
Communication is Key in the Debt Review process
June 8, 2023
Standard Bank Updates
June 19, 20238th of June 2023
DCASA, NDCA and the NCR met on the 8th of June 2023, for our second quarterly meeting, with Lebogang Mosupye chairing the meeting. In attendance were also the legal manager and the complaints department.
Unfortunately, we were not able to meet with the registration renewal department at this meeting; however, we have asked for a meeting to inquire about the steps and process of the upcoming renewals. We will send a communication once we have had our meeting.
Insofar as the DHS status code is concerned, the NCR was pleased to announce that the testing for the enhancement has been completed and the development team is happy with the enhancements. Just as a refresher, at our previous meeting, it was mentioned that the current guidelines will remain as is, and their legal position remains unchanged on how a consumer can withdraw. In the event that we want to challenge the NCR’s current position, it needs to be opposed via a declaratory order.
However, they are in the process of streamlining the process of requesting updates from the NCR via DHS, and the past few months they have been enhancing DHS to allow changes to be requested via DHS and not email. The DC Administrator will receive a message to review the documents that are attached and then proceed with the approval.
The NCR has now requested approval from Exco to publish a communication on the enhancements to DHS; the turnaround time for implementation will be included in this email.
At our previous meeting, we discussed unreasonable transfer requests that we, as an industry, identified from certain debt counsellors (mainly employed by certain companies). We sent through the names and examples. The NCR confirmed that they have identified a few debt counsellors and, together with management, have commenced an investigation.
We are also elated to hear that the NCR did have a meeting with Capitec with regards to the Youtube ad that circled around on social media that contained inaccurate debt review facts and placed debt review in a bad light. The NCR insisted that their ads be more balanced and accurate in the future. The NCR confirmed that they have retracted their advertisement; if we do, however, see it, we need to inform them.
Lebo also mentioned that we can expect to resume with CIF soon; dates will be sent in due course. Our next meeting will be in September.
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8th of March 2023
- DC certificate renewals.
The NCR representative has confirmed that given previous years failure to timeously issue renewal certificates. They will be sending out the invoices earlier this year and prepare the certificates in advance. Once payment has been made and received it, will be sent out. DCASA will assist their members with collecting and posting certificates, if need be.
We have asked that the certificates be made available via DHS which will take time to implement if approved and secondly to remove the Debt Counsellors Identity Number. We await the NCR’s feedback on same.
- Restoring functionality back to DHS.
NDCA sent a legal correspondence to the NCR enquiring on all the DHS functionality disablements that were made early 2022, without consultation. The NCR responded in a formal correspondence and mentioned that they remain committed to their legal interpretation of the Act and the amendments to the DHS functionality, with regards to the cooling off period. Once a Form 16 has been signed the person remains under debt review, pending the outcome.
In addition the NCR’s position to disable the functionality to updtae status code B, G, G1, I and J by debt counsellor remains.
However they wish to bring it to our attention that they will be automating the process, so that Debt Counsellors can update the status code directly via DHS, with enhanced security measures (in other words the status update still needs to be approved by the NCR, via debt help) The approval will only be done via DHS and not via email.
The automation is in it’s advanced stage, however as they are still in testing phase. We do not have a date when it will go live.
The NCR wanted to emphasize that they had to take these steps as a result of all the rogue DC’s in the Industry. Saying that, they have identified a few DC’s abusing the process and are investigating them.
DCASA remains of the opinion that the functionality should be returned to DC’s and rogue DC’s be targeted seperately. And that the “cooling off period” should be taken into account.
- Transfers
The Associations once again brought it to the NCR’s attention that “high profile” Debt Counselling Companies are still promising existing Debt Review Client’s to either remove them or provide them with a better deal. They then request copious amounts of transfers from the Debt Counsellors.
We have given through all the NCRDC numbers related to these entities and will be following up with the NCR on the investigations.
- Capitec Video
If you have not yet seen the following video, go and have a look https://www.youtube.com/watch?v=hNWUfelGap8&t=1s DCASA has raised the video with NCR, with the hope that as they are the Regulator and the custodian of debt review that they would have approached Capitec to withdraw this video from all social media platforms.
Not only is this video in bad taste towards the legislative process that has been implemented by the DTI and has been the most successful collection mechanism within South Africa, the factual content thereof is incorrect.
- By prefacing that debt review is in line with the “Forex-thing”. Immediately places debt review in a negative light.
- By advising the Consumer’s that they “must speak to their bank first” if they are in financial trouble is not a requirement.
- They raise that a consumer can easily pay “R9500” or more for debt counselling fees, which gives a consumer the wrong perception. By referring to the highest amount possible, it makes a consumer ignorant to the factual information of what is required to pay and how debt review incorporates the fees into the payments. In addition, the consumer would immediately think that they cannot even afford to apply for debt review if that is the fees.
- They state that debt counsellors informs the consumer that “you can still use your credit”, however that they fail to inform the consumer “that you can’t use your existing credit” that statement does not even make sense.
- They inform the consumers that they are bound to the process, however rarely has it been advertised that a consumer can exit easily. Capitec is referring to the rogue DC’s, which has the effect of generalizing the entire industry in a negative light.
- Capitec then goes on to state that “if things go wrong, you cannot be able to get credit for “10 years” once again generalizing and focusing on the most extreme and negative side. Which any industry may experience.
- Then they proceed with incorrect facts ( ironically they keep on reminding consumer’s to educate themselves) by stating that you can only exit debt review by “paying up all your debts”. Consumers will think that means a home loan as well. And to give more incorrect information they state “or by going to court” as we know that cannot be generalised as we need to look into the consumer’s status and financial standing. The incorrect facts given in this video, whilst advising consumers to educate themselves is contradictory.
The Industry has referred copious amounts of consumers to Capitec to open new bank accounts when entering debt review, we believe that Capitec was one of the Credit Providers whom has truly benefited from Debt Review over these past years. DCASA will attempt to arrange a meeting with BASA and other industry stakeholders.
- Credit Bureau’s additional requirements
We have noted that Experian seeks additional information from a Debt Counsellors prior to clearing a consumer, in contrast to the Act and Circular 002/2022. The NCR will provide us with the Credit Bureau Complaints department details to send in an enquiry.
And finally it was noted that they are in the process of compiling an NCR escalation contact list to assist all in lodging complaints and enquiries to the correct department.