AFRICAN BANK DEBACLE AND OTHER MATTERS
Dear Ms. Motshegare,
It is with growing concern that the Alliance of Professional Debt Counsellors ( ALLProDC ) have noted the lack of new innovative and lasting solutions to the problems that beset the implementation of the National Credit Act , 34 of 2005, in purpose and spirit despite the establishment of the Credit Industry Forum with the specific mandate to identify and find workable solutions to problems encountered in debt counselling.
The current African Bank debacle is a case in point.
The NCR was made aware via the CIF of ALLProDC’s view that African Bank was charging excessive credit insurance premiums. It has also being our CIF representative’s repeated objection at CIF to the proposed DCRS system making credit life insurance premiums compulsory to obtain acceptance of debt re-arrangement proposals. Many credit providers will now not issue Final Acceptance notices unless the DCRS system is used by Debt Counsellors regardless of the fact that as reported only 17% of all debt review cases are finalised via DCRS.
Our representative at CIF was also vocal about the fact that the CIF is not fully representative which was its Achilles heel previously under DRAC. Firstly there is no consumer representative about which he made a recommendation for a possible appointment to CIF. It was also suggested that Deborah Solomon of the DCI be included in CIF as not all Debt Counsellors were represented by the organisations included. Both points were ignored and in fact not even reflected in the Minutes. When our representative complained about this to the Secretary , Ms. Maryke Moore, he was advised that abbreviation was necessary to prevent the Minutes being too voluminous. Quite frankly this allows the Minutes to be skewed at the behest of the writer.
With specific reference to the communication between the NCR and Ms Solomon we are of the opinion that we are all in agreement that there are various reasons why this situation with African Bank happened. However our concern is with the NCR’s response to Ms Solomon media statement:
“Ms Solomon’s media statement has brought the NCR into disrepute and is a serious breach of her conditions of registration as a debt counsellor. The NCR takes strong exception to this statement and implores her to desist from issuing public statements that are calculated to bring the NCR into disrepute. The NCR has instructed Ms Solomon to withdraw her media statement by close of business today.”
This statement seems to be threatening Ms Solomon’s livelihood as a Debt Counsellor if she does not retract her statement? We hope that this was not the intention of the NCR as it would give the impression that if a Debt Counsellor should voice his or her opinion against the NCR they would be deregistered? Is this the manner in which the NCR intends to deal with real problems facing the industry? We are of the opinion that freedom of speech and the free media should always remain each and every individual’s constitutional right and should not be threatened in any way. Debt Counsellors should not live in fear of deregistration when expressing their opinions.
The above concerns are but some of the problems being encountered in the search to find workable solutions to the many problems in making the debt review process work as intended in Section 3 of the Act: “to promote and advance the social and economic welfare of South Africans, promote a fair , transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers…”
However , it seems that more time is spent with already discredited systems, threats and bullying than finding solutions.
While the CIF is still battling with current issues more problems are surfacing where credit providers are using , or should it perhaps read abusing every loop hole in the Act to further complicate the process. In this regard we refer to FNB’s attitude about the timing and accuracy of outstanding balances on the COB which could result in debt review applications not being granted because of “incorrect” outstanding balances on Applications. This raises any number of problems that need to be cleared up under strong guidance from the NCR bearing in mind the spirit and purpose of the Act.
ALLProDC would like to encourage the NCR to rather take a preventive and pro-active approach with regards to reckless credit and other contraventions of the Act towards all stakeholders involved with it to ensure that a similar situation as the African Bank matter does not repeat itself in future again. Notices to the NCR about similar business practices by role players should be investigated sooner rather than later.
Please respond to the issues raised in this letter at your earliest convenience.
GIEL VAN ZYL
ALL PRO DC