August 2021 IDM Special Edition
SCAMDEMIC NO VACCINE IN SIGHT Issue 8 of 2021
- Page 2 and 3: EXCELLENCE IS DOING ORDINARY THINGS
- Page 4 and 5: FROM THE EDITOR It has been rather
- Page 6 and 7: FROM THE IDM DESK DEBT COUNSELLING
- Page 8 and 9: FROM THE IDM DESK • Unsecured deb
- Page 10 and 11: FREE BOOKLET FOR DEBT COUNSELLORS T
- Page 12 and 13: CONSUMER FRIEND USES SOFTWARE TO EN
- Page 14 and 15: INDUPLUM CASE TO PROCEED AT SCA Bac
- Page 16 and 17: NCR CAMPAIGN ABOUT DEBT COUNSELLING
- Page 18 and 19: NCR’S CREDIT INDUSTRY FORUM DISCU
- Page 20 and 21: DRAWING MONEY FROM PENSIONS TO PAY
- Page 22 and 23: BANK ZERO FINALLY GOES LIVE After d
- Page 25 and 26: YOU SHOULD BE SAVING BUT YOU ARE SC
- Page 27 and 28: Our email and sms in-boxes are rele
- Page 29: After the target pays the fee, the
- Page 32 and 33: SCAMDEMIC: NO VACCINE IN SIGHT BANK
- Page 35 and 36: SCAMDEMIC: NO VACCINE IN SIGHT DEBT
- Page 37: Call their Bluff: Since debt review
- Page 40 and 41: SCAMDEMIC: NO VACCINE IN SIGHT DEBT
- Page 43 and 44: SCAMDEMIC: NO VACCINE IN SIGHT WHY
- Page 46 and 47: Woman photo created by wayhomestudi
- Page 49: DEBT REVIEW AWARDS 2021 IS COMING
SCAMDEMIC<br />
NO VACCINE IN SIGHT<br />
Issue 8 of <strong>2021</strong>
EXCELLENCE IS DOING<br />
ORDINARY THINGS<br />
EXTRAORDINARILY<br />
WELL<br />
– John W. Gardner
WHAT MAKES US<br />
EXCELLENT?<br />
/ Unimpaired and automated PDA systems<br />
/ Integration with top-ranked Debt Counsellor systems<br />
/ Enhancing Debt Counsellor efficiency and sustainability<br />
/ Best customer support in the country – queries are resolved within 24 hours<br />
/ Strong compliance and best-industry-practice implementation is at our centre<br />
Call Chris van der Straaten<br />
Head of Hyphen PDA | 082 557 0437<br />
Or call our friendly support centre on 011 303 0060 - Option 2<br />
or visit our website www.hyphenpda.co.za
FROM THE EDITOR<br />
It has been rather impressive to see the worlds finest<br />
athletes run around empty stadiums and compete for<br />
Olympic gold. There were some memorable moments,<br />
as always, and it has given us an enjoyable distraction<br />
in the midst of a very hard and scary year.<br />
Here’s to the underdogs who surprised us all, here is to the Haka<br />
dancing, the perfectly synchronized swimming, the meme recreating<br />
Gold medal biting, the 14 year old perfect diving, the home runs hit<br />
into the empty stadiums, the javelins launched across the world,<br />
here’s to the new world records set on track and in the pool.<br />
The biggest winners were probably those who got to watch from<br />
the safety of their homes around the globe, while the biggest losers<br />
must surely have been the host country. As South Africa knows,<br />
hosting an international event of this size costs millions and millions<br />
in building and preparation. To then lose out of any possible revenue<br />
from visiting spectators, must have hurt. It just demonstrates how<br />
vulnerable we all are (even countries) to the effects of the pandemic.<br />
Other than a very expensive distraction, the Olympics is also a<br />
competition between the ‘best of the best’. It is a chance for<br />
those who excel to assess themselves against their peers. It is the<br />
culmination of years of personal preparation and training, of selfdenial<br />
and discipline, this takes razor sharp focus.
This is similar to the annual Debt Review Awards process. It is a<br />
chance for not only the entire industry to shine (and take a moment<br />
to pat one another on the back) but also for individuals, companies<br />
and practices to find out how they stack up against their peers. Be<br />
sure to catch our preview article, as everyone gets ready for the<br />
online Awards show on 10th of September.<br />
This month we consider how the pandemic has not slowed down<br />
unscrupulous people who are out to take advantage of others. Like<br />
true parasites of society, these scammers continue to try leech off of<br />
hard working people, regardless of the consequences.<br />
We hope the articles in this issue help you become more aware of<br />
these types of scams and more wary of other possible scams.<br />
You may not have the muscle bound body of an Olympian in peak<br />
physical condition, but if you are in debt review, then you too have<br />
been working on achieving a truly amazing long-term goal - the goal<br />
of getting out of debt.<br />
Much like a training athlete, success in debt review comes from<br />
staying focused, being willing to cast off distractions, learning to shop<br />
better, to save harder, to make the budget cuts others cannot, or<br />
simply are not prepared to make.<br />
If you can do this, then soon you will lift aloft your gold medal in the<br />
form of a clearance certificate, showing that you are winning at life<br />
and have become debt free!
FROM THE<br />
<strong>IDM</strong> DESK<br />
DEBT<br />
COUNSELLING<br />
DELIVERS AS<br />
DEMAND RISES<br />
Q2 <strong>2021</strong> Debt Index<br />
shows although debt<br />
burden is growing debt<br />
counselling works.<br />
South African consumers’ debt<br />
situation is getting worse with<br />
the average debt-to-income<br />
ratio at its highest level ever, but<br />
there is some good news with<br />
more people seeking help and<br />
a significant increase in those<br />
successfully completing debt<br />
counselling.
This is according to the DebtBusters’ <strong>2021</strong> Q2 Debt Index, which tracks<br />
client trends quarter-on-quarter and over the past five years.<br />
In the second quarter enquiries about debt counselling increased by 18%<br />
compared to a year ago. Benay Sager, head of DebtBusters, attributes<br />
this to the after-effects of the nationwide lockdown and a narrowing of<br />
consumers’ ability to borrow.<br />
He says that the debt levels have increased substantially and the number<br />
of open accounts have decreased for consumers applying for debt<br />
counselling, both of which indicate that consumers are seeking help<br />
sooner.<br />
The pool of consumers borrowing has also shrunk, as supported by<br />
National Credit Regulator data, which indicates average unsecured loan<br />
size has increased by 46% and number of loans has decreased by 31%<br />
over the last four years.<br />
Compared to the same period five years ago the Debt Index found:<br />
• Real income is declining as inflation continues to bite: Nominal<br />
incomes were, on average, 3% higher than in Q2 2016, but when<br />
cumulative inflation growth of 24% is factored in, real incomes have<br />
shrunk by 21%.<br />
• The debt-to-net-income ratio is at an all-time high: Consumers<br />
enquiring about debt counselling are spending around 60% of their<br />
take-home pay to service debt. More concerning is that across all<br />
income bands the debt-to-income ratio is now at 122% and 152%<br />
for those taking home R20 000 or more.
FROM THE <strong>IDM</strong> DESK<br />
• Unsecured debt level continues to increase: The level of unsecured<br />
debt is on average 32% higher than in 2016 and up by 49%<br />
amongst consumers taking home R20 000 or more. This is a direct<br />
result of consumers using unsecured debt to offset the erosion of<br />
their take-home pay.<br />
Sager says despite all the bad news, which is perhaps unsurprising given<br />
the impact of successive lockdowns on an already struggling economy,<br />
there were some positive findings that show debt counselling works:<br />
• More consumers successfully complete debt counselling: There are<br />
now seven times as many consumers completing debt counselling<br />
as there were in 2016.<br />
• Effective mechanism for paying back debt: Consumers who<br />
successfully completed debt counselling in Q2 <strong>2021</strong> paid<br />
back R320m worth of debt to their creditors as part of the debt<br />
counselling process<br />
He says the fact that 56% of applicants for debt counselling are male<br />
is also positive. In Q2 2016 more women (52%) than men (48%) were<br />
applying for help to restructure their debt.<br />
“In a society where men typically tended not to want to talk about or seek<br />
help with debt, it’s encouraging that men are becoming more proactive<br />
about dealing with debt problems.”
DEBT REVIEW<br />
LESSON #1<br />
If you begin to earn significantly more than<br />
when you started debt review, be sure to<br />
talk to your Debt Counsellor about how<br />
you can pay off your debts faster.<br />
You can finish debt review faster and end<br />
up saving thousands on fees and interest<br />
by paying even a bit more each month.
FREE BOOKLET<br />
FOR DEBT COUNSELLORS TO SHARE<br />
Are you being phoned by consumers who<br />
are asking how they can leave debt review?<br />
Is your inbox full of requests to remove a<br />
Debt Review Flag at credit bureaus?<br />
The free booklet, which you can download from the link below ( 1MB<br />
in size) covers many common questions and helps consumers learn<br />
more about the challenges involved with having their debt review<br />
status removed before paying off all their debt.<br />
DOWNLOAD AND SHARE<br />
Save Time<br />
Send Detailed Information<br />
Educate your Clients & Consumers
CONTENTS<br />
SCAMDEMICS: NO VACCINE IN SIGHT<br />
<strong>2021</strong> DEBT<br />
REVIEW AWARDS<br />
POPI BASICS<br />
FOR DEBT<br />
COUNSELLORS<br />
DEBT VADER: WHY<br />
CONSUMERS ARE<br />
STILL NOT GETTING<br />
COURT ORDERS<br />
DEBT REVIEW<br />
SCHOOL<br />
DISCLAIMER<br />
Debtfree Magazine considers its sources reliable and verifies as<br />
much information as possible. However, reporting inaccuracies<br />
can occur, consequently readers using this information do so<br />
at their own risk. Debtfree Magazine makes content available<br />
with the understanding that the publisher is not rendering legal<br />
services or financial advice. Although persons and companies<br />
mentioned herein are believed to be reputable, neither<br />
Debtfree Magazine nor any of its employees, sales executives<br />
or contributors accept any responsibility whatsoever for their<br />
activities. Debtfree Magazine contains material supplied to<br />
us by advertisers which does not necessarily reflect the views<br />
and opinions of the Debtfree Magazine team. No person,<br />
organization or party can copy or re-produce the content<br />
on this site and/or magazine or any part of this publication<br />
without a written consent from the editors’ panel and the<br />
author of the content, as applicable. Debtfree Magazine,<br />
authors and contributors reserve their rights with regards to<br />
copyright of their work.
CONSUMER FRIEND<br />
USES<br />
SOFTWARE TO ENSURE<br />
POPIA COMPLIANCE!<br />
- Secure system-to-system data transfer (no human contact)<br />
- Elimination of data exposure from the use of email<br />
- Data specification is fit for purpose<br />
POPIA COMPLIANCE IS<br />
CRUCIAL THIS YEAR!
BREAKING<br />
NEWS
INDUPLUM CASE TO<br />
PROCEED AT SCA<br />
Back in 2019, the Western Cape High Court issued a landmark<br />
judgment regarding the double up or ‘in Duplum’ law as set<br />
out in the National Credit Act and other laws.<br />
The ruling went in the way of consumers and offered greater<br />
clarity on what fees can and can’t be charged and how these<br />
form part of the overall debt calculations of NCA Section<br />
103(5) in Duplum.<br />
Credit providers who really enjoy charging consumers lots<br />
of extra collections fees appealed the ruling.<br />
The case will soon be heard at the Supreme Court of Appeal<br />
(on the 7th of September <strong>2021</strong>). The Stellenbosch University<br />
Law Clinic will be appearing to once again argue the matter<br />
on behalf of consumers.
We are the champion<br />
in your corner!<br />
DebtBusters provides a remedy for financially stressed<br />
consumers through effective debt relief solutions.<br />
Over 1 million South Africans who are facing tight<br />
budgets and are struggling with debt, have come to<br />
DebtBusters looking for a financial solution.<br />
086 999 0606<br />
info@debtbusters.co.za<br />
www.debtbusters.co.za
NCR CAMPAIGN ABOUT<br />
DEBT COUNSELLING<br />
Every year the NCR sets aside some time and money to<br />
promote the debt counselling process. At the moment, the<br />
NCR is busy promoting the message of how Debt Counselling<br />
offers a new lease on life for over indebted consumers.<br />
Though their press releases don’t actually discuss the<br />
extensive benefits of the process, the campaign does feature<br />
some extensive warnings pointing out such things as how<br />
debt review is not a savings mechanism, and to encouraging<br />
consumers to avoid people who advertise saying you can<br />
get up to 60% off you usual payments.<br />
They also warn that debt counselling is not for everyone and<br />
some people who apply can be rejected from the process.<br />
They also stress that the process is not free and there<br />
are many fees (which they try explain). They go into the<br />
maximum fees in detail and stress the importance of only<br />
dealing with a counsellor with a certificate.<br />
Hopefully consumers will be won over to this new lease on<br />
life by all the warnings and helpful reminders not to deal<br />
with unregistered persons.
DEBT REVIEW AWARDS<br />
10 SEPTEMBER <strong>2021</strong><br />
The annual Debt Review Awards will be live streamed on<br />
YouTube on September the 10th <strong>2021</strong>. All are welcome to<br />
watch and you can find the links to watch live at<br />
www.debtreviewawards.co.za on the day.<br />
The YouTube Chanel can be found here:<br />
https://bit.ly/3kiIjuQ
NCR’S CREDIT INDUSTRY FORUM DISCUSSING<br />
CHANGES TO DEBT COUNSELLING FEE<br />
GUIDELINE<br />
The NCR from time to time release fee guidelines that it<br />
feels the industry should follow. These fee guidelines are<br />
often matched by debt review proposal software (which<br />
helps Debt Counsellors quickly make proposals to credit<br />
providers).<br />
At present the NCR are asking members of the Credit Industry<br />
Forum to consider a fee structure which asks attorneys to<br />
wait to get paid or to perhaps not get paid if clients drop out<br />
of the process.<br />
They have also proposed a fee structure that would see<br />
Debt Counsellors wait on courts and consumers for a long<br />
time to pay a quarter of their fees.<br />
Many Debt Counsellors and Attorneys are worried that such<br />
a fee structure will prevent them from being able to operate<br />
successfully and could wipe out the industry.<br />
For more information visit: www.debtfreedigi.co.za for a<br />
detailed examination over the next few weeks.
POPI-PROOF<br />
your PROCESSES<br />
WITH DREX<br />
Secure system-to-system data transfer<br />
(no human contact)<br />
Elimination of data exposure from the<br />
use of email<br />
Data specification is fit for purpose<br />
^<br />
DID YOU KNOW?<br />
The President of South Africa has proclaimed the POPIA commencement date to be 1 July <strong>2021</strong>.<br />
POPIA applies to any company or organization processing personal information in South Africa.<br />
Fines for non-compliance with POPIA can range up to 10 million ZAR (South African rands).<br />
POPIA defines personal information broadly as any information relating to not only a living person,<br />
but also a company or legal entity.<br />
^ ^ ^
DRAWING MONEY FROM<br />
PENSIONS TO PAY DEBTS?<br />
There is a lot of discussion, on a government level, about<br />
making changes to current legislation which would allow<br />
consumers (under certain circumstances and to a limited<br />
amount) to draw part of their pensions early.<br />
As soon as mid 2022, changes to laws around pensions<br />
may allow some troubled consumers’ access to some of<br />
their pension funds. While this would have a massive knock<br />
on effect on the future value of peoples’ pensions, cash<br />
strapped consumers are desperate to get at these funds<br />
now and are happy to worry about retirement later.<br />
Government is also looking to lock pension investments into<br />
local infrastructure building in an effort to fund government<br />
projects.
NEW FINANCE MINISTER<br />
President Ramaphosa recently made some significant<br />
changes to his Cabinet. In the midst of all the changes,<br />
Finance Minister Tito Mboweni handed in his resignation.<br />
The President then invited the head of the ANC’s NEC<br />
economic transformation sub-committee, Mr Enoch<br />
Godongwana to take on the role as Finance Minister. He<br />
accepted.<br />
Mr Godongwana has served as a director at Mondi, and<br />
Platinum Group Metals as well as chairperson of the<br />
Development Bank of Southern Africa. He comes from<br />
a trade union background and at one time served as the<br />
general secretary of Numsa. He spent time as Provincial<br />
Minister of Finance in the Eastern Cape before becoming<br />
the Deputy Minister of Economic Development.<br />
In the past, Mr Godongwana has been outspoken about<br />
overspending by Government and made statements about<br />
the need for SA to have better social infrastructure to meet<br />
people’s basic needs.
BANK ZERO FINALLY<br />
GOES LIVE<br />
After delaying for nearly 3 years Bank Zero has finally opened<br />
their doors. Bank Zero says they delayed their launch for so<br />
long to ensure that their digital offerings aimed at businesses<br />
were just right.<br />
The latest, digital only, bank has said that, unlike some of<br />
their competition, they intend to focus primarily on business<br />
banking clients. That said, Bank Zero will also have smaller<br />
accounts for those just looking to save (as it would be foolish<br />
to turn these clients away).<br />
Bank Zero says they will not be offering clients overdrafts<br />
and loans at this point.
DEBT REVIEW<br />
LESSON #2<br />
Talk to your Debt Counsellor about what<br />
would happen if you suddenly lost some<br />
of your income.<br />
They may be able to help you investigate<br />
insurance specifically for people in debt<br />
review which can help in that situation. In<br />
debt review you need to learn to plan for<br />
the unexpected.
YOU SHOULD BE<br />
SAVING<br />
BUT YOU ARE<br />
SCAMDEMIC<br />
NO<br />
NOT<br />
VACCINE IN SIGHT
SCAMDEMIC: NO VACCINE IN SIGHT<br />
DEAR FRIEND...<br />
How many times can you win the UK lottery without<br />
even entering?<br />
How many distant relatives (who you’ve never heard<br />
of) have left you the sole beneficiary of their massive<br />
estate?<br />
How many former finance minister’s sons or daughters<br />
have contacted you, asking for help to move money or<br />
gold out of their country?<br />
Sometimes your phone goes ahead and wins a<br />
competition without you. Well done smart phone!<br />
Heck, sometimes Elon Musk is giving away crypto<br />
currency and wants your help to hide the profits from<br />
the IRS. You never realized he even knew who you<br />
were, amazing!
Our email and sms in-boxes are relentlessly full of horrible scams<br />
from unscrupulous crooks who simply want to con you out of your<br />
hard earned money.<br />
Covid-19 has not slowed these scammers down, they are as<br />
active now as ever, perhaps even more so. There are even specific<br />
scams that target people who are in debt review, and can be very<br />
convincing.<br />
What are some common scams to watch out for, and how can you<br />
protect yourself from being taken to the cleaners?
SCAMDEMIC: NO VACCINE IN SIGHT<br />
419– THE ORIGINAL<br />
INTERNET SCAM<br />
The “419 Scam” or “Nigerian Prince” scam, is one of<br />
the oldest tricks in the book. You may think this scam<br />
is fairly new, but in its infancy it was carried out via<br />
faxes and then letters. The invention of email has really<br />
helped these scam artists extend their reach globally.<br />
How it works:<br />
A mysterious person claims to have a way for you to get lots of<br />
money, all you need to do is pay a small fee upfront to get access to<br />
those funds.<br />
For example, a foreign prince wants to send you gold bars via the<br />
postal service, or through their “lawyers” but a small release fee is<br />
needed to facilitate some government paperwork. They ask if you can<br />
please pay this fee (or part of it) into an account they give you and<br />
then the deal can go ahead.
After the target pays the fee, the conman either immediately ghosts<br />
them, or create excuses for delays and try to get you to pay a little<br />
more before disappearing.<br />
The FBI often refer to these scams by the number ‘419’ since it is the<br />
section of the Nigerian Criminal Code that deals with fraud.<br />
James Vietch the comedian has become famous over the years for<br />
answering these types of messages and messing around with the<br />
conman on the other side of the scam.<br />
He leads them on for days or weeks, even months with ridiculous<br />
comments, requests or even promises wasting their time so they<br />
cannot go after vulnerable people.<br />
Have a laugh at their expense here:<br />
www.ted.com/talks/james_veitch_this_is_what_happens_when_you_reply_to_spam_email?language=en
SCAMDEMIC: NO VACCINE IN SIGHT<br />
I WILL DO AN EFT<br />
Selling things via Gumtree, OLX or other public<br />
platforms is super convenient and can help you raise<br />
some much needed cash when your ends don’t meet.<br />
A common scam is to contact you from “far away”, and ask you to<br />
send the sale item to them via the post. The person sends proof of<br />
payment and then waits for you to send the item.<br />
More brazen crooks might even show up in person after convincing<br />
you that they have made the bank payment.<br />
How it works:<br />
The person makes a payment that reflects on your online banking<br />
(you may even call the bank and check) and then later reverse the<br />
payment, or they made the payment in such a way that it bounces<br />
back to them.<br />
They then end up with the item and you end up with nothing.
SCAMDEMIC: NO VACCINE IN SIGHT<br />
BANKING SCAMS<br />
You may often receive emails that look like they are<br />
from your bank asking you to sign in using your log in<br />
and password to confirm some information.<br />
When you type in those details, criminals use that information to try<br />
get access to your accounts.<br />
The banks have worked really hard to prevent these scams, and<br />
these days banking apps ask you to confirm things with your finger<br />
print or via one time passwords. Even so, with access to only basic<br />
information about you, scammers can try to get access to your<br />
accounts.<br />
OTP Scams<br />
Since the banks have made it harder for scammers to gain access to<br />
your accounts without one time pins, scammers have had to change<br />
their tactics. They now try to convince you to give them your OTP<br />
while they try make withdrawals.<br />
How it Works:<br />
You receive a call from a “bank employee” (scammer) who tells you<br />
they are from the bank and maybe even asks if you are the account<br />
holder and mentions some details like your address or the account<br />
number.
Impressed that they have some of this info you begin to trust them.<br />
They may even ask you some security questions to harvest more<br />
information from you. Wow, these people are serious about your<br />
safety (or so it seems).<br />
They then tell you that someone is performing suspicious<br />
transactions on your account. Oh no, what must I do?<br />
They tell you that they are going to send you some One Time Pins or<br />
passcodes to stop the transactions.<br />
Then your phone starts to get OTPs they are busy making transfers or<br />
purchases on your account.<br />
They ask you to tell them the code you just received, so that they can<br />
stop the payments being made. In the mean time they are actually<br />
using those OTPs to complete the transaction themselves, with your<br />
help!<br />
A big part of this scam is to pressure you, and make you feel the<br />
urgency of stopping such payments. They do not give you time to<br />
think or time to hang up and call the bank directly (which is what you<br />
should actually do).
SCAMDEMIC: NO VACCINE IN SIGHT<br />
DEBT REVIEW SCAMS<br />
Some scams target people who are in debt review.<br />
The scammers know a little about the process, and may even have<br />
access to some information about your debt review, such as who<br />
your Debt Counsellor is, or how much you pay towards your debt<br />
each month.<br />
What are some of the most common scams?
SCAMDEMIC: NO VACCINE IN SIGHT<br />
DEBT REVIEW SCAMS<br />
NEW ACCOUNT<br />
DETAILS<br />
This is actually a fairly common scam in many<br />
industries and involves someone telling you that the<br />
PDA banking details have changed, and asking you to<br />
make a payment into the new account.<br />
How it Works:<br />
Someone from your “Debt Counsellors office” (the scammer) calls<br />
and says that they have good news for you, your payment amount<br />
has been reduced. What good news!!! This is the bait to draw you<br />
in. Who wouldn’t want to pay less? Then they tell you that all you<br />
now need to do is pay the reduced amount into a different account<br />
number (for one reason or another).<br />
It is important to note that the PDAs have not changed their bank<br />
details for years and years, and this is unlikely to happen. If someone<br />
tells you this, they are trying to scam you.<br />
What you should immediately do, is pick up the phone and call your<br />
Debt Counsellor directly (the person you actually know by voice<br />
and perhaps face to face) and ask if any such change has actually<br />
happened.
Call their Bluff:<br />
Since debt review is very paperwork heavy they should be able to<br />
send you the restructured payment plan with the reduced payment<br />
amount, and perhaps even the documents from the credit providers<br />
who are now happy to get paid less each month (these don’t exist<br />
obviously).<br />
Debt Counsellors also get targeted by these types of scams. For<br />
example, some scammers contacted many Debt Counsellors and told<br />
them the National Credit Regulator (NCR) had changed bank details,<br />
and they should pay their annual renewal fees into the new account.<br />
It was, of course, the scammers own account and not that of the<br />
NCR. Same scam but a slightly different target group.
SCAMDEMIC: NO VACCINE IN SIGHT<br />
DEBT REVIEW SCAMS<br />
YOU CAN GET<br />
A NEW LOAN<br />
A common scam is to target people in debt review<br />
who are not actually serious about getting out of debt.<br />
The scammer gets in touch and promises the consumer that they can<br />
get access to a new loan even though they are in debt review. They<br />
appeal to the desperation or greed of the person in debt review, very<br />
similar to the classic 419 scam.<br />
How it Works:<br />
Once again, the idea is that the scammer promises you could get<br />
access to a loan, but only if you pay a small upfront fee. They say<br />
that their business is not worried about things like “black listing” (a<br />
nonsense expression) or “debt review”. They promise not to do any<br />
credit bureau checks before giving out the credit (even though the<br />
law requires it).
SCAMDEMIC: NO VACCINE IN SIGHT<br />
DEBT REVIEW SCAMS<br />
YOU CAN GET OUT<br />
OF DEBT REVIEW<br />
A growing scam is to tell people they can magically<br />
leave debt review before they have paid off all their<br />
debt. This is not legally possible.*<br />
Being in debt review is saving you thousands in fees and interest, but<br />
some people find it hard to stick to the tight budgets and to never<br />
miss payments. They long for the days when they used to owe people<br />
lots and being chased by collections agents 24/7 (we don’t know<br />
why).<br />
They miss having access to money they had not earned, and<br />
sometimes find themselves in need of more money to pay for<br />
something urgent. Instead of turning to their Debt Counsellor for<br />
advice, they begin to search the internet for a new loan and fall into<br />
the hands of scammers.
How it Works:<br />
You go online and Google “how to leave debt review” (for one reason<br />
or another) instead of talking to your Debt Counsellor about it. You<br />
find a Facebook page or website with promises of getting you out of<br />
debt review. It seems easy and they promise quick results.<br />
They ask for a fee upfront to get you out of debt review. They advise<br />
you not to pay your debt review this month and rather pay them their<br />
fees.<br />
Much like a classic 419 scam they then either try do a little bit of work<br />
and get you to pay them again or they simply disappear.<br />
*Except if the only debt left is your bond. In such a case, the Debt Counsellor is the best<br />
person to help you leave debt review safely so that you do not lose your home. If a consumer<br />
has never received a court order saying they are over indebted then a court may also decide<br />
that the consumer now has enough money each month that they don’t need debt review. In<br />
such a case, once again, your Debt Counsellor is the best person to help you sort this out via<br />
the courts but it takes some time.
SCAMDEMIC: NO VACCINE IN SIGHT<br />
WHY ARE SOME<br />
SCAMS SO TOTALLY<br />
RIDICULOUS AND<br />
OBVIOUSLY A SCAM?<br />
Sometimes scams seem so obvious. Why do scammers<br />
send poorly written emails with promises of ridiculous<br />
large amounts of money?<br />
They do this because they are targeting people who do not see the<br />
danger, those who overlook the obvious warning signs and still go<br />
ahead. These gullible people are their targets, not the ones who see<br />
the danger.<br />
So they continue to use this shotgun approach, sending out<br />
thousands of emails or sms, and see who takes the bait.
SCAMDEMIC: NO VACCINE IN SIGHT<br />
PROTECT YOURSELF<br />
FROM SCAMS<br />
Rather than following links to dodgy websites you find<br />
in suspicious emails, go directly to your banks website.<br />
Type the link into the address bar on your computer or<br />
phone. If the offer is real, you will find what you need<br />
on your banks legitimate site.<br />
If someone calls you and says they are calling on behalf of the banks<br />
fraud department, thank them for their call, hang up and call the bank<br />
yourself. Never give anyone an OTP, the banks all assure us that their staff<br />
will never ever ask you for these details (or your account passwords).<br />
If you are in debt review, then the number one way to avoid scams<br />
is to regularly communicate directly with your Debt Counsellor. If<br />
approached by strangers with offers that seem too good to be true,<br />
reach out directly to your DC and discuss the offer with them. Don’t<br />
be desperate to take on more debt or be in a hurry to get out of the<br />
process for no good reason. After all, you want less debt and not<br />
more.<br />
If you are struggling to make ends meet each month, or are faced<br />
with an emergency, then contact your Debt Counsellor for the best<br />
advice. Also, please remember the Payment Distribution Agencies do<br />
not change their bank details.
Woman photo created by wayhomestudio - www.freepik.com
SCAMDEMIC: NO VACCINE IN SIGHT<br />
AVOID THE<br />
SCAMDEMIC<br />
Sadly even now, scammers are out there and they want<br />
to rip you off. They will promise you the world, as long<br />
as you pay upfront.<br />
Never let anyone trick you in to paying upfront for a service you have<br />
not yet received.<br />
While there is no 100% way to be safe, you can avoid the most<br />
common scams out there with a little bit of caution and a dash of<br />
common sense.
DEBT REVIEW<br />
AWARDS<br />
<strong>2021</strong><br />
IS COMING
THE DEBT REVIEW AWARDS IS COMING<br />
IT’S A HARDKNOCK<br />
LIFE...<br />
Since the Zoom-demic began, time has become hard<br />
to keep track of. One minute it’s April 2020 and the<br />
next it is almost 2022.<br />
But before this year ends, we must spend a few moments celebrating<br />
debt review, the hard working companies, practices and individuals<br />
who work in the industry.<br />
The annual Debt Review Awards will be online again this year, and<br />
we invite everybody to tune in and enjoy the show with us. Friday, 10<br />
September is just a few weeks away, so let’s take a look at what the<br />
awards are, why they matter and how you can watch this year.
THE DEBT REVIEW AWARDS IS COMING<br />
WHAT ARE THE DEBT<br />
REVIEW AWARDS?<br />
The Debt Review Awards originated in 2014, when<br />
Debtfree Magazine Editor, Zak King brought the<br />
industry together in various committees to identify<br />
which credit providers, Debt Counsellors and Payment<br />
Distribution Agencies were performing well.<br />
A small red carpet gala was held, and leaders in the industry were<br />
invited to attend. It was a celebration of all the good that debt review<br />
does for consumers and the economy.<br />
On that occasion, the very first Golden Piggy Bank awards were<br />
handed out, and so the Annual Debt Review Awards were initiated.<br />
The processes are being refined each year, and the award recipients<br />
are now based on the results of online peer reviews. Different NCR<br />
registrants are able to complete each year.<br />
The results of the combined reviews are revealed on the day of the<br />
Debt Review Awards Gala. In 2020, the Gala shifted to an online show<br />
(due to the pandemic), and will be live streamed again this year.
YOU HAVE TO SEE IT FOR YOURSELF...
THE DEBT REVIEW AWARDS IS COMING<br />
WHY DO WE NEED<br />
THE AWARDS?<br />
While it is great for credit providers and Debt<br />
Counsellors to receive the highest ratings in the peer<br />
reviews, and to receive a Golden Piggy Bank, the<br />
Awards are more than a popularity contest.<br />
There is a tendency, in any industry, to focus on the ongoing<br />
problems. This is because those problems often slow down the<br />
process, and cause extra work and headaches. So, when there<br />
is an industry meeting, it is often with the goal of identifying and<br />
deliberating these problems to overcome them.<br />
This is a great idea, but it very quickly turns into a big gripe session,<br />
with a negative tone. So, when do you celebrate all the good being<br />
accomplished in the industry? Sadly, this is done rarely, if ever.<br />
Due to the many challenges with a complex and developing<br />
industry, like debt counselling, there are plenty of occasions to<br />
moan and attempt to rectify issues. In fact, it is a vital focus of many<br />
conferences, forums and other meetings.
This is why the Annual Debt Review Awards are so important for<br />
the debt review industry! It provides all who work in the industry, a<br />
chance to reflect on all the good that has been accomplished. This is<br />
not to be minimized, Debt review saves lives and has helped cushion<br />
the local impact of the global financial crises.<br />
It also gives those who work in the industry a chance to pause, and<br />
focus on what is making some of their colleagues businesses work<br />
smoother, more efficiently.<br />
It poses the important question:<br />
What does it mean to be a good debt counsellor, a good<br />
credit provider, a good payment distribution agent?
THE DEBT REVIEW AWARDS IS COMING<br />
THE PEER REVIEW<br />
PROCESS<br />
You may wonder how does the peer review process<br />
work?<br />
Here is a quick chart explaining how the process takes place during<br />
the year leading up to the Awards Show.
THE DEBT REVIEW AWARDS IS COMING<br />
WHAT TO EXPECT<br />
DURING THE<br />
AWARDS SHOW<br />
Based off the experiences of the live streamed Awards<br />
show of 2020, the organizers are running a preshow<br />
around midday and the Awards Show itself from 2pm<br />
on Friday the 10th of September.<br />
The idea behind holding the event during the afternoon, rather than<br />
on a Saturday evening (as was the case with the red carpet gala in<br />
the past) is to give as many people who work within the industry the<br />
chance to enjoy the show.<br />
Most of the larger Debt Counselling practices and credit provider<br />
debt review offices will close their phone lines a bit early that day, and<br />
invite their entire team to enjoy the show.<br />
For those who work remotely, this may be done over a shared Zoom<br />
or Teams session or perhaps just on their own device at home while<br />
Whatsapping with others are the office.
For those who are working in offices across the country, managers<br />
are arranging socially distanced group viewings on big screens or<br />
computers at work (there may even be snacks).<br />
The Preshow will feature group chats by some within the<br />
industry, where we can be a fly on the wall and see what they<br />
discuss. There will also be interviews with previous winners,<br />
presentations and some recaps regarding the process and<br />
candidates who are in line to take the top spots this year.<br />
The Preshow also gives the streaming team time to sort out<br />
any possible glitches and hiccups that might otherwise ruin<br />
the fun.<br />
The Main Awards Show will begin at 2pm. There will be<br />
speeches by familiar faces (including the National Credit<br />
Regulator and National Debt Counsellors Association). There<br />
will also be some entertainment (with a chance for you to<br />
sharpen up some of your skills). We will also find out who<br />
the 2 winners of the Significant Contribution to Debt Review<br />
awards will be, as well as the new Technology Adoption<br />
Award.<br />
After the speeches and a presentation about the debt review<br />
process, (including consumers getting out of debt) the results<br />
of the Peer reviews will be announced.<br />
The show should wrap up around 4pm so that those who<br />
commute will be able to do so around their normal transport<br />
times.
THE DEBT REVIEW AWARDS IS COMING<br />
HOW TO WATCH THE<br />
AWARDS<br />
All you need to be part of the action this year, is a device<br />
and access online. The Debt Review Awards show will<br />
be live streamed via YouTube.<br />
Step One: For up-to-date info visit www.debtreviewawards.co.za.<br />
Besides having information about the process, previous winners and<br />
the criteria used the site will feature links you can click to watch the<br />
show live.<br />
Step Two: You can also subscribe to the Debt Review Awards<br />
YouTube Channel HERE.<br />
Step Three: Check your email. Closer to the time the organizers<br />
will be sending out emails with reminders to those who have been<br />
participating in the peer reviews and those who have signed up to the<br />
mailing list.<br />
Step Four: Follow Debt Review Awards (and Debtfree Magazine) on<br />
social media to get access to all the reminders, links and even up to<br />
date results as the show streams out live.<br />
Check out our other social media channels:<br />
youtube facebook instagra twitter
A BIG THANK YOU<br />
Each year the sponsors help to cover the costs of running the<br />
peer reviews, maintaining the website, auditing and preparing
TO OUR SPONSORS<br />
the results and organizing the Awards gala/show. This year we<br />
want to particularly thank the following Supporters and Sponsors.
DEBT REVIEW<br />
LESSON #3<br />
You should discuss your monthly budget<br />
with your Debt Counsellor from time to<br />
time.<br />
Your budget needs to adjust and you need<br />
to adjust your monthly spending to ensure<br />
that you never miss a court ordered debt<br />
review payment.
POPI ACT<br />
PROTECTION OF PERSONAL INFORMATION<br />
P e r s o n a l i n f o r m a t i o n i s d a t a t h a t c a n b e u s e d t o<br />
i d e n t i f y a s p e c i f i c p e r s o n<br />
IDENTIFYING<br />
DETAILS<br />
CONTACT<br />
DETAILS<br />
DEMOGRAPHICS<br />
BACKGROUND<br />
INFORMATION<br />
FINANCIAL<br />
SOCIAL<br />
MEDICAL AND<br />
HEALTH<br />
D o n o t l e a v e d o c u m e n t s o r s c r e e n s t h a t c o n t a i n p e r s o n a l i n f o r m a t i o n o p e n f o r a n y o n e t o s e e .<br />
S h r e d o r p r o p e r l y d e s t r o y / d e - i d e n t i f y d o c u m e n t s t h a t a r e n o l o n g e r r e q u i r e d f o r w o r k p u r p o s e s .<br />
R e g u l a r l y u p d a t e y o u r p a s s w o r d s t o s y s t e m s a n d a p p l i c a t i o n s t h a t c o n t a i n p e r s o n a l i n f o r m a t i o n .<br />
A v o i d s e n d i n g s e n s i t i v e i n f o r m a t i o n o v e r e m a i l a n d c o m m u n i c a t i o n d e v i c e s .<br />
D o n o t s t o r e s e n s i t i v e i n f o r m a t i o n o n d e s k t o p s o r f l a s h d r i v e s t h a t c a n b e e a s i l y i n t e r c e p t e d .
POPI BASICS<br />
FOR DEBT COUNSELLORS
POPI BASICS FOR DEBT COUNSELLORS<br />
INTRODUCTION<br />
Debt review is an information rich process with<br />
personal information at its core. Introduce the<br />
Protection of Personal Information Act, 2013 (‘POPIA’)<br />
to the mix and suddenly the information obligations<br />
upon Debt Counsellors become that much heavier.<br />
Your Client is now<br />
the “Data Subject”<br />
There is a lot to consider from a processing perspective when<br />
undertaking a debt review process for a consumer, who is now<br />
known as the ‘data subject’ in the PoPI Act.<br />
Personal information is processed from the start of a debt review and<br />
continues for an extended period of time until the consumer is finally<br />
cleared by the Debt Counsellor.<br />
Even after the review ends, data has to be stored for some time. What<br />
are some things you need to know about the PoPI Act if you are a<br />
Debt Counsellor?
POPI BASICS FOR DEBT COUNSELLORS<br />
THE PURPOSE<br />
FOR PROCESSING<br />
PERSONAL DATA<br />
Firstly, defining the purpose for processing of<br />
consumer personal data is captured in the National<br />
Credit Act, 2005 (‘NCA’).<br />
Simply put ,the information of the consumer is collected and<br />
processed in order for the debt counsellor to fulfill its statutory<br />
obligation under the NCA; both a contractual and legal purpose.<br />
The NCA sets forth the information required in order to support<br />
a debt review application from simple identity information to the<br />
complexities of credit account numbers, balances and other financial<br />
information.<br />
This info needs to be added into your PoPI Manual.
POPI BASICS FOR DEBT COUNSELLORS<br />
THIRD PARTY<br />
SERVICE PROVIDERS<br />
Secondly, debt counsellors make use of third-party<br />
service providers in order to either interact with credit<br />
providers, credit bureaus or other role players in the<br />
debt review process.<br />
Service providers are used to process debt reviews on systems and via<br />
PDAs to distribute payments to credit providers.<br />
An important compliance step would be understanding these<br />
role players and defining which relationships amount to ‘operator’<br />
relationships and formulating agreements to manage your<br />
compliance together with your operators.<br />
You may need to update some agreements with 3rd Party Suppliers<br />
and reflect the use of 3rd Parties in your paperwork with clients.
POPI BASICS FOR DEBT COUNSELLORS<br />
DATA SECURITY<br />
Lastly, but definitely not least, data security is an<br />
important aspect of POPIA and a vital compliance step<br />
in your compliance program.<br />
Debt counsellors need to understand their IT infrastructure and the<br />
security parameters around that infrastructure.<br />
As you become more familiar with your IT operations, you put<br />
yourself in a position to understand the internal and external<br />
risks to your data security, enabling you to update your security<br />
where necessary. This may involve a little spending, to ensure your<br />
compliance.<br />
Debtfree Magazine would like to thank SupraLex<br />
for their help in compiling this article. If you would<br />
like to learn more about PoPIA Compliance or find<br />
resources head over to:<br />
https://www.linkedin.com/in/supra-lex-70456316a/
DEBT VADER
WHY CONSUMERS ARE<br />
STILL NOT GETTING<br />
COURT ORDERS<br />
When they wrote the National Credit Act (“the NCA”)<br />
the lawmakers envisioned a debt review system that<br />
would ensure over indebted consumers could obtain<br />
assistance in rearranging their debt obligations (in a<br />
harmonised manner) that would lead to the eventual<br />
satisfaction of all their debt obligations.<br />
It was meant to be simple, and they thought everyone would just<br />
follow the regulations set out by the NCA and consumers would get<br />
their court order in a reasonable time. Instead, what we saw from the<br />
outset, and are still seeing, is the opposite. Thousands of consumers<br />
who have applied for debt review still do not have a court order and<br />
feel that the debt review process has failed them. The harsh reality<br />
is that this is true for more than 50% of consumers who have ever<br />
applied for debt review.<br />
Having identified that there is obviously a problem; we should try<br />
to identify the causes and then try to rectify them as best we can.<br />
Looking at the challenges in the current debt review process, there is<br />
not just one guilty party causing all the problems that can be blamed<br />
for everything. No, across the industry many different role players<br />
have to share at least some of the blame.
DEBT VADER<br />
Here are just a few of the problems that we commonly see:<br />
Debt Counsellors:<br />
Debt review, like most businesses, is driven by profit. Debt<br />
Counsellors would not bother to work in the industry if it was not<br />
possible to sustain a living from doing this work. With the current fee<br />
structure, signing up a consumer is more profitable than keeping a<br />
consumer, this means that when a consumer first gets introduced to<br />
debt review, he is often promised the moon and the stars.<br />
As soon as the consumer pays the Debt Counsellors’ fees, the<br />
incentive for the DC to continue providing excellent service,<br />
disappears. So, what happens? Disappointed consumers, who are<br />
entitled to the very best, especially when it come to their livelihood,<br />
often try to cancel the debt review process because of bad service.<br />
Credit Providers:<br />
The Act envisioned a debt review system where credit providers<br />
would act in good faith and eagerly participate in the debt review<br />
process. Credit providers however often fail to respond to Debt<br />
Counsellors’ requests for even a simple certificate of balance, and<br />
many simply fail to respond to restructuring proposals.<br />
Failure on the part of credit providers with these basic things,<br />
hinders the debt review process, which then leads to termination of<br />
accounts (by these same credit providers or others) and often results<br />
in consumers not being able to place certain accounts under debt<br />
review, which in most cases was the reason they applied in the first<br />
place.
Credit providers also commonly fail to cancel debt order requests,<br />
and allow their collections arms to continue harassing consumers<br />
even after they have applied for debt review. These actions on the<br />
part of credit providers lead the consumers to feel like the debt<br />
review process has failed them, and so they incorrectly blame Debt<br />
Counsellors and then try cancel their applications.<br />
The Courts:<br />
The courts play a crucial part and must ensure that the interest of<br />
all the parties are protected when hearing the matter. Certain courts<br />
however, focus more on technicalities than the merits of the case.<br />
These courts have very strict requirements that need to be complied<br />
with, before the court even bothers to look at the merits of the case.<br />
Certain courts for instance, require a certified copy of the consumers<br />
ID, even though all the other documents, (including those of the<br />
credit providers), confirm the identification of the consumer.<br />
These additional requests, even though they are within the<br />
Magistrates discretion, give the consumer the impression that they<br />
are not receiving the protection offered in the NCA. Many consumers<br />
struggle to find the time and finances required to meet these extra<br />
demands which they would not face in a different court. This can<br />
result in massive delays and many extra trips to the courts for the<br />
Attorneys trying to help the consumers and banks.<br />
National Credit Regulator:<br />
The NCR has a mandate to regulate the industry and, inter alia ensure<br />
the debt review process works. Years after the inception of the NCA,<br />
the problems mentioned above sadly still persist.
DEBT VADER<br />
The last task team report about debt review was done all the way<br />
back in 2009, over 12 years ago. Unscrupulous Debt Counsellors,<br />
who are well known to credit providers and other hard working Debt<br />
Counsellors, still somehow manage to operate in the industry. Greedy<br />
and inefficient credit providers still get away with debiting consumers<br />
after they applied for debt review, and courts seem to just add more<br />
and more requirements daily due to the Act not being amended to<br />
address such issues.<br />
These are just some of the reasons why so many consumers are still<br />
not getting court orders. There are others, of course. The result is that<br />
so many who have entered the process and are loyally paying off their<br />
debts can unfortunately end up thinking the process is not working<br />
(even though it actually is). This can make them think about dropping<br />
out of the process – which is an incredibly bad idea.<br />
All parties in the debt review industry have an obligation to try<br />
and help desperate, debt stressed South African consumers. It will<br />
take a concerted and ongoing effort focused on solving problems<br />
rather than personal rights or convenience to ensure that the NCA’s<br />
envisioned process is actually achieved. The question is, will it happen<br />
or will these issues simply continue to drag on and on?<br />
*The views expressed by Debt Vader do not necessarily reflect those of the Debtfree<br />
Magazine team. The purpose of the article is to spark debate and conversations around this<br />
topic for the betterment of the industry.<br />
To give Debt Vader a piece of your mind, send us a message for him at:<br />
DebtVader@debtfreedigi.co.za