If you are unhappy and need to complain then remember that you can complain to the Credit Ombud if you have a dispute with a credit bureau, a Debt Counsellor (DC) or a credit provider but not if the credit provider is a bank (unless you are under debt review with a Debt Counsellor in which case the Credit Ombud will hear your complaint). If you have a consumer complaint relating to credit extended to you by a bank this must be taken up with the Ombudsman for Banking Services not the Credit Ombud. An easy mistake to make.

In most cases regardless of whether you are under debt review or not and regardless of if you are complaining about a bank or another credit provider, it would be appropriate to take your complaint to the other party in writing and wait a few days before escalating the matter. The ombud will not consider your matter unless you have taken these steps.

So take that first step. Simply call us directly at 086 111 3749 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

Debt Vader Talks Virtual Arrears

As the Debt Counselling industry evolves, it becomes more and more evident that credit providers treat Debt Re-arrangement Court Orders as inconsequential, even going so far as to ignore the court orders by refusing to update their internal computer systems to reflect the restructured debt as per the Debt Re-arrangement Court Order, and placing themselves intentionally in contempt of a valid and enforceable court order.

Thus the emergence of the “virtual arrears” which are arrears accumulated before the application for Debt Review and during the debt re-arrangement process. It is accepted that when a consumer enters the Debt Review process, any arrears that may have existed on their accounts is capitalised. The consumers are then expected to pay in respect of the Debt Re-arrangement Court Order, a specific amount of money to their Credit Providers, over a specific time and at a specific interest rate, all of which is documented and confirmed in the court order itself.

The unwillingness of the Credit Providers to change their internal computer systems to accommodate the new arrangement reflected on the Court Order, results in a deficit between the original contractual installment and the debt review installment (virtual arrears). This deficit expresses itself as an arrears amount which accumulates during the existence of the Debt Review and upon which the bank charges interest (which they are not entitled to), thus creating debt out of “thin air”.

In the instance where a consumer wishes to withdraw from the Debt Review process, the Credit Providers request a withdrawal form (17.4) issued by a Debt CounsellorD before they will entertain any request by the consumer. Once the withdrawal form has been issued, the consumer no longer enjoys the protection of the NCA and this places them in an unenviable bargaining position.

Some of the banks make ludicrous demands on consumers, they will demand that 50% of this “virtual arrears” be paid upfront, and that the other 50% is to be paid over 6 – 9 months, while the consumer continues to pay the normal contractual installment, thus making it impossible for a consumer to comply with the arrangement or to successfully exit Debt Review. The result being that the consumer could lose their property.

These “virtual arrears” seems to be how the banks calculate which consumer they are going to be harassing into higher installments (paid outside of the Debt Re-arrangement Court Order) or withdrawing from the Debt Review process. This harassment takes the form of constant sms’s, letters threatening the consumer with enforcement action and even premature terminations, or attempts to rescind the Debt Re-arrangement Court Orders. The higher the “virtual arrears” become the more high risk that consumer becomes and the more pressure the banks will place on the consumer, in some instances going so far as to summons consumers.

So take that first step. Simply call us directly at 086 111 3749 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

Well, if you are under debt review a diet (if that’s what you call just eating less) is a great way to cut down on the crazy raising food costs and exercise is a great form of entertainment that can be achieved for minimal costs. Prices are shooting up left, right and center; with fuel costs being a big factor and add to that issues in other parts of the world to do with wheat costs and it is a recipe for a very skinny December after all.

If however we put all that aside for a moment and think about what has been happening in SA with regard to debt review and the debt counselling industry there have been some interesting developments. The NCR have shown their teeth over the Voluntary Debt Mediation Solution (VDMS) which they decided was seemingly an unregulated form of debt review which undermines the statutory process that hundreds of thousands of South Africans are making use of. This issue you can read more about the rise and fall of the VDMS system. More than that you can read about how the NCR have now withheld the carrot they were offering to the NDMA in the form of taking over the job of registering consumers under debt review with the various credit bureaus. It has not been a great month for the NDMA!

We feature articles from the Dark Sith Lord of debt review Debt Vader and legal opinions that will have you giggling but thinking about new ways of looking at things. It is great to see the regulator pushing credit providers to put their money where their mouth is and show increased support for the debt review process. Lets hope they take the advice to heart and that consumers under review will see increased co operation from their creditors. This would be a great weight off their backs …now if only we could get the weight off our bellies we could actually hit the beach.

So keep up the good work and don’t lose momentum now. Start to plan for the end of the year right now and keep taking another step towards being debt free.

So take that first step. Simply call us directly at 086 111 3749 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

Know and Understand Your Rights, Urges the NCR

As part of Consumer Rights Month, the National Credit Regulator (NCR) has urged consumers to be aware of their rights when it comes to credit agreements.

“It is your money and therefore, it is your right as a consumer to have full knowledge of all credit agreements you enter into,” says Education and Communications Manager at the NCR, Cornie Tema.

Internationally, the 15th of March is celebrated as World Consumer Rights Day. In South Africa, March is dubbed the Consumer Rights Month. The National Credit Regulator in conjunction with the Consumer Protection Forum (CPF) is embarking on programmes aimed at educating South African consumers about their rights and obligations.

The CPF comprises of the National Credit Regulator, nine Provincial Consumer Affairs Directorates, the Council for Medical Schemes (CMS), Financial Services Board (FSB), Independent Communications Authority of South Africa (ICASA) to mention a few. The international theme which has been adopted is “our money, our rights: campaigning for real choice in financial services”.

The National Credit Act (NCA) came into effect to level the playing field. Consumers have rights; however, they also have obligations when entering into credit agreements. Obligations such as honouring the terms and conditions of credit agreements they enter into.

“Drawing up a budget to assess whether you will be able to afford the credit you intend taking, comparing deals between credit providers and understanding the terms and conditions of credit agreements are important steps before signing a credit agreement”, says Tema.

He says when taking out credit, consumers should always ask for a pre-agreement statement and quotation which clearly shows the borrowed amount, deposit payable if any is needed, interest charged, period of repayment, date of first installment, date of last installment etc.

“Additional charges such as initiation fees, monthly service fees and credit life insurance should also be stated in the pre-agreement statement and quotation, he adds”.

Under the National Credit Act, consumers have the right to receive information and documents in plain, simple language. “This means that the content, meaning and importance of the documents must be easy to understand.

Consumers also have the right to receive any documents required in terms of the NCA in an official language of the consumer’s choice to the extent that it is reasonable having regard to usage, practicality, expense, regional circumstances and the balance of the needs and preferences of the population ordinarily served by the person required to deliver that document”, adds Tema.

“Do not sign unless you fully understand the content including the terms and conditions of the credit agreement”, adds Tema. “While the National Credit Act provides that every person has the right to apply for credit from any credit provider, it does not prevent credit providers from turning down your application.

“However, if your application is declined, you have the right to be provided with reasons on why it was declined. “Please note that the National Credit Act does not decline credit applications, it is merely an Act of Parliament enforced by the National Credit Regulator”, explains Tema. “The credit provider should provide you with reasons on why they are declining”.

You also have a right to have information held about you treated confidentially. Therefore credit providers may only use information for the purpose which it was given for.

Tema further explains that consumers have the right to access and challenge information held by a credit bureau. “Consumers are entitled to a free copy of their credit report from any of the eleven registered credit bureaux when they request for it. Additional credit reports can be accessed at a nominal fee of R20 excluding VAT.”

“You also have the right to be informed if a credit provider intends to report negative information about you to a credit bureau before the credit provider actually does so. Therefore, it would be of benefit to all consumers to check their credit reports regularly to know what it entails.

By checking your credit reports, you will be able to pick up if there’s any incorrect information on your credit report”, adds Tema. He says one of the most important aspects of the National Credit Act is that it gives consumers the right to get assistance when they are over-indebted.

“If you are experiencing difficulty in servicing your debts, act as soon as possible,” he says. “Don’t wait until you start receiving final demand letters. Speak to your credit providers soonest, preferably before defaulting”, says Tema.

He says the first step is to contact your credit provider to discuss your situation and negotiate an affordable repayment plan. “If you cannot reach an agreement with your credit provider, contact a registered debt counsellor in your area for assistance soonest.”

“Remember, you will not get any further credit whilst under debt counselling. Never skip your payments, even when you are under debt counselling. You should continue making payments, because if you do not pay, you could lose your house or your car”, concludes Tema.

So take that first step. Simply call us directly at 086 111 3749 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

Debt Review – How it works – Part 3

The Payment Distribution Agencies (PDA’s)

The payment distribution agencies are companies that distribute consumers funds for them. You won’t find them mentioned in the NCA at all but the National Credit Regulator thought it would be a good idea. They have encouraged Debt Counsellors to use the services of one of these few companies. They also encourage consumers to do the same.

The PDA’s normally collect one debt review payment from the consumer (who maybe has set up a debit order for this) each month and split the payments up to each of his creditors. They get instructions from the Debt Counsellor on how to split the money up but they don’t let the Debt Counsellor or anyone else touch the money. They then make the payments to the creditors. They send proof of the payments to the creditors. It is important to note that many creditors still cant seem to track when money comes in for some reason. Many of the biggest banks struggle with this simple procedure. So be warned the creditors may call you about payment even if they have received funds.

Many Debt Counsellors spend much of each day trying to help the PDA’s prove to the creditors that payments were made.

Any interest that is earned on money in the bank at the PDA’s is paid over to the National Credit Regulator rather than to the consumers or creditor’s accounts. The Payment Distribution Agencies are then required by the NCR to send consumers a statement of the payments. Not all PDA’s are getting this right. If you are not getting a regular statement monthly from yourPayment Distribution Agency then you can complain to the NDMA about it or to the NCR or the Banking Ombud.

Paying up your debts:

Once one debt is paid off the amount you pay each month will not change (reduce). It stays the same but the amount each creditor that is still left, gets increases a little bit. This happens each time a debt is paid up and soon all or most of your debts will be gone. Most plans for debt review are around 5 years long. % years might seem like a long time but most creditors collect smaller debt over 2 years anyway and the amount you pay over 5 years (or however long your plan will be) will be manageable if you stick to your budget each month.

Once all your debts are gone the Debt Counsellor will issue a thing called a Clearance Certificate. This is sent to the credit bureaus and they will then clear your record of the debt. Therevare still some teething issues with these but the idea is this is a piece of paper that says your debt is paid up. Beware that many Creditors can’t even track regular monthly payments so don’t be surprised if they give you a hard time as to whether your debt with them is paid up.

And that’s a rough idea of what debt review is all about.

So take that first step. Simply call us directly at 086 111 3749 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

Do you have a contract with your PDA?

If you are a debt Counsellor or a consumer who is under debt review you might be making use of a Payment Distribution Agent (PDA).

It is widely known that while PDA’s are not mentioned in the National Credit Act the National Credit Regulator (NCR) want Debt Counsellors to use a PDA.

The question arises: 

If you are making use of a PDA , do you have a contract with them? As a service provider under the Consumer Protection Act there should be a service level agreement or contract in place between both parties (or all 3 parties in the case of a PDA and DC and consumer).

It is true that a DC gives instructions to a PDA on how to distribute funds for a consumer (according to their court order) but it is the consumer who has money at the PDA and should insist on the provision of a contract stipulating what a PDA will do for them.

At present no PDA offers a contract to consumers. Seemingly they do not wish to define what services they offer. This leaves them open to litigation under the CPA. Fortunately all PDAs carry insurance. Consumers should not be shy to sue these bodies should they fail to offer good service, as a lack of contract will play very much in to their favor.

So take that first step. Simply call us directly at 086 111 3749 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

The costs of ignoring Section 129 letters add up

The National Debt Mediation Association (NDMA) says it is concerned that consumers are not aware of the costs of legal action should they delay seeking assistance when they start experiencing difficulties with meeting their monthly debt obligations.

When a Creditor is about to take legal action against a consumer they will send what is called a Section 129 Letter

An analysis of complaints received by the NDMA shows that consumers are still not approaching their credit providers the moment they start experiencing payment difficulties with the consequence that by the time they seek help their case is already in the legal process or a court order is in place. This makes the case difficult and expensive to resolve.

The Section 129 letter urges consumers to head to a debt counsellor to get help as soon as possible.

For the year ending December 2011 in more than 50% of cases that the NDMA received requests for help or complaints dealt with when a credit provider was in the process of executing a court order against a consumer.

Depending on who manages the collection process legal costs incurred can include collection commission interest on outstanding costs, sheriff expenses and correspondence expenses.

“By not acting quickly enough it can cost thousands of rand which the consumer could have used towards settling outstanding debts” says CEO of the NDMA Magauta Mphahlele.

In one case a consumer who owed R5443 in capital and interest ended up with a salary attachment order of R12409. This included R6976 in legal fees that went to the collecting attorneys.

This included 10% collection commission at R1 104

Costs of R3166

R2795 interest on outstanding costs

and R598 for VAT.

It is unclear if this exceeds the Section 103(5) induplum limit or not

Consumers can avoid such costs if they seek assistance early. She explains that this trend draws attention to the possibility that the average South African consumer is either ignorant of their rights and responsibilities or does not trust what action the credit provider will take once they approach them for assistance. “… Consumers are urged to take advantage of the avenues available to seek advice and assistance” adds Mphahlele. She says that many consumers take action a day or two before their houses or vehicles are auctioned or repossessed which is often too late.

With credit agreements that are regulated by the National Credit Act (NCA) the legal process commences with a section 129 notice that credit providers are obliged to issue to a consumer once they are in default for at least 20 business days. If 10 business days elapse without the consumer responding to the credit provider the credit provider is at liberty to take legal action.

“While the section 129 notice might seem like an intimidating document for many consumers it is not necessarily the end of the world if the consumer takes action in respect of the options provided in the letter” says Mphahlele. Once a consumer has received a section 129 letter they have the option to refer that specific credit agreement to a debt counsellor an alternative dispute resolution agent consumer court or Ombud with jurisdiction. The intention is that the credit provider and the consumer resolve any dispute related to the agreement or to bring the payments up to date. This will allow the account to be included into a debt review.

She urges consumers to inform their credit providers as soon as they experience or anticipate that they will experience payment difficulties. Where a section 129 letter has been issued consumers are urged to respond to the letter by contacting the credit provider and informing them how they intend to remedy the default or take any other relevant actions. If they are under debt counsellingdebt counselling they should consult their debt counsellor. If after approaching the credit provider a consumer is unhappy with the response Mphahlele urges them to contact the NDMA for assistance.

So take that first step. Simply call us directly at 086 111 3749 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

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The National Credit Act Protects You!


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  • Reduced interest rates down to 0%, accepted by creditors
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3 Important Debt Review Questions

People in debt review often encounter procedural problems and mistakes that make matters worse. Credit providers (CPs) may give the impression everything is the debtor’s fault. Closer examination reveals that CPs make their share of mistakes and have a habit of blaming others.


Here are some frequently asked questions and some possible explanations:

Why does my CP harass me when I have made arrangements to pay?

This is often the result of miscommunication between a bank’s debt review department and its product divisions (credit card division, bond division, personal loan division etc). The departments often don’t talk to each other.  A product division sees only that the client is late with a monthly payment and is unaware the customer is under debt review and the account has been restructured.

The bank’s system may not have been updated and product division staff may not have read their emails. After all, their primary job is to push their products.

Note, however, if you are under debt review, the CP is not allowed to contact you about your debts more than three times a week, and only then during office hours, Monday to Friday.

Why did the PDA not pay the creditors?  

The payment distribution agency (PDA) has the mandate to make repayments on behalf of an individual under debt review, but incorrect information can cause problems.

For instance, the bank may have updated or changed the client’s account from a normal account to a ‘legal account’ indicating the client is under debt review. The bank generates a new account number, but might not tell the PDA.. The PDA continues to use the previous account number. As a result, no payment is reflected on the account that is owed the money. The payment goes into the wrong account.


Why do I still get a summons when a court order has been issued?

A court order confirming a debt review and debt restructure should lift the threat of a summons, but a bank might still take out one. This causes some to accuse the bank or CP of acting in bad faith. An alternative explanation involves the time-lag between the last update of the CP’s system and the issuing of the court order.

A CP may be slow to input the new information. In contrast, a debt counsellor (DC) will usually start the debt restructuring process as quickly as possible.

On receipt of a summons, a customer will often contact the CP, who may then blame the DC for non-performance or might even imply the DC has simply taken the client’s money.

When this happens, the debtor must continue to make repayments while informing the DC.

If a court order is in place, a summons cannot be legally enforced unless the order has been rescinded. Overturning a court order is almost impossible if agreed repayments continue to be made.

The debtor can escalate the matter to the Head of Complaints at the National Credit Regulator. To confirm repayments are being made, request a PDA report from your DC or produce monthly documentation from the PDA.

Keep your eye on your money

When consumers enter debt review it is sometimes partially due to them having experienced difficulty managing their monthly budget.

It is a challenge to balance what comes in with what goes out. Few consumers run a regular budget before entering debt review. Then after entering debt review and finally having an industry expert who can help you with your debt many consumers just want to know how much to pay and forget abpout the stress of counting beans every month. While this is a logical and totally normal reaction it can also present a danger.

It is a big mistake to think that your creditors are actually doing their part of the debt review process and allocating your regular monthly payments via the PDA to your accounts with them.

One way to see if they are doing this is to look at your regular monthly statement from the creditor and compare it with the statement/projection given by the PDA.

If you do not get a statement from your PDA then you should complain at once. Ensure you get one monthly. Check that the account numbers look right. Compare it to last months statement.

Next, compare it to the various statements from your creditors. If you don’t get a statement from a creditor then complain at once. Insist on a statement. Otherwise you might find that several months go by and the bank or store have not been allocating funds to the right account. Worse they might then stop cooperating with the review process saying that you are not making payments.

Remember that though it is nice to get a professional to help you with your debt, it is still YOUR debt and not that of the Debt Counsellor. Part of the debt review process is to become better at handling your finances. Do not be shy to pester your creditors or your PDA till you have surficient info each month to track the progress of your debt review. Compare payments made to the plan your Debt Counsellor has handed to the courts and got a court order for. If you spot any problems with YOUR debt then tell your Debt Counsellor at once and they can help you investigate.