From Business Report March 12, 2008 By SLINDILE KHANYILE Durban – Some consumers misunderstood the purpose of debt counselling, perceiving it to be the means to escape their repayment obligations, South Africa’s four major banks and the national credit regulator (NCR) said yesterday. Three of the banks – Standard, First National and Nedbank – have […]
28 November 2012
The South African Banking Risk Information Centre (SABRIC) has warned consumers to be careful of false promises from Debt Counsellors who may be abusing their profession and the debt review process.
Luke Hirst, MD of Debt experts DebtBusters, says ‘Yes, I agree that some debt counsellors are not offering clients the full information upfront and therefore consumers do need to be careful and ask the right questions. It is imperative that consumers seeking advice make sure that they are fully informed of the Debt Review process and the implications.’
There are many debt solutions that are available to struggling South African consumers, Debt Review being only one. Consumers committing to Debt Review should be informed by their Debt Counsellor of the implications and the costs, one of which is that whilst under debt counselling no further credit may be taken out.
Hirst continues, ‘Debt Review may not always be the best solution for everyone struggling with Debt and it is the Debt Counsellors obligation to assess which solution will best suit their client. For instance, if you have most of your debt with one credit provider you should first try and see if that credit provider can help you directly.’
‘Consumers need to seek the assistance of a reputable Debt management company who have the infrastructure and support to service their clients, whilst at the same offering the client the best solution for their circumstances.’
According to Hirst there are 5 top questions to ask a debt counselling company before signing any agreement:
1) What is the Debt Counsellors registration number and how long have they been operating?
2) What are the fees and when are these payable?
3) Does my money go through an accredited payment distribution agency regulated by the National Credit Regulator?
4) Explain the calculation to show that I am over-indebted and therefore debt counselling is the best solution?
5) What infrastructure & skills do you have to ensure that I am looked after whilst under debt counselling?