Debtfree Issue 202406

SPECIAL
EDITION
DEBT REVIEW
TASK TEAM LAUNCHED
WHAT THAT MEANS FOR YOU
Issue 06 of 2024

EXCELLENCE IS DOING
ORDINARY THINGS
EXTRAORDINARILY
WELL
– John W. Gardner

WHAT MAKES US
EXCELLENT?
/ Unimpaired and automated PDA systems
/ Integration with top-ranked Debt Counsellor systems
/ Best customer support in the country – queries are resolved within 24 hours
/ Strong compliance and best-industry-practice implementation is at our centre
Call Saishen Krishnan
Head of Hyphen PDA | 071 884 7300
Or call our friendly support centre on 011 303 0060 - Option 2
or visit our website www.hyphenpda.co.za

FROM THE EDITOR
Outlook can make a big difference. Two groups
of people can be presented with the same set of
circumstances and yet feel totally different. This is
often true of those entering debt review.
Some who are in debt review complain they cannot get access to
more debt. Others are actually grateful they can’t get deeper into
trouble. They are tired of sinking deeper and deeper into debt.
Both face the same restrictions or circumstances and yet have
different outlooks.
I recently got to attend an industry event with lots of Debt
Counsellors. At first, it seemed similar to many other such events
but after a little while I began to notice something different.
It was hard to put my finger on at first and only by lunch time
had I figured out what was so different. Everyone seemed very
optimistic and upbeat.
Now, that is not to say that Debt Counsellors are dour people.
No, such meetings are often fun but the tone can tend towards
looking at problems and being somewhat frustrated about one
issue or another. With this event and the bubble of conversation
going on it was clear that something had shifted. For most it was
the mention of Task Team 2.0.

For those who do not know what that is, this issue of the
magazine has a bit of a look back at the 2009 NCR Task Team
about debt review and a new Task Team that has been launched
to tackle some industry challenges. Now the Task Team has not
yet accomplished anything as yet but still, the prospect of some
quick wins on industry matters seemed to have lifted people’s
spirits. They just seemed to have a more positive outlook.
Then a few days after the event I spoke to someone I have
worked with for many years and he seemed more pessimistic
than ever (I am a bit of an optimist myself in general). He is
really passionate about the industry but worries a lot about the
challenges he sees.
Same circumstances but different outlooks. It will be interesting
to see if the new Task Team turns his frown upside down.
In this issue, we do look at some things that are a bit worrying,
like Eskom’s plans. We also have some good stats about debt
review, news, reviews and some less good information about
what seems to be a smear campaign against debt review. You
may have seen in the press that not everyone is super positive
about debt review right now but we consider why that may be.
If you work in the industry, you may have noticed a few more
requests for you to complete one of the Debt Review Awards
peer reviews recently. The in-depth reviews are on the go and
we want to thank everyone who is taking part. They only take a
couple of extra minutes but really do help identify those who are
going above and beyond.

If you have participated in the past or visited the Awards website
then you will know some of the criteria that are used to evaluate
different parties. We do not want these shrouded in mystery and
want to make sure everyone knows how everyone is evaluated
each year. We have organised a 3 part series in the magazine
(over this and the next two issues) that discuss these in a bit more
depth. Be sure to also visit the YouTube Channel and Awards
website from time to time where you can catch some videos
about the criteria as well.
Debt review works and has helped hundreds of thousands of
people deal with their debt successfully. Debt review is currently
putting over R1.5 Billion back into credit providers pockets each
month. Amazing!
Credit providers have a shocking serious drop off rate of around
37.6% in their business right now. That’s people who have taken
credit but end up 3 months behind on payments (the rate for those
missing one payment is even higher). These millions of people
need options. They need hope. They probably need debt review.
So, if you are in the process then only YOU get to decide whether
you focus on the positives or negatives of debt review. We suggest
focusing on the positives, naturally. It will make you happier. But
love it or hate it please do make your debt repayments this month.
You will find that the light at the end of the tunnel gets brighter and
brighter every time you take a step closer to being debt free.

DEBT REVIEW
BASA
The Banking Association of South Africa
who are known as BASA represent the
various banks who operate in South Africa
with a banking license.
The association advocates the views of its
member banks on legislation and social
and economic issues. There are currently 32
members.

FROM THE
DESK
DEBT A BURDEN? WHY FREEZE
OR FLEE WHEN YOU CAN FACE
UP TO THE CHALLENGE AND
BE FREE.
DebtBusters is often asked by
leading media reporters and
stakeholders why more consumers
don’t come forward for debt
counselling. The answer stays
complicated.
We have a very sophisticated and large
economy. South Africa also has a large formal
sector and a large informal sector. The size
of the informal sector which is largely cashdriven
is hard to measure.

25 - 28 million adults are credit active. The National Credit Regulator’s
data in quarterly publications reports that 8-10 million people are in
arrears. That means that, either by choice or by circumstance, they
have defaulted on one or more loans. That is a sign of financial strain.
“When you add all these things in our context, the economy hasn’t
meaningfully grown. Since 2017, employment figures have been flat.
Employment as well as real wages haven’t kept up with inflation. After
severe lockdowns, all this combined means if there are 25 million
consumers that are credit active, somewhere between 8 - 12 million
consumers are showing financial strain.“
Psychology plays a role. Often people will choose one of three options.
They will freeze, run away from the situation, or deal with the situation.
Dealing with debt is difficult. All these factors play a role in helping us
understand why people are not choosing to seek help in dealing with
their debt by default or necessity.
Consumers who do choose to address the burden of debt through
debt counselling, enjoy the benefit of cash-flow increases, legal
protection of their assets and the ability to have one, easy consolidated
debt management plan.
Over-indebted consumers who successfully complete debt counselling
also have, on average, significantly higher credit scores than those who
consider it, but do not proceed.
Many clients who successfully complete debt review and obtain
their clearance certificates, manage to secure vehicle finance within
2 months and a new home loan within 5 months. For dedicated
consumers, debt review can help turn around their long-term
financial standing.

No more debt-stress.
Let’s get it sorted.
We’ll get your interest rates right down. You’ll
make one consolidated payment a month. You’ll
have more cash to live on. Your assets will be
legally protected. Sorted.
0861 365 910
www.debtbusters.co.za
info@debtbusters.co.za
NCRDC2484

CONTENTS
NCR DEBT REVIEW
TASK TEAM
LAUNCHED
BANK EXECUTIVES
SAYING BAD
THINGS ABOUT
DEBT REVIEW
GET READY
FOR A
SHOCK!
NEWS
SERVICE
DIRECTORY
DISCLAIMER
Debtfree Magazine considers its sources reliable and verifies as
much information as possible. However, reporting inaccuracies
can occur, consequently readers using this information do so
at their own risk. Debtfree Magazine makes content available
with the understanding that the publisher is not rendering legal
services or financial advice. Although persons and companies
mentioned herein are believed to be reputable, neither
Debtfree Magazine nor any of its employees, sales executives
or contributors accept any responsibility whatsoever for their
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us by advertisers which does not necessarily reflect the views
and opinions of the Debtfree Magazine team. No person,
organization or party can copy or re-produce the content
on this site and/or magazine or any part of this publication
without a written consent from the editors’ panel and the
author of the content, as applicable. Debtfree Magazine,
authors and contributors reserve their rights with regards to
copyright of their work.

NCR DEBT
REVIEW
TAS K
TEAM
LAUNCHED

NCR DEBT REVIEW TASK TEAM LAUNCHED
A LITTLE HISTORY FOR
CONTEXT
Years ago, a special NCR task team
helped get the jammed wheels of
debt review turning again.
The announcement of a brand new task
team has many in the industry very excited.
It may result in benefits for consumers, credit
providers, the NCR, NCT and Debt Counsellors.
When debt review started back in 2007,
the only guidance people had was the
wording of the National Credit Act and the
regulations. While that may seem like plenty,
it quickly became obvious that not everyone
understood the words in the same way.
That’s not uncommon for new legislation.
Every court across the country is full of people
fighting over various matters, using the exact
same set of laws, some of which have been
around for decades. The question is: who has
the correct understanding? This was true in
the debt review space as well.

Though lots of people signed up, not all Debt
Counsellors did things the same way. Not all
credit providers responded in the same way,
or used the same forms. The courts all had
different ideas about debt review (some still
do) and it was basically chaos.
As the number of consumers who signed up
began to grow, many people were left with
their matters unresolved. A serious problem
was brewing and by 2009 everyone could
see something had to be done, but what and
how?
The solution was for a small NCR guided task
team to:
(1) identify everyone involved in
the process and what they were
responsible for;
(2) identify the various problem areas;
and
(3) make suggestions on how these
could be worked out if everyone
just played nice.
The suggestions required everyone to meet in
the middle, and make some concessions, but
the end result was a plan to overcome most of
the issues slowing things down.

NCR DEBT REVIEW TASK TEAM LAUNCHED
THE CURRENT
LANDSCAPE
At the moment, the industry is facing many different
challenges. Some are nuanced and seem small, but
have a big knock on effect and others are so big no one
knows what to do about it.
The Economy in General
There is a massive need for debt stressed consumers to get help.
Millions of people across the country are skipping debt repayments
every month.
High interest rates and high levels of indebtedness mean consumers
are not going to the shops and spending money. Businesses are
starting to worry if they will make ends meet each month, the money
is just not moving.
Credit providers are struggling to find consumers to lend more
money to, as most people cant realistically afford more debt. Young
people are not getting jobs, and as a result can’t be given credit.
Credit Providers need to recover their existing credit from non-paying
clients and want more credit active clients. In the debt review space,
there are some key issues as well.

For example, at present there are around 1.3 million people
who have signed up for debt review but have not finished it.
Of those, it seems only 245 000 are actively getting help from
a Debt Counsellor, and paying off their debts via a PDA each
month. So… how do you help the 1.1 million people to get
back into regularly paying their debts?
Consumers who sign up and then quickly change their
mind find they are “trapped” with a debt review flag at credit
bureaus, and get cut off from their usual credit cards etc.
People “trapped” in debt review limbo for a number of years
due to falling off the program, are being scammed by people
offering ‘get out of debt review’ services or some sort of debt
mediation scam. Many are losing thousands of rand to such
scammers.
Debt review consumers stay out of the credit market for 5
years in general. Yes, they are paying off their debts but credit
providers would like to see them back in the normal credit
market sooner, if possible.
Consumers who enter debt review often have to wait years to
pay off even a small debt. This is due to the way payments are
spilt up. No quick and easy wins, just a long grind for 5 years.
People in debt review currently can’t get a cheaper car or
cheaper house which they might actually be able to afford due
to concerns over offering debt review clients new credit, and
that being called ‘reckless’.

PDAs who supply services to consumers and Debt Counsellors
alike have not had realistic fees for several years. In retrospect,
past changes were overly harsh and cut their revenue to
unsustainable levels for the services they offer. If this is not
addressed soon, it will impact the 245 000 people trying to
pay off their debt.
The list goes on and on, and once everyone has had their input, the
Task Team will have its work cut out for it. What to prioritise, what
to focus on, which items have simple solutions and which are more
complex and may take time?
The idea currently seems to be that the Task Team will suggest the
fast and easy wins, and other items may go on to be discussed in
more detail over time at CIF.

NCR DEBT REVIEW TASK TEAM LAUNCHED
WHAT IS THE
CIF?
Many think of the NCR’s Credit Industry Forum as a sort
of task team by committee. It is a group organised by
the Regulator who meet and discuss possible solutions
and changes to the NCRs guidelines on industry topics.
The members come from different parts of the industry, such as Debt
Counsellor and credit provider associations. These are parties actively
looking to make the process faster and easier for consumers.
The CIF has tackled many issues over the years, and the NCR has put
out several guidelines based on those discussions (where there was
some sort of consensus).
While not legally binding, these guidelines are often adopted by the
majority of industry parties, and this can help overcome common
problems (just like the Task Team is designed to do).
There has been discussions about an annual Task Team to look for
quick solutions with other matters being handled by CIF.

NCR DEBT REVIEW TASK TEAM LAUNCHED
HOW WILL IT WORK
AND WHEN?
We are still waiting to hear more
details, but the proposal for the Task
Team was well received at the last big
CIF meeting, and given the go ahead.
In the past, the Task Team consisted of 3 or 4
very experienced industry experts (so not a big
committee) who were able to talk to others
in their field, and drum up support for the
initiatives suggested.
One of the possible goals of the Task Team is
to be able to present some sort of report to
the NCR which might then make its way to
the DTI in the months ahead. With new role
players at the DTI, there is hope for fresh eyes
to prioritise changes to the National Credit Act
or regulations in the future.

NCR DEBT REVIEW TASK TEAM LAUNCHED
HOW WILL THE TASK TEAM
HELP YOU?
This may just sound like a bunch of
boring meetings, but it will probably
impact on everyone involved in debt
review, from consumers to Debt
Counsellors in one way or another.
The Task Team will hopefully be able to move
faster than most of the CIF committees in
the past. Rather than going months between
meetings, a focused series of quick meetings
and input from all across the industry might
see some much needed changes come in
within a year.
Credit Providers may find ways to get
clients back into the normal credit market
faster.
Credit providers may find Debt Counsellors
more readily able to make use of the DCRS
system or additional versions of it.

Debt Counsellors may find they are
able to attract more clients due to
improvements in the process.
Consumers with a debt review status at
credit bureaus may find some relief or a
way back into meaningful debt review.
PDAs may find some promise of a more
sustainable business model.
Attorneys may find the courts are helped
to handle matters faster or more work at
the NCT.
Insurance providers may see additional
support for policy substitution.
Consumers in debt review may find they
are able to stay in the process throughout
because of a reviewed look at the cost of
living increases while in the process.

NCR DEBT REVIEW TASK TEAM LAUNCHED
3, 2, 1
LIFT-OFF
Whatever happens there is now a
feeling of optimism in the industry
which has been lacking.
All parties who help consumers through debt
review are excited that things might once
again be easier, after the Task Team has done
its work.
Though it won’t be perfect, and unlikely to be
the last time such measures are needed, it is
likely that debt review is soon about to get a
nice boost.
All parties are encouraged to submit
suggestions and feedback to the NCR Task
Team when it’s requested.

BANK
EXECUTIVES
S AY I N G
BAD THINGS
ABOUT
DEBT REVIEW

SAYING BAD THINGS ABOUT DEBT REVIEW
WHAT’S
GOING ON?
Lately, some people who work for big South African
banks have been vocalising their dislike of debt review.
Certain people at Capitec Bank and Nedbank, in
particular, have been pushing rather negative stories
about it in the media.
This has resulted in recent articles on MoneyWeb, and Business Day
with negative headlines. When someone reads these articles, or even
just the headline, they tend to have a bad impression of Debt Review
and Debt Counsellors. Many of the articles mentioned above have a
negative message about using debt review to pay off debts.
Why do we sometimes see comments like this from Senior Executives
of the big banks, while the very same banks have entire debt review
departments that are helping bring in R1.5 Billion each month through
debt review?
These debt review departments love debt review, but some
executives from other departments run around bad mouthing debt
review, it may not make sense to you.
Let’s look behind the scenes and see what might really be going on.

SAYING BAD THINGS ABOUT DEBT REVIEW
THE LOW DOWN ON THE
REAL REAL...
Capitec Bank CEO, Gerrie Fourie, has been leading the
charge of negative comments recently. While having to
deliver less than fantastic stats about how the bank is
performing, he has also been claiming that debt review
is (1) shrinking the credit market and (2) hurting clients’
chances of getting credit in the future.
Why might he be saying that?
Well, many Capitec clients actually do need debt review. In the last
two years, they’ve set aside an extra +- R1 billion in provisioning,
because some of their customers are struggling to pay what they
already owe, and are entering debt review. Their total debt review
provisioning now stands at R6.3 billion, that’s a fairly large amount of
money.
Capitec also notice that many people who start debt review, often do
not finish the process, and because the credit bureaus keep a record
of the debt review even though the consumer stops working with a
Debt Counsellor and stops paying via one of the 4 NCR registered
Payment Distribution Agents (PDAs), credit providers are scared to
lend them more money.

They are worried they are later told they have been “reckless” in their
lending, resulting in the consumer not being forced to repay that
credit. So, often they tell the consumer they can’t help them. This
does upsets the consumers who are forced to carry on paying off
their debts (but without the benefit of a Debt Counsellors help and
all the amazing benefits the banks offer via debt review). These dropout
consumers are stuck living with the consequences of their bad
choices, and it really stings.
But is Mr Fourie correct in saying that debt review hurts consumers’
future prospects of getting more credit?
While these consumers are listed at the bureaus, and are forced to
pay off their debts, they can’t go around making more debt. But what
about later down the line?
Interestingly, the National Credit Act actually requires that once a
person’s debt review is completed and all their debts are paid off, the
record must be removed from credit reports, so, no future problem.
The only possible way then this might hurt the consumer, is if Capitec
internally keep records and then illegally discriminate against the
consumer for having entered debt review in the past.
The National Credit Act also makes it illegal to discriminate against a
consumer who uses a provision of the Act to deal with debt or credit.
So, the only way this might be true is if the bank decides to break this
law – which they obviously would never do
So, the comments made are strange and seemingly have little
foundation in reality.

SAYING BAD THINGS ABOUT DEBT REVIEW
SHOOTING THEMSELVES
IN THE FOOT
While loudly complaining that people are now repaying
their debts to the bank in a responsible and regular way
through debt review, Capitec admits that they’ve cut a
lot of people off from credit, by being very cautious in
lending.
Could this be real reason why they have seen a decrease in potential
clients (not because of debt counselling)?
After several years of that policy, Capitec Bank have now been quite
public in saying they plan to loosen these restrictions, and start to
offer more credit to people with a higher risk profile in an effort to
scoop up more clients before their competitors do.
It seems a bit contradictory and biased to criticize debt review as
being a bad thing, while planning to lend more to riskier clients to
drum up more business.
Another vocal executive has been Nozizwe Tshabuse from Nedbank
Client Debt Management & Recoveries (Retail and Business Banking
not the Debt Review Department) who also had some rather negative
things to say about debt review.

She has been quoted saying that debt review can (1) hurt credit scores
and (2) affect young people who want to buy homes in the future.
Isn’t this a bit misleading?
Yes, debt review is noted by credit bureaus while it is happening,
but so is any debt or missed payment. Missed payments on debts
will definitely show up on people’s credit reports. And we know that
over 40% of credit users are months behind on payments or miss
payments regularly. This negatively impacts on their credit scores
much more so than by paying off their debts regularly each month via
debt review. Admittedly the credit bureaus systems are weak and they
do not report on debt review incredibly well. It could truthfully be
much better.
And once again the same facts apply: once all debt is paid off through
debt review, the record is cleared.
So, why the weird comments?
Could it be because they want customers to use their new 8-month
old internal department which was specifically set up to try reduce
their own clients’ debts?

Did You Know?
Nedbank have a page on their website titled:
"How to get out of Debt Review"
Standard Bank have a page about debt review with a
form that offers their debt review.
(DCASA have approached them to change this wording as it implies
SBSA offer debt review)
Capitec Bank has a webpage that says:
Our experience shows that 75% of people under debt
review experience no long-term benefits afterwards
despite paying all the debt review fees.
Under debt review: You won’t be able to get any new
credit for up to 10 years afterwards
Note: These webpages are not run by the bank’s debt review
departments.

SAYING BAD THINGS ABOUT DEBT REVIEW
WHAT WE KNOW DOES NOT WORK FOR
CONSUMERS & BANKS
The problem for the economy and consumers is that
bank-run debt recovery departments naturally focus on
individual debts owed just to the bank in question, not
all of a consumer’s debts.
While it makes sense that banks want to get as much of their debt
repaid as possible without consumers entering debt review and
having to share, what about all the other credit providers?
Surely, they would also like to be repaid.
Debt review is a fair way to share the consumers’ available funds with
all who are owed, without bias.
Debt review also helps consumers realistically manage and repay their
debts every single month without too much strain. In the past (and
even today) collections agents often demanded unrealistic repayment
amounts or wanted the consumer to ignore all other credit providers
and focus on their debt.
It has proved to be a short-term and short-sighted strategy.

Facts:
• Debt review doesn’t stay on credit records once the debts are
settled, so does not prevent further access to credit
• Banks who discriminate because of debt review in the past
would be breaking the law
• Debt review creates a fair spilt of the consumer’s available funds
for all credit providers
• Debt review budgets make sure consumers can realistically repay
what is promised every single month

SAYING BAD THINGS ABOUT DEBT REVIEW
A WORRYING
TREND
Some executives, like Gerrie Fourie,
say that people are joining the
process due to the amazing benefits
that you get while paying off your
debts through debt review. Mr Fourie
worries that the adverts people see
focus only on the benefits and not
the fact that people have to pay off
their debts.
Well, marketing is something that the industry
is talking about internally but, we need to
remember that only a consumer who cannot
afford the essentials for their family and at the
same time cannot pay all the debts they have
each month can legally qualify for debt review.
This is verified when a Magistrate has a look at
the math and confirms that this is the case.

So, if that is true and the Magistrate agrees,
then we need to ask: should consumers who
are stuck in this tough situation be barred
from using the law to force the banks to play
fair because of the wording of an advert?
Their legal status is still factual.
If they are actually over-indebted, then should
they stay in the financial mess they are in just
to keep the banks from having to set money
aside to provision for their debt?
Just as a reminder, Capitec Bank makes
around R60 million in profit every single day,
they have not run out of money.
Also, all consumers who enter the process
have to fill in forms and provide information
and agree to the terms and conditions of the
process (like paying off debt instead of making
more).

SAYING BAD THINGS ABOUT DEBT REVIEW
DEBT REVIEW IS A SOLUTION
NOT A PROBLEM
While we can feel sorry for the
massive banks (who are making
around R15 Billion in pure profit
each month) when they say they are
worried about finding more clients,
we do have to balance that with the
purpose of debt review.
The core idea is to get those banks their
money back, and each month around R1.5
Billion is being repaid to credit providers
through debt review, so it is working very well.
On the other hand, the consumers involved
are experiencing massive stress relief and are
happy to be able to realistically pay what is
now asked.
It is win/win.

SAYING BAD THINGS ABOUT DEBT REVIEW
IT MAKES DEBT COUNSELLORS
SAD
When Debt Counsellors see negative stories in the
press from some bank executives, they wish the media
had rather spoken to the banks own debt review
department, who know and understand the debt review
process.
These very hard working members of the bank’s teams are helping
recover billions of rand each year in a reasonable and manageable
way, from consumers who want to pay off their debt.
These special departments are experts at helping consumers and
Debt Counsellors get arrangements in place. Wouldn’t it be nice of
the press spoke to them rather than those who may have alternative
agendas?

DEBT REVIEW
THE DCASA CONFERENCE
The Debt Counsellors Association of South
Africa (DCASA) represent the interests of Debt
Counsellors and their clients in the industry.
The association has an annual conference in
Gauteng for members during August.
The conference features lots of speeches and
presentations about debt review and how
members can effectively help their clients get
the most out of debt review.

GET
READY
FOR A
SHOCK!

SAYING BAD THINGS ABOUT DEBT REVIEW
ESKOM’S PROPOSED
TARIFF HIKE
Hold on to your wallets everyone!
Eskom is gearing up to ask the
National Energy Regulator of South
Africa (Nersa) for some whopping
electricity tariff hikes.
Yes, Eskom are hoping to get a scary 36.15%
and even a jaw-dropping 43.55% increase for
some customers next year.
These shocking figures come from a leaked
draft document detailing Eskom’s financial
plans for 2026 - 2028.

SAYING BAD THINGS ABOUT DEBT REVIEW
WHAT WILL THAT
COST YOU?
If the planned increases goes
through (which is not really likely),
you could see your monthly
electricity bill skyrocket by up to
R2,500, depending on how much
power you use.
For the average household that uses around
900 kWh, this could mean an extra R1,600 a
month.
Yes, you heard that correctly, so, you better
hope your boss is looking at raises for next
year, or be prepared to turn some lights off at
night.

SAYING BAD THINGS ABOUT DEBT REVIEW
IT MAY NOT BE
THAT MUCH
Experts are saying that people should not panic just
yet, as Nersa has seldom given Eskom what they have
asked for.
Remember the 2023/24 increase request of 32%? Eskom was only
granted just over 18%. Of course that increase has still hit many
people hard, and people across the country decided cold showers
were just what they needed this year.
It is clear that Eskom needs more money to stay in business, and not
go running to get a bailout every year. So, in order to get that, they
are going to have to put prices up, while cutting down on corruption
and wastage.
With more and more people trying to cut dependence on Eskom’s
dodgy electricity supply, they are ending up with less paying clients or
clients who are paying less. So unfortunately, prices must go up.
Still, while we might not be looking at the full 36.15% increase, brace
yourselves for another hefty increase and one that is likely to be in the
double digits again.

SAYING BAD THINGS ABOUT DEBT REVIEW
AND COUGH
PLEASE
Here are some rough examples of what that might
mean if Eskom did get the slightly unlikely 36.15%
increase:
600 kWh per month
2024 bill R3,097.92
2025 bill R4217.82
Increase
+ R1,119.90
900 kWh per month
2024 bill R4,402.20
2025 bill R5,993.60
Increase
+ R1,591.40
The proposed hikes still need to go through public comments and
hearings, so there’s a very high chance for pushback. But one thing’s
for sure: electricity is about to get a whole lot more expensive, better
start saving those rands!

JOBURG PRE-PAID
PAIN
Joburg pre-paid electricity users
must prepare for an extra R230
service fee from July onwards
While everyone is talking about how
Eskom is putting up prices for the
electricity we use, people who are on
pre-paid in JHB are about to get hit with
an extra fee, just for having access.
Many users switched to pre-paid as it
was known to be cheaper. Now it seems
Eskom want to close that gap, and make
pre-paid access less affordable than it was.
And just so you know, Eskom was
planning on asking for R550/ month
extra, but that was later reduced to
R230. In more bad news, there is also a
pending 17.9% tariff hike on the actual
electricity that may shortly come into
effect city-wide and again next year too.
Debt Counsellors and credit providers
should take these hikes into account
when looking at consumers’ budgets
and calculation software like DCRS.

DEBT REVIEW
The Debt Review Awards
Every industry has an awards event.
The debt counselling industry is the same. Each
year Debt Counsellors, Credit Providers, Payment
Distribution agencies and more are recognised
for their hard work at a modest event in October.
The event is live streamed over YouTube for those
who can’t be there in person.

YOUNG
SOUTH AFRICANS
STRUGGLING
TO GET RETAIL
CREDIT

STRUGGLING TO GET RETAIL CREDIT...
THE STRUGGLE IS
REAL
Young South Africans are having a tough time getting
retail credit these days.
Most young people tend to enter the credit market by opening a
store account with one of the main retailers. Their parents or friends
encourage them to start building a credit profile, by buying a few
pieces of clothing on account and paying it off responsibly. Later on,
these young consumers begin to get access to bigger credit as they
enter the workforce.
Of course, things have changed over the years and particularly since
the Covid Pandemic. Retailers and banks are less likely to grant young
people credit. Retailers are currently giving out about 40% less credit
to first time applicants compared to before.
The problem is that this portion of the market is very risky, although
they access smaller amounts of credit. According to Experian, the
default rate for young people with credit is currently around 16.8%, not
great. Still, it is better than it was last year when it was sitting at 21.9%.
You can see the risk profile of lending to these young people is high,
and most credit providers have been very strict with avoiding risk
recently. They simply cannot afford to lend to those who won’t repay
in the wake of the pandemic.

STRUGGLING TO GET RETAIL CREDIT...
HOW DO YOU BRING YOUNG PEOPLE INTO THE
CREDIT MARKET?
Holding back from lending to young people creates a
bit of a negative loop.
If you do not lend to young people, and teaching them to be
responsible credit users now, then you do not know if you can lend
them bigger amounts in the future. Also, if you don’t lend to them
now, they may never come back down the line. The competition for
new credit users is tough.
Normally, about 80% of young people’s credit is tied to retail and
clothing store accounts, showing they rely heavily on this type of
credit.
And with the retailers holding back on granting these young people
credit, they are either shopping elsewhere (dropping sales) or using
other sources of finance, like money from the banks (who then make
the profit on the credit). So, retailers are also stuck in a tough spot.
Will they lend or not?
Recently some banks, like Capitec, have said that they intend to
loosen the requirements and are now prepared to start taking on
slightly more risky clients in an effort to grow their book. Retailers
may have to follow suit as across the industry their sales have shrunk
dramatically due to consumers running out of disposable income.

STRUGGLING TO GET RETAIL CREDIT...
SLOWLY
DOES IT
If you are a young person (or have
teenagers at home) then learning
how to make smart use of credit is a
crucial life skill that you sadly will not
really learn at school, or until you do
get access to some credit.
So, when you do get access to credit, try to
use it as an opportunity to learn to manage
your finances well. Don’t get carried away
overinvesting in your drip and then have to go
to the folks for money to pay your creditors.
Slowly does it.

The annual Debt Review Awards
gala will be live streamed from the
in person venue in Cape Town on
Friday the 18th of October 2024.

The results of the annual Debt Review
Awards are based on an industry peer
review, where those who are registered
with the National Credit Regulator
are invited to rate the performance of
their peers on the opposite side of the
industry. So, a Debt Counsellor will
review the performance of a credit
provider and vice versa.
But what are the criterion?
Over the next 3 issues we will look at the start, middle and end
of the process and some of the criterion that are considered.
The Start of the Process
Credit providers and Debt Counsellors are evaluated on slightly
different criterion due to the different functions they perform.
Here are some of the criterion that are considered in the indepth
reviews that begin in the 3rd section of the annual
reviews.

Credit Provider Criterion
• Providing CoBs timeously (with all required
information)
• Sticking to required industry turnaround times
• Cancellation of Debit Orders
• Stopping Collections Harassment
• Professionalism of correspondence
• Staff knowledge of the process
• Incidence of frivolous counter proposals
(including of DCRS proposals)
Debt Counsellor Criterion
• Clients who start the process (17.2 received)
actually making payments by month 3
• Sticking to required industry turnaround times
• Professionalism of correspondence
• Staff knowledge of the process
• Proposal quality
(optional use of DCRS proposals is also included as a
criterion for some who make use of the software, this is
not factored in for those who do not use it)
• Balancing Client Rights with Credit Provider Rights

Note: The wording or phrasing on the questions that cover
these criteria may shift or change slightly to help balance the
results, but the core criterion are the same.
These are some of the criteria that cover the start of the
process. Next issue we will delve into some of the criterion
that cover the middle of the process. Since debt review
can take up to 5 years, this covers the largest section of the
process.
We hope that you will be able to join us during the YouTube
live stream of the event on the 18th of October 2024.
Head over to the YouTube channel so long to subscribe and
watch other interesting videos about debt review:
https://www.youtube.com/@debtfreemagazine

BREAKING
NEWS

NCR ISSUES NEW
GUIDELINE ABOUT
INSURANCE
People who enter debt review often decide
to swap the insurance built into their credit
to a new lower cost supplier. These specialist
insurance providers provide special cover for
those in debt review in case they lose their
jobs, become unable to work or even cover the
entire debt if they die.
Credit providers often make decent profit on insurance on
credit since few people claim. Lower repayments for this
type of insurance can free up funds to rather be spent on
food or on debts.
Some credit providers have been very difficult when it comes
to swapping insurance because they do not want to lose
the revenue stream (and knowing that debt review clients
are so good at paying every month).

Some credit providers say that insurance can only be
swapped when the credit is first taken out. The new guideline
referring to the Credit Life Regulations of 2017 says:
4.2. Where a consumer exercises the right in
terms of Section 106(4)(a) to substitute a credit life
insurance policy of the consumer’s choice at any
time after the credit agreement is entered into,
the credit provider must accept such substitution,
provided that the new policy provides at least the
benefits referred to in Regulation 3.
So, the NCR would like all credit providers insurance
departments to stop playing games and swap the insurance
at any time when the consumer asks (for example, if they
enter debt review and then decide to change insurance
providers).

DCASA ANNOUNCE
CONFERENCE DATE
The annual Debt Counsellors of South Africa
Conference will be held on Friday the 23rd of
August 2024.
The Conference will once again be held at the popular
Birchwood venue which has been used previously. The
venue is spacious with plenty of parking and a catering area.
Sponsors will be on hand to interact with guests who can
look forward to various speeches and presentations.