
NCR VS MUNSAMY
March 22, 2023
Have you heard of the new POPIA updates required for your business?
April 11, 2023The first impression of Debt Counselling is that it is all about the figures, in what can be interpreted as a very clinical process. It is about putting realistic proposals forward that make financial sense to both credit providers and consumers and then of course to be approved by a court application, which is also an intimidating and frightening process for most consumers.
I am a medium sized Debt Counselling firm, in practice for 15 years. The large majority of my consumers that approach me lives within a 70 km radius of my office. I inform them that I only consult in my office. Since most of them are word of mouth referrals, from satisfied consumers, they understand the reason behind this.
These consumers’ arrive displaying a multitude of emotions including anger, apprehension, depression, fear, reservation, suspicion, despondency, this list is endless, it is a very emotional experience for them
We as debt counsellors should strive to create a quiet environment for them, one without disruptions to interview the consumers. To summarise the steps that I take next is as follows:
- We proceed to positively identify the consumer.
- The credit record is drawn to assist with the evaluation.
- The process is explained at great length. Which also contains the Form 16 to ensure compliance.
- Disadvantages and advantages are always disclosed.
- The fee structure is explained and the consumer acknowledges receipt of this.
- The exit process is similarly explained in great depth.
- The responsibilities and expectations are addressed, and
- The consumer is informed of all aspects during this discovery session.
Every aspect of the application is dealt with in great detail as prescribed in the Act. As you can see above, the interaction appears, on the surface to be very clinical. During this interaction all the “I have heard” and “I have seen this video online” questions are addressed and the consumer becomes visibly more engaged, comfortable and most importantly more knowledgeable. A relationship is starting to form as he/she asks questions that are relevant to their particular circumstances. During this interaction they realise that there is no “one size fits all solution” and that each case should be dealt with in accordance with the position the consumer finds him/herself in.
We have a responsibility to do more than just what is set out in the act, regulations and guidelines and task team, we are in fact to an extent called “Counsellors”
We have to take into account that behind the application on the desk is a person, a couple or a family experiencing one of the most stressful times possible. Financial stress, caused by over indebtedness is one of the top reasons why couples get divorced. It is also proven that a person who are bearing a heavy burden of over-indebtedness is 3 times likely to commit suicide or contract a chronic illness. These are very scary statistics.
As such the financial situation may be as a result of or has resulted in one or many life changing events. They are stressed to breaking point. They suffer from a degree of PTSD and they often act out of character.
In many cases they will inform you that this is the first personal interaction they have had regarding their finances, in years. Credit providers, across the board do not give them the opportunity for personal interaction. They are referred to call centres or online platforms. They feel that they are the product of these institutions but are only contacted when things don’t go according to plan.
Despite common belief that business is to be conducted online, or remotely, the consumers still crave for personal contact and interaction in a time of crises. It is also mentioned that the financial offerings are becoming more sophisticated in a market that is not necessarily so. We as DC’s fill this role to a large degree. They are more open when there is someone that will just listen. We build a relationship with our clients.
By entering into the debt counselling sphere, they undergo another life changing event that will reduce their stress score. The Holmes and Rahe Stress score applies here. Many of our clients have an initial score of well over 300. We can’t reduce the score significantly but once the financial stress is addressed, a number of the stress triggers may be addressed, lowering the overall score. The relationship within the marriage may improve, resulting in less aggressive behaviour. The dependency on coping mechanisms may reduce, resulting on less money being spent on gambling and alcohol. A consumer that takes part in a transparent process that is an aide for him to function with a degree of normality is receptive and cooperating. They embrace it and the end result.
I came to the realisation, many years ago that we cannot assume what clients know and don’t know. Most clients don’t know what they don’t know. They also don’t know where to turn to become more educated in this field. They used to google everything in the past, soon to realise that google is full of misinformation or misleading content. We must during this stressful time, also educate our consumer. During the process we tend to treat the symptoms. If we address the cause too, a reoccurrence is less likely. Once the form 19 is issued, he/she will be more informed. They will be in a position to make sound financial choices, ultimately a better consumer and client to the credit provider in the long run. A consumer that is informed, financially aware and confident is an asset to the economy as a whole. In my situation, I interact regularly, on a personal level to achieve this goal. – Kevin Russell 9 Living Debt Free)