Judgment Barnard/Coetzee vs mfC /fNB Case a801/2014

We have a very serious problem at hand because over indebted consumers who applied for debt review during period 2007 to 2010 when credit providers verified total Balance outstanding have been exposed to unlawful practices; and instead of finding relief as provided by the act have been penalized by having additional interest added above their contractual agreement.

End Balance Differencesall debt counsellors and consumers under debt review, are challenged by end balance differences on a daily basis. although the consumer has fully satisfy all the obligations under the credit agreement in accordance with the order or agreement the creditors still claim an outstanding balance, and demand payment thereof. (Refer to S71(2)(b)(i) of NCa)

How does the National Credit Regulator deal with this serious problem? they allowed the Credit industry forum to issue guidelines (Proposed Process for End Balance differences Number 4/2015) which again are a violation of the act in terms of S2(1) and S3 which clearly state that credit at all times must be transparent. i also submit that this is a violation of S66 as the consumer is penalized because this “solution” constitutes changes of the contractual agreement.i quote from this guideline:-

the debt Counsellors must request an “updated cob” and it is concluded thatif the discrepancies between credit providers and debt counsellors/Pda balances are less than the sum of 3 months instalments, consumers will continue to pay these in accordance with the final proposal/court order until the balance, as reflected on the credit providers statement are paid in full.

if the discrepancies are greater than the sum of 3 months instalments, these accounts must be flagged as exceptions and dealt with as per the reconciliation procedure which constitute an investigation.

this guideline contradicts the act and is to the detriment of the consumer.apparently the Credit industry forum and the National Credit Regulator are not aware of S111 of the National Credit act which specifically deals with disputes and S139 and S140 allowing for a complaint procedure to be adjudicated by a body who has been appointed to deal with these disputes such as the National Consumer tribunal or the Consumer Courts. i fail to understand why the Regulator want to burden itself with the adjudicating of disputes.

DEBT REvIEw FEE GUIDElINESattached annexure C – NCR fee guideline and annexure D green gazette on debt Counselling fees

although debt Counsellors’ fees were first prescribed by a debt counsellors’ association called dCaSa; the NCR issued a letter in 2011 informing all debt counsellors that the NCR will prescribe the fees and the way these fees may be collected. the prescribed fees were published in the green gazette in 2011, however for unknown reasons it was never proclamated to be lawful and never published in the National government gazette as prescribed in S171 of the act. during the

7 appeal Court Judgment Barnard/Coetzee vs mfC /fNB Case a801/2014

hearing of the appeal case the counsel of the credit providers state that these fees were unlawful. Judge tuchten ruled that “the debt counsellor entered the dispute between the parties when she sought the order which give her fees and expenses preference over the claims of the creditor respondents. She perpetuated her personal involvement in the dispute in the matter in which she made the case of the consumer her own” 7 (Point 44)

for this the Honourable Judge ruled that my actions were male fide and ordered that i pay the costs in this application

Based on the fact that as a debt counsellor i merely followed the guidelines of the NCR, i and many other debt counsellors brought this to the attention of the National Credit Regulator and requested guidance on the way forward.

CONClUSION“as early as January 2009 the Law Clinic of the university of Pretoria was commissioned by the National Credit Regulator to conduct an assessment on the reasons for the ineffectiveness of the debt counselling process. the research report indicated that credit providers are not co-operating in the process and not complying with the NCa and Regulations and the so-called work stream agreement reached between major credit providers, established debt counsellors and the National Credit Regulator, were the main reason for the ineffectiveness of the debt counselling process. Second on the list of so-called obstacles were the vagueness and insufficiency of the NCa and Regulations.” 8

it is my submission that the situation has grown worse and has not improved as the industry has moved even further away from the provisions of the act. Please note that the Credit industry forum (Cif) is not a court of law and only acts as advisory committee with no jurisdiction on the adjudication of the interpretation and application of law.

Please note in terms of Section 16(1) “the National Credit Regulator is responsible to increase knowledge of the nature and dynamics with regard to the consumer credit market and industry; and to promote public awareness of consumer credit by (b) providing guidance to the credit market and industry by

i) issuing explanatory notices outlining its procedures, or its non-binding opinion about the interpretation of any provision of this act.ii) applying to a court for a declaratory order on the interpretation or application of any provisions of this act.

the National Credit Regulator has issued many “guidelines/Circulars” over the past eight years and it is my submission that guidelines which had no relevance to any provisions of the act are unlawful.

TO RESOlvE ThIS SERIOUS SITUaTIONTO INvESTIGaTE aND aDDRESS NCRDebthelp PROGRaMNational Consumer tribunal applications are based upon section 86(7)(b) when a consumer

8 the debt counselling process – closing the loopholes in the National Credit act, 34 of 2005 by m Roesstoff, f Haupt, H Coetzee, m Erasmus

is confirmed not to be over indebted but experiencing financial problems. it seems that this process is now being abused by some debt counsellors who choose to refer all their applications to the tribunal instead to the magistrate Court when a consumer is actually over indebted. this scenario allows for negotiations which cannot be to the benefit of the consumer when they under advice of their debt counsellor agree to “concession periods”. instead of bringing relief to the consumer these proposal may lead to a consumer who cannot satisfy his obligations. NCRdebthelp should also be reprogrammed to include the correct status updates regarding consumers with consent orders to distinguish between consumers who are only experience financial problems, from consumers who are declared to be over indebted.

REQUEST TO REvIEw aND wIThDRaw FOllOwING GUIDElINES :-Based on the above information and facts stated i respectfully request the following “Guidelines/Circulars” to be withdrawn with immediate effect as it poses a serious threat to the general public and all debt counsellors.

Task Team agreements – reasons being :-

1) Proposals are incorrectly based on recalculations instead of rearrangements.

2) Proposals are based on the Capital Balance instead of the total Balance outstanding and contravening Regulation 24(1)(iv).

3) interest and fees are calculated without any provision of the act allowing such calculations.

4) key futures of these guidelines constitute agreements which reduce the contractual interest rates and fees which are in contravention of S86(7)(c) of the act. When agreements are made which create an alteration or amendment of the agreement it must be done in terms of S116 and not S86(7) and S87 which do not make provision for any amendments but only re-arrangements. it is my submission that debt counsellors are set up for failure when these proposals are challenged by creditors in higher courts.

5) Proposals including cascades where monthly instalments escalate to much more than the original contractual instalment which is a contravention of S86(7)(c)(ii)(aa) which specifically state that when a consumer is over indebted each payment must be reduced.

it is my submission that task team agreements do not uphold S3 of the NCa to be transparent or providing mechanisms for resolving over- indebtedness on the principle of satisfaction by the consumer of all responsible financial obligations. instead it allows creditors perpetual credit. i quote the terms and conditions of such an “agreement” which forms the basis of these concept orders:-“the above re-arrangement proposal will only be effective for the concession period. the number of instalments and the instalment amount may not lead to the eventual satisfaction of the outstanding balance. any outstanding balance remaining after the expiration of the concession

term must be recorded in accordance with and in the terms and conditions as contained in the original agreement. accordingly once the concession term has ended, the above re-arrangement will come to end and the instalments and interest rate as contained in the original agreement will be enforced.”

How can the above be viewed to uphold the law when a consumer is over indebted? this is grossly in contravention of the act; and parties agreeing to these agreements should take note of Section 157 of the NCa that state “it is an offence to hinder, oppose, obstruct or unduly influence any person who is exercising a power or performing a duty delegated, conferred or imposed on that person by this act”

Circular 04 – Proposed Process for End Balance Differences

“if the discrepancies between credit providers and debt counsellors/Pda balances are less than the sum of 3 months instalments, consumers will continue to pay these in accordance with the final proposal/court order until the balance, as reflected on the credit providers statement are paid in full”i can only ask how this can be lawful. it is a violation of the act terms of S2(1) and S3 which clearly state that credit at all times must be transparent. it is a violation of S66 as the consumer is penalised and also allow changes of the contractual agreement. if debt review is done as per the provisions of the act there will be no end balances.

Guideline 004/2015 Guidance and Explanation notes for the interpretation and application of Section 103(5) of the National Credit act 34 of 2005 issued in terms of Section 16(1)(b) of the National Credit act 34 of 2005

these guidelines are wrong and confusing; and do not reflect how the rule actually operates. What is more concerning is that the Supreme Court of appeal already confirmed the declaration made by the declaratory order as to how this provision should be applied. it is also my submission that the National Credit Regulator did understood it correctly and in September 2011/ issue 2 confirmed the correct guidance to the interpretation of this provision in the “Communique on SCa Judgments”

Yet again the NCR find the interpretation to be unclear because: “the application and interpretation of section 103 (5) of the National Credit act (“the act”) is held in abeyance pending urgent guidelines by the CIF and on the agenda for the next meeting.” the mere fact that the interpretation has once again been referred for guidance one year after issuing the above guideline is proof that there is a very big problem with this guideline and the NCR is aware of it.it is very concerning that the NCR fail to take note of guidance from legal professionals like Professor michelle kelly-Louw who has provided us with a 24 page legal opinion: “the Statutory in duplum Rule as indirect debt Relief mechanism”.

Circular 6 2016 regarding jurisdiction and fees

the latest Circular 6 on debt Review fees is supposedly only binding on North gauteng but the guidelines to Court documents based on the Van der Hoven declaratory delivered in the same court is binding on all debt counsellors in all magistrate courts. this is a contradiction to each other. this is untenable and confusing. Even though we have case law in appeal Court Judgment Barnard/Coetzee vs mfC /fNB Case a801/2014 the NCR continue to instruct debt counsellors to “comply” with the debt Review fee guideline. this is yet another example of the NCR stumbling from one crisis to the next one. to suggest that “all” debt counsellors should abide by the fee guidelines especially those debt counsellors in gauteng is a direct contravention of Judge tuchten’s ruling.

to revise all guidelines and Circulars and to withdraw guideline or explanatory notice that has no relevance to any provision of NCa

REQUEST TO aPPlY FOR a DEClaRaTORY ORDER:-as resolution i urge the National Credit Regulator on the basis of the Barnard/Coetzee Judgment to apply for a Declaratory Order in terms of Section 16(1)(b)(ii) for the correct interpretation and application of

Regulation 24(1)(iv) read with Section 86(7)(c) confirming the correct application and procedures when drafting a rearrangement proposal for a consumer who has been found to be over indebted. Ensuring that no consumer will be dealt with unlawfully in the future. We also need clarity on how to deal with orders of the past eight years that were made to the detriment of the consumers.

the correct interpretation for Section 88(1). does the term “charges” also include interest and if not on what should the calculation for interest be based as the act currently do not allow for any interest calculations when preparing a debt review proposal.Because the act does not require from a debt counsellor to verify interest rates on a Credit facility the Prescribed Rate of interest act (act 55 of 1975) may be considered where the rate of interest is not prescribed by any other law should a court determine that interest may run under a debt review re-arrangementit is my humble submission that the National Credit Regulator can provide guidance by applying to court for a declaratory order in terms of S16(b)(ii)

Section 15(a) read with S139 and S140 to ensure that all parties involved when raising a dispute or complaint with the NCR understand that the NCR may not adjudicate or intervene in any disputes. Currently complaints are not dealt with in accordance with S140 of the act and this prohibits us from resolving and preventing future complaints.

take necessary steps to legalise debt Review fees or abstain from enforcing guidelines on debt counsellors that has been viewed in court to be unlawful. the correct procedure will be for the minister of trade and industry to publish it as part of the Regulations.

the above concerns and problems are snowballing into a disaster for our economy. the current

sosio economic milieu of South africa demand clarity on the issues as set out above to prevent a disaster. thousands of consumers who are over indebted who desperately need the relief intended by the act refrain from applying for debt review because it is common knowledge that the industry is under pressure and fail to provide the relief it should.

the debt counselling process was implemented 9 years ago, and it is hard to believe that the industry is still in turmoil. it is our humble submission that the NCR has fallen short of their mandate of being a true “regulator” in the true sense of the word.

Yours faithfullymichelle BarnardtRegistered debt CounsellorNCRdC94

on behalf of Concerned Debt Counsellors

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tel: 086 111 6197fax: 021 425 6292

info@creditmatters.co.za

National Debt advisorsFighting For Consumer Justice

Tel: 021 007 1688 www.nationaldebtadvisors.co.za

tel: 0861 123 644Email: info@debtrescue.co.za

Credit MattersSouth africa’s Leading

debt Counsellors14th floor, the Pinnacle

Cnr Strand & Burg StCape town

tel: 086 111 6197fax: 021 425 6292

info@creditmatters.co.za

NoRtH WESt

National Debt advisorsFighting For Consumer Justice

Tel: 021 007 1688 www.nationaldebtadvisors.co.za

tel: 0861 123 644Email: info@debtrescue.co.za

Credit MattersSouth africa’s Leading

debt Counsellors14th floor, the Pinnacle

Cnr Strand & Burg StCape town

tel: 086 111 6197fax: 021 425 6292

info@creditmatters.co.za

NoRtHERN CaPE

Credit MattersSouth africa’s Leading

debt Counsellors14th floor, the Pinnacle

Cnr Strand & Burg StCape town

tel: 086 111 6197fax: 021 425 6292

info@creditmatters.co.za

National Debt advisorsFighting For Consumer Justice

Tel: 021 007 1688 www.nationaldebtadvisors.co.za

tel: 0861 123 644Email: info@debtrescue.co.za

Credit MattersSouth africa’s Leading

debt Counsellors14th floor, the Pinnacle

Cnr Strand & Burg StCape town

tel: 086 111 6197fax: 021 425 6292

info@creditmatters.co.za

EaStERN CaPE

Debt Counselling Group Saaffordable assistance with offices across

the EaStERN CaPE.Casper francois le grange

NCRdC 1560 / CaLL: 086 100 1047offices:

East london: Shop 7, New Colonnade Building, devereux av, Vincent

Port Elizabeth: Room 302, Pier 14, 444 goven mbeki av, North End

Queenstown: office 107, Nedbank Building, 89 Cathcart Road

king williams Town: office 4, 49 Eales Street

E-mail: help@dcgsa.co.zawww.dcgsa.co.za

www.facebook.com/dcg.southafrica

National Debt advisorsFighting For Consumer Justice

Tel: 021 007 1688 www.nationaldebtadvisors.co.za

tel: 0861 123 644Email: info@debtrescue.co.za

Credit MattersSouth africa’s Leading

debt Counsellors14th floor, the Pinnacle

Cnr Strand & Burg StCape town

tel: 086 111 6197fax: 021 425 6292

info@creditmatters.co.za

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WEStERN CaPE

CONSOlIDEBTHeidie knorr NCRdC209

Paarl, Worcester, Wellington, Ceres, Piketberg, Clanwilliam, Vredendaltel: 021 863 2754 / 082 380 4401

consolidebt@vodamail.co.za

Encouraging Freedom, Creating WealthEtienne Pieterse (NCRdC 2210)

tel. (021) 826-2699etienne@financialfreedomsolutions.co.za

www.financialfreedomsolutions.co.za

National Debt advisorsFighting For Consumer Justice

Tel: 021 007 1688 www.nationaldebtadvisors.co.za

Credit MattersSouth africa’s Leading

debt Counsellors14th floor, the Pinnacle

Cnr Strand & Burg StCape town

tel: 086 111 6197fax: 021 425 6292

info@creditmatters.co.za

ISISEkO DEBT hElPget Your Life back on track

tEL: 087 230 0223faX: 086 551 1649

EmaiL: makanti@isiseko.co.zaWEB: www.isiseko.co.za

DEBT REvIEw aND SUPPORT CENTRE

annienne Nel NCRdC2452kairo’s House, 22 fairfield Southstreet, Parow, 7550

office: 021 930 5791Cell: 082 641 2328fax: 086 563 3264

e-mail: info@debtcentre.co.zawww.debtcentre.co.za

all Debt Solutionsfast tracking your financial freedomtel: 0861 255 3328 / 021-557 9981

Email: info@allds.co.zawww.alldebtsolutions.co.zahttps://www.facebook.com/

alldebtsolutions

NCRdC1142 No 2 golden isle Building

281 durban Road, oakdale,Bellville, 7535

tel: 086 111 3749Email: help@zerodebt.co.za

www.zerodebt.co.za

Debt Budgetone monthly Payment for all Your debt

Bruce Leslie BorezNCRdC1643

52 Church Street, “NBS Building”,Wynberg

tel: 021 824 8885www.debtbudget.co.za

Credit MattersSouth africa’s Leading

debt Counsellors14th floor, the Pinnacle

Cnr Strand & Burg StCape town

tel: 086 111 6197fax: 021 425 6292

info@creditmatters.co.za

CONSUMeR

& Solution CentreNCRDC2452

WEStERN CaPE

tel: 0861 123 644Email: info@debtrescue.co.za

don’t be a twit

http://twitter.com/Debtfree_DIGI

SuPPoRt SERViCES

lana Van Herwaarde,dC operation Centre (PtY)

tel: 0867227405 Email: info@dcoperations.co.zawww.dcoperations.co.za

DEBT086 126 6562

debt@one.za.com www.one.za.com

Detect ID Theft or possible ID Fraud

info@akanisolutions.co.zawww.akanisolutions.co.za

Akani SolutionsInformation Data Solutions

Credit Report App

ID Protector

Access Your Credit Bureau Report Instantly on Your Phone

DCs help your clients use it during application & to protect their ID

Subscribers notified by SMS when number is activated

fiNaNCiaL PLaNNiNg

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ComiNg SooN

LEgaL

liddles & associates“it always seems impossible until it

is done” N. mandela(t) 021 930 5790(f) 0866070940

(E) frontdesk@liddles.co.zawww.liddles.co.za

RM Brown and associates 16th floor, the Pinnacle

Cnr Strand & Burg StCape town

tel: 021 202 1111, f: 021 425 0875 Email: roger@rmbrown.co.za

Steyn Coetzee attorneys / Prokureurs

adri de Bruyn11 market Street / markstraat 11,

Paarl, 7646tel: 021 872 1968fax: 021 872 2678

adri@steyncoetzee.co.za

CREdit BuREauSComiNg SooN

kim armfieldAttorney & Family Law Mediator Address: Unit 1B, FinansHuis, 7

Voortrekker Road, BellvilleTel: 021 949 1758 / 021 945 2526

Office cell: 084 8588 284kim@legalwc.co.za

Your Debt Counselling attorneys

Johannesburg | Cape Town

Andre Van Zyl021 494 4862

info@bassonvanzyl.com

www.bassonvanzyl.com

PaYmENt diStRiButioN agENCiES

DC Partner044 873 4530

hyphen PDa011 303 0060

NPDa0861 628 628

NPDa0861 628 628

Telephone: 031 251 4150

GENERal CONTaCT DETaIlS (FIRST POINT OF Call)*

17.1‘s, 17 .2’s, 17.3’s, Rejections and 17 .W’s, Change or transfer of debt Counsellor

nca@consumerfriend.co.za

Proposals / Revised Proposals / Consents / Related Queries

proposal@consumerfriend.co.za

Notice of Service / Court applications court@consumerfriend.co.zaupdated Balances / Settlements / general Queries queries@consumerfriend.co.zaSection 86(10) Letters and all Related Queries terminations@consumerfriend.co.za

ESCElaTION CONTaCT DETaIlS*

Complaints / Service delivery / management ryan@consumerfriend.co.zajustin@consumerfriend.co.za

17.1‘s, 17 .2’s, 17.3’s, Rejections and 17 .W’s, Change or transfer of debt Counsellor

charlene@consumerfriend.co.za

Proposals / Revised Proposals / Consents / Related Queries

charlene@consumerfriend.co.za

Notice of Service / Court applications roderick@consumerfriend.co.zaupdated Balances / Settlements / general Queries diane@consumerfriend.co.za

*Please do not CC multiple email addresses.

Fax: 031 251 4252

CAPITEC CONTACT DETAILS

form 17’s ccsforms17@capitecbank.co.zaProposals ccsproposals@capitecbank.co.zaCourt documents ccsdebtrevieworders@capitecbank.co.zageneral Queries ccsdebtreviewqueries@capitecbank.co.zaRefund Requests / Cancellation of debit orders

ccsrefundrequests@capitecbank.co.za

Complaints Complaintmanagement@capitecbank.co.zainsurance Certificates coming soonSharecall Contact Number 086 066 7783 - Select option 2

ESCALATION PROCESSComiNg SooN

Debt Review DepartmentEmail Address Turnaround Time

Contact Details Standard Bank Debt Review

Debt Review Call Center: 0861 111 525 or 0861 111 402

Debt Review Documents*: DRApplications@standardbank.co.za

Debt Review Service requests: debtreviewservices@standardbank.co.za 5 days

Debt Review payment queries: DRPayments@standardbank.co.za 7 days

Debt Review administrative requests**: DebtReviewAdmin@standardbank.co.za 5 days

Debt Review complaints and escalations: debtreviewcomplaints@standardbank.co.za 5 days

Reckless Lending Allegations recklesslendingallegations@standardbank.co.za

*Debt Review documents: Form 17.1; Form 17.2; Proposals; Court Applications; Court Orders

**Debt Review Admin related requests: debit order cancellations; statement requests ; refunds; paid up

letters; account closure instructions; settlement balances; or outstanding balances

Other Standard Bank areas

Credit Card 086120 1000

Diners Club 0113588400 / 0860346377

Vehicle Asset Finance Recoveries 0861102347

Vehicle Asset Finance Collections 0861102347

home Loans Pre Legal 0860102270

home Loans Customer Service 0860123001

Standard Bank Insurance 0860123911

Deceased Estates 0861001868

ABSA TASK SPECIFIC DEBT REVIEW ENTRY POINTS

ABSA TASK SPECIFIC DEBT REVIEW ENTRY POINTS

Form 17.1 DRCOB@absa.co.za

Debit Order Cancellations Debitordercancellations@absa.co.za

Proposals DRProposals@absa.co.za

Exits from Debt Review 17.4@absa.co.za

All Court Documents Courtapp@absa.co.za

DC Switches DCTransfere@absa.co.za

Termination Queries DRTerminations@absa.co.za

Queries debtreviewqueries@absa.co.za

Escalated Queries debtreviewmanager@absa.co.za

Call Centre 0861 222 272

FIRST POINT OF CONTACT VIA THE FOLLOWING MEANS:Call Centre: 087 730 1166

Email: FRBDebtReviewCentre@firstrand.co.za Fax: 086 011 7532

FIRST ESCALATION – AFTER 48 HOURS:Onboarding - New applications and Certificates of Balance:

Kagiso Tlhoaele – KTlhoaele@fnb.co.zaDocument Management – Sorting & Uploading, Indexing, campaigns

Zanobia Phillips – Zanobia.Phillips@fnb.co.zaQueries: Charlene Antoni – CAntoni@fnb.co.za

Call Centre: Charlene Antoni – CAntoni@fnb.co.zaTerminations, Re-instatements and Missing Payments:

Zanele Masilela –MasilelaZ@fnb.co.zaPro-Rata Proposals: Pamella Sithole – Pamella.Sithole@fnb.co.za

DCRS and Final Proposals: Sabelo Mkabela – SMkabela@fnb.co.zaNotices of Set Down/Instructions: Abraham Booysen - BooysenA@fnb.co.za

Court Orders/Reviews: Joyce Machethe - JMachethe@fnb.co.za

SECOND ESCALATION – AFTER 72 HOURS:New applications, Certificate of Balance, Queries and Call Centre:

Karen van Musschenbroek – KVanMusschenbroek@fnb.co.zaWithdrawals, Terminations,Re-instatements and Missing Payments:

Faadiel Toffie – FToffie@fnb.co.zaProposals, Notices and Court Orders:

Karen van Musschenbroek – KVanMusschenbroek@fnb.co.za

THIRD ESCALATION:Athaly Khan – AKhan5@fnb.co.za

FNB Debt Review Centre Escalation Process

DC Query Process

www.nedbank.co.za

DC Query Process

AFRICAN BANK CONTACT DETAILS 011 256 9323

DebtCounselling@africanbank.co.za

ESCALATION PROCESS

COMING SOON