The DCI call out banks regarding bullying tactics

Protections under the National Credit Act (NCA) do not appear to prevent banking ‘bullies’ resorting to intimidation tactics when pursuing debtors, claims the DCI founder Debt Counsellor Deborah Solomon.  She says she has uncovered a pattern of banking industry behaviour that indicates “scant respect” for debtor rights enshrined in the NCA.

She says: “I am compiling a list of case studies involving banking institutions and the tactics used to terrorise some debtors.”

“The studies display many common features, including scare tactics rather than respect for legal process, pressure on harassed consumers to exit debt review and unwarranted attempts by banks to get debt review orders rescinded so they can terminate debt repayment schedules and make a grab for a debtor’s home, car and other property. There is also a total disregard for the in duplum rule which the banks seem as a matter of course refuse to implement.

“These banks disregard notifications that they are riding roughshod over court orders protecting the consumer. They seem to think they can act with impunity – a major concern as it suggests they believe they won’t be reined in by the National Credit Regulator (NCR).”

Solomon quotes one case in which;

 

  • Client A went into debt review in early 2010;
  • A court order was granted in March 2011 to support a payment plan and debt restructure – supposedly a signal to a creditor bank to leave the debtor in  peace as long as agreed repayments are made;
  • Between March 2011 and September 2012, 25 attempts were made by the creditor bank to have the debt schedule terminated, even though the payment plan was supported by a valid court order;
  • Client A not only made all monthly repayments, but paid more than the minimum;
  • Six complaints were made to the NDMA without response;
  • The NCR complaints division finally managed to resolve this matter.

Solomon notes: “It is not possible to overturn a valid court order supporting a debt repayment plan if the debtor honours the obligation to repay. Yet these banks continually try to have orders rescinded.”

“Every notice that lawyers are trying to rescind the order increases debtor distress and incurs wasted costs. Meanwhile the bank puts pressure on the debtor to exit debt review as this means the debtor will no longer receive the advice of a registered debt counsellor.

“Once out of review, debt review protections fall away and the debtor becomes even more vulnerable.”

She says consumers often believe major institutions must be acting properly and therefore fail to fight back.

“Consumers must not simply assume banks always act ethically but take steps to investigate consumer rights and the duties imposed on credit providers,” she says..

“Debt Counselling is a huge success that has saved thousands of homes and cars. Imagine how many more consumers could be saved if the big four banks stopped acting in bad faith”