When Amanda’s debt became too much for her to handle, she went to a debt counsellor to help her out. Debt counsellors are supposed to help people deal with complex debt situations, helping them to manage their finances and eventually become debt-free. They can help get reduced interest rates on credit agreements so that you can afford to pay off all your debt as soon as possible. But Amanda’s debt counsellor had other plans – shady plans. Instead of helping her out of her debt, he ignored her creditors and charged her ridiculous “collection commission” fees. He ignored one of her creditors and they ended up repossessing her car. Now she has to pay to take the taxi to work every day when she’s already struggling with her money. AZIKHIPHI! That’s not on! Debt counsellors are entrusted with the responsibility of helping people, not making their situation worse.
Scorpion Legal Protection’s specialists advise Amanda on what she can do.
Scorpion Legal Protection’s advice
Firstly, “collection commission” is illegal, and debt counsellors cannot charge this kind of fee. Amanda can refuse to pay this.
Next, she should fill out a Complaint Form 29 on the National Credit Regulator’s (NCR) website (ncr.org.za/act/list-of-forms/category/31-complaint-forms) to lay a complaint against the debt counsellor. Debt counsellors must be fully qualified and registered with the NCR. She can also phone the NCR on 0860 627 627 to lay a complaint.
Secondly, Amanda might have to take the legal route, especially if she’s been charged illegal fees she wants to get back. Debt counsellors must be held responsible if they do not look after their clients properly. If she wants to take legal action, she’ll need to hire an attorney to investigate the situation. Because Amanda’s vehicle was repossessed as a result of the debt counsellor not making payments to the bank, Amanda can also inform the bank that she was under debt review and provide proof to the bank that it was the negligent conduct of the debt counsellor that the bank was not paid and not of her own doing. The bank could investigate this and release the vehicle after entering into a new payment arrangement.
Tips:
- Check every month that the proof of debt review payment is provided to you by the debt counsellor
- Make sure you pay exactly what you promised to, don’t leave a cent out
- A debt counsellor is usually not a lawyer and when legal action is taken, they are not in a position to assist. You will need a lawyer for Magistrate's Court cases and in the High Court – usually regarding a car or house – you will have to make use of an advocate too
- The consumer is always in charge of their finances and any changes must be discussed with the consumer. An attorney is not allowed to make decisions in court on behalf of consumers or debt counsellors
- It is your responsibility as the debtor (person who owes money) to request distribution statements from the debt counsellor
If you have a query, follow us on our Facebook page and ask your question during our next Live Q&A (every first Thursday of the month).
* This is only basic advice and cannot be relied on solely. Names have been changed to protect identity.