Your debt counselling complaints may now be resolved within two or three months because the office of the credit ombud has recently expanded its jurisdiction to hear such complaints.
The move is part of an industry strategy to free up resources at the office of the National Credit Regulator (NCR), which will focus on regulating the industry.
A task team appointed by the NCR in 2009 to investigate bottlenecks in the debt counselling process recommended that an industry ombudsman was required.
The NCR is responsible for the regulation of about 4 300 credit providers (from banks to microlenders), 11 credit bureaus and nearly 2 000 registered debt counsellors.
The credit ombud was initially set up to hear complaints related to credit bureaus, and at the beginning of 2010 he started dealing with disputes related to non-bank credit transactions such as furniture hire-purchase agreements.
The ombud, Manie van Schalkwyk, says his office is evolving to meet the changing demands of the credit industry environment. “We realise that this is a huge undertaking and believe that we have sufficient resources to deal with complaints quickly and efficiently and are up to the challenge. All the major stakeholders in the credit industry are fully supportive of this expanded jurisdiction,” he says.
The average turnaround time for a complaint to be resolved at the credit ombud’s office is currently between 40 and 50 days.
Van Schalkwyk says that in the past consumers had to employ legal services to resolve their non-bank credit disputes because there were no alternatives available to them. “The cost of pursuing the legal route is exorbitant and consumers were left ‘in the cold’. However, with the expansion of its jurisdiction, the credit ombud can assist consumers who feel that they have been unfairly treated or that their rights provided for in the National Credit Act have been disregarded,” he says.
Debt counselling was introduced under the National Credit Act in June 2007 as a mechanism to assist over-indebted consumers alleviate their debt by reviewing and realigning their income and expenses.
If your expenses exceed your income or you find you are having difficulty meeting all your expenses – for example, skipping particular debt repayments in order to meet others – you can contact a debt counsellor for help.
The debt counsellor will require full details of your income, expenses and your budget. If you are found to be over-indebted, the counsellor will inform all your creditors that you have applied for debt counselling. The counsellor will then draw up a revised repayment arrangement so that you are still able to meet your living expenses such as paying for groceries and school fees. This repayment arrangement must be agreed to by all your creditors. If one or more creditors do not agree to the arrangement, your counsellor will have to apply to a magistrate’s court for a court order.
Once you have applied for debt counselling, your creditors cannot take legal action against you, but you will not be allowed access to any further credit. This means, for example, you will not be able to get a mortgage bond for a house or buy a car on hire purchase until you have cleared all the debt related to your debt counselling order.
If you feel that you have been adversely treated during the debt counselling process, you must first try to resolve the complaint with your debt counsellor. If you are unable to resolve the problem, the next step is to lodge a complaint with one of the debt counselling industry associations: the National Debt Mediation Association, Debt Counsellors Association of South Africa and Payment Distribution Association of South Africa.
If your complaint is not resolved within 20 working days, you can then take it to the credit ombud. If the ombud cannot resolve it, you can then go to the NCR.
Van Schalkwyk says typical complaints include consumers receiving letters of demand from their credit providers while making regular debt repayments and consumers who are not kept informed of the status of their debt-counselling case.
DEDT-STRESSED CONSUMERS ON THE RISE IN SA
Statistics for the quarter ended December 2010 show a slight increase in the number of people with poor credit records.
According to the Credit Bureau Monitor, which is compiled by the National Credit Regulator, of a total 18.5 million credit-active consumers, 46.5 percent had impaired credit records: 17.8 percent were three months or more in arrears with their debt repayments, 14.6 percent had adverse credit bureau listings and 14.1 percent had judgments and administration orders against them.
The number of inquiries made on consumers’ credit records decreased by 6.9 percent from September 2010 to December 2010. Most inquiries (almost 96 million) were made by banks and other financial institutions.
During the quarter to December 2010, nearly 23 million credit record inquiries were made for tracing or debt collection purposes.
WHERE TO GO IF YOU HAVE BEEN TREATED UNFAIRLY
Credit Ombud
The Credit Ombud’s office can hear the following complaints:
* If you have been adversely, incorrectly or unfairly listed at a credit bureau;
* If you feel that you have been negatively affected by a credit provider’s conduct during the course of a non-bank credit agreement.
* All complaints related to debt counselling; and
* Complaints related to non-bank credit such as hire-purchase agreements on furniture.
National Credit Regulator
The National Credit Regulator’s office handles the following:
* Complaints related to bank credit;
* Debt-counselling complaints that not been resolved by your debt counsellor, debt counselling industry associations or the credit ombudsman;
* Payment distribution agencies not distributing to creditors money that has been paid to them;
* Creditors who claim to have not received payment rearrangement proposals from debt counsellors;
* Creditors taking legal action while you are under debt review;
* Debt counsellors who are overcharging for their services;
* Debt counsellors who cannot be contacted or who have “disappeared”;
* Creditors charging excessive interest;
* Disputes over credit agreement settlement figures;
* Creditors overcharging on initiation, credit insurance and/or service fees;
* Illegal debt-collection methods;
* Creditors refusing to issue statements on demand;
* Creditors not providing you with a copy of your contract;
* Reckless lending, where no affordability assessment was carried out;
* Credit providers not observing any cooling-off period and refusing to cancel a contract; and
* Complaints related to holiday clubs or timeshare schemes.
Contact details
Credit Ombud, Manie van Schalkwyk
Call centre: 0861 662 837
Telephone: 011 781 6431
Fax: 086 675 6217
Post: Postnet Suite 444, Private Bag 1, Jukskei Park, 2153
Email: [email protected]
Website: www.creditombud.org.za
National Credit Regulator
Sharecall: 0860 627 627
Telephone: 011 554 2600
Website: www.ncr.org.za
National Debt Mediation Association
Telephone: 0861 116362 or 011 781 0589
Debt Counsellors Association of South Africa
Telephone: 0861 432 272
Email: [email protected] or [email protected]
Email complaints to: [email protected]
Payment Distribution Association of South Africa
Telephone: 012 674 1055