Consumers guide to Prescribed debt and what to do when confronted with a threat of collection.

SEE ALSO : HOW TO HANDLE DEBT COLLECTORS ON THE RIGHT HAND SIDE OF THIS BLOG

The national credit act 34 of 2005 governs the processes and legal issues and rights of credit providers and consumers alike.  On 13 March 2015 an amendment was implemented to this act that has far reaching implications for Credit providers and consumers alike.  The following paragraph is the most crucial relating to this discussion of prescribed debt:

 No person may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies— which debt has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969); and (ii) where the consumer raises the defense of prescription, or would reasonably have raised the defense of prescription had the consumer been aware of such a defense, in response to a demand, whether as part of legal proceedings or otherwise.’’.

This in effect makes a criminal offence should a debt collector try to collect on this debt

Getting back to the Prescription act the following needs to be noted : ( for the purpose of this discussion I am not going into legal arguments about the act and this will suffice for now to initially determine the actions of CONSUMERS in cases where they are hassled by debt collectors. )

The act describes the specific debt that prescribes after specific time. The ones that we are not going to discuss here are debt covered by a mortgage bond, debt owed in terms of a judgment, debt owed to state departments and tax

The ones that create the most problems are amongst others the following:

1.    Personal loans and other forms of loans

2.    Credit cards

3.    Store accounts

4.    Gym membership

5.    Cell phone contracts

6.    And basically any other unsecured debt ( Debt where there are surety signatories are also unsecured and the rules will also apply to sureties )

The definition of prescription in layman’s terms is that should the last payment on this debt be more that 3 years old it has prescribed.  If an acknowledgement of debt has been signed since then the debt will only prescribe after 3 years from date of last payment on this “new debt”  If no successful legal action have been taken on this debt during the past three years the debt has prescribed.  Lawyers letters, s129 notices , threats and telephone calls and emails or letters from the creditor or an agent on his behalf(debt collectors or attorneys alike) does not stop prescription!

Actions of consumers when confronted with a telephone call from a debt collector

1.       You answer the call.
2. Caller asks you to identify yourself. NEVER DO THIS.  Your answer: “You called me, first identify yourself by giving me the following information: ( Write all this down diligently)  If during this initial discussion the party on the other  side wants to say or ask anything insist on them giving you the details – if this fails JUST PUT THE PHONE DOWN ! – They will soon get the message. 
a. “Give me your full name – spell it for me”
b. “Give me your telephone number”. Repeat to make sure you have it correct
c.  “Give me the full name and location of your firm – spell it for me.”
d. “Give me your email address – spell it for me.”
e. Thank them and say: I will send you an email

2.      

F     Follow up email :

(Compile your email along the following guidelines – You can add or delete whatever you think is applicable)

“Dear sir/madam

             This email is send without prejudice and with all rights reserved.  Nothing contained in this message constitutes an offer, warranty or representation from me. The contents herein are for discussion purposes only. Please note that I claim my rights in terms of  The national credit act 34 of 2005 as amended as well as the Prescription Act, 1969 (Act No. 68 of 1969 as far as might be applicable in this instance.

            Your call to me today refers.

1.       To enable me to properly respond to your call please supply me with details of the alleged debt that your call has relevance to.  Who was the credit provider, how did the debt come about and please supply me with a copy of the original signed credit agreement in this instance (This in terms of NCA 65(4)a & b)

2.     If you are a debt collector please supply me with your council for debt collector’s

     registration number as well as that of your company.

3.    I will need a detailed statement of the account to date hereof.

               

                  This in the first instance

               Greetings,    (Your name)

            Should you receive the requested documents you can now determine whether the debt has prescribed utilizing the definitions given in the first part of this post?  In that instance you send them the following email:

“Dear sir, Madam,

This email is send without prejudice and with all rights reserved.  Nothing contained in this message constitutes an offer, warranty or representation from me. The contents herein are for discussion purposes only. Please note that I claim my rights in terms of  The national credit act 34 of 2005 as amended as well as the Prescription Act, 1969 (Act No. 68 of 1969 as far as might be applicable in this instance.

           

It is evident from the documents you sent me that the debt has prescribed and your attempts at collecting this is an illegal act in terms of the amendment to the NCA that came into force on the 13^th day of MARCH 2015.  Please confirm to me that you will now stop harassing me with this issue. Failure to do that will force me to report your actions to the council for debt collectors and lay a charge against you with the South African police.

(if they did not supply you with their relevant registration numbers you can add the following)

Your non conformance to my request for your relevant registration numbers with the council for debt collectors are in breach of your service level agreement with the council and will also be mentioned in my complaint to that organization

Greetings, (Your name) “

One man's opinion on Life and Debt

The concept of debt is older than the written word.  I am reading an interesting book called

“Debt the first 5000 years” and on the first page I had a few revelations: (These are not something new yet we need to take cognizance of it)    Here they are in no particular order   ”If you owe someone money he owns you “    “You have enslaved yourself”    “You are going to regret this”    “You will be treated as secondary to the lender”  “There is no such thing as an ethical lender”

The reason for these posts are to enlighten debtors (that is you if you owe someone money) on some of the revelations I am on about and the first of those is this one “There is no such thing as an ethical lender”

Never ever think any of the slogans of any of the banks have your best interest at heart.  It does not.

If you ever feel abandoned the only thing you have to do is to miss a payment on a loan and see how many people will actually WANT to talk to you. 

Banks are Businesses. Businesses are in business to make money.  Everything else is secondary. They will do anything (UN) ethical in the process.   The African Bank debacle in South Africa is a classic example.

They enslaved hundreds of thousands of the poorest of the poor by LENDING THEM MONEY at the most ridiculous interest rates and then utilize a system called Salary emolument orders which is a (i)legal  and a most (un) ethical  system enforced through   (un) ethical bank staff, lawyers and courts in South Africa.

I read an article this morning by a lady by the name of Theda Muller called “When in debt, giving up is not an option”

She had the best of intentions  writing this.  I agree with around 90% of what she says. But and as far as I am concerned a “But” supersedes everything said before.   She is a bit out of feeling with reality.

The  MAIN problem I am having is this :   She wants you to trust your creditors and that is like standing in front of the bull and saying:   You are not going to charge me and then bend down and look him straight in the eyes.

Accept that they do not have your best interest at heart. They will stoop down to the lowest of low to get their money back.

I do not profess you should not talk to the bank when you are in trouble.  But be wary – You are looking into the eyes of the bull.

“ Dear Joe, we (do not) understand what you  are going through. Please fill this document out and we will present it to credit management and get back to you soon” The document has to be signed and contain clauses like “if I default again I consent to judgment”  “We do not have to give you any further notice”  “ I consent to you taking my vehicle back without further documentation”  There are a few 100 more of these legalspeak and (UN) ethical bankspeak clauses around. 

Life happens and so does challenges. Whoever said challenges comes in ones. It comes in pairs, in tens or even worse.   You lose your job, You get sick and use up your sick leave. And all your annual leave. All that is left is unpaid leave.  You get a new job at much less salary as before. You are the victim of BEE.  Etc. etc. 

The bank (might) believe you once. And offer you some relieve (on their terms of course) They might even believe you twice – if you bend down low enough and take a while to get up from your knees .

But life happens. 

I am not purporting to have the solutions -  I am stating the challenges that we need to find solutions to.

Institute of Debt Management

As concerned consumers I think the time has arrived that we critically look at some issues relating the "Credit" and  "Debt" and everything around it.

Amongst other things the following  need to be critically assessed and improved :

1.   The whole process of credit application and approval - The NCA has 

      guidelines and rules and regulations but these are very evidently not adhered

      to by most of the role players in the credit industry.

2.   The whole system of Debt review, "debt counseling" and the technical      

       application of this.

3.   The options open to debtors when they do not "Qualify" for debt counseling.

4.   Solutions to the debt crisis in relation to educating people in the budgeting process.

5.   The role of Financial advisors in the process of debt.

6.   The role of lawyers in the debt process. ( for and against debtors)

7.   Debt collection methods.

8.   Qualifications, registration and compliancy processes of the relevant role players

9    The influence of regulating bodies and to what extend do they exceed their powers ?

      (NCR, FSB, council for debt collectors etc etc )

The purpose of setting up the Institute of Debt Management and its structure:

1.    It will be a formal company. (not an NGO)

2.    It will contract with debt counselors and other suitably qualified individuals to deliver 

       services to  specific clients that will be assigned to them in terms or an agreement

      with the Counsel.

3.   We will not be dictated to by anyone - We will operate within the ambit of any

      and all  laws applicable

4.   We will not give advice directly to anyone - clients will be referred to a relevant 

      expert who will contract directly with that client as to the services he will be rendering

      and that expert will be receiving remuneration for his services as per his regulated fees.

       More details to follow shortly

The relevance of two definitions of “anomaly”

 

  “An anomaly is an abnormality, a blip on the screen of life that doesn’t fit with the rest of the pattern. If you are a breeder of black dogs and one puppy comes out pink, that puppy is an anomaly”

Debt is anomaly. Because most people accept that because the puppies born are nowadays mostly pink they accept that as the norm and not the anomaly.

Once you see debt for what it is you will also realize that the only way to get rid of the anomaly is to create another anomaly.

Let me explain:

Debt is an accepted norm. It is an addiction. Because of its perceived effects on lives it becomes a lifestyle. It can give a lot of pleasure (like alcohol) but in a lot of instances it becomes a massive problem and the only way you can eventually solve this problem is to use the second definition of an anomaly: Deviation or departure from the normal or common 
order, form or rule.

To be continued......................keep on watching this space

The Problem with Budgets and why people get over indebted

The concept of over indebtedness was placed in focus by the National credit act when they implemented the system of debt counselors whose main task is to determine whether an individual is over indebted and then make suggestions and implement a plan to eventually alleviate the problem.

This is all fine and well – except that this system implies an illness of which the main virus is DEBT.

All the gurus will tell you that the easiest ways to get out of debt is to not get into it. Debt is like alcohol.

You and me and most people we know will drink a wine ever so often and we will not become alcoholics

This is the same with debt.  People need to buy a house or a car which is big expense and that is why there is a thing called DEBT.

Now the best thing you can do when you are intending on buying  a house is to see whether your budget can handle it.  Most people I know do the maths in their heads and say “Yes!”  We can manage that.

Next is the car purchase.  And the personal loan that the bank told you to take out to furnish the house and “By the way...Here is a credit card for you to manage the little day to day expenses”

Sounds familiar?

What is wrong with this picture ?

THE LACK OF A BUDGET OF COURSE............

So you take my advice and draw up a budget..............

You will look at it once a month and say ...yea we are still all right!

Are you ?   

The problem here is the following: Unless that budget of yours is in writing and updated daily with every minute detail where money is concerned the Debt monster is somewhere in your future and the next thing you know you are in his trap !

Why are most dieting programs short lived and not working?   It does not become a lifestyle. You do not have a coach that will guide you  and to whom you are accountable.

It is the same with  budgets: If it does not become a lifestyle and you are not accountable to anyone it will fail – sooner or later

FOOD FOR THOUGHT:  Do not buy anything on credit unless it is in your budget. Every time you use your credit card it is debt being created and I will guarantee you that that purchase is not in your budget (Really?  Did you write it down beforehand in your budget?)

Debt's biggest problem is YOU !

Have I got your attention -  Ok   Just answer the following questions :

Do you know exactly how much money came into your account in June this year . Do you know how much you spend on food in that month? How much did you spend on restaurants and movies in that month? How much did you save that month for a rainy day?  Do you know exactly how much money is in your wallet right now ?  Do you know how much your nett worth has changed since June this year to the end of November this year?  Do you know how much the debt increased or decreased on your credit for the same period?  If you answered yes to 50% of these questions do not read further - You are bluffing yourself and you will not learn anything from from the rest of this post.

The biggest problem with debt is not creditors, debt collectors, summonses, judgments et all. The biggest problem is.....YOU !
Why is it YOU?
YOU are conditioned to think that your credit profile is the most important & sacred thing in this life - I Have news for you - It is not.
The most important & sacred thing in life is to be able to get the answers the the questions in the first paragraph on an ongoing basis within 1 minute.

You will cry foul - it cannot be done - If it can be done I have no clue how that is possible.

Here is the answer again in one paragraph.
The only way is to BUDGET and to keep to it - it is like slimming - it sounds so easy but it only works if you keep up with it - And having someone to account to helps a lot. Whatever you thought you knew about debt ...............I will guarantee you ......needs a 180 degree paradigm shift.

Want to know how to change your life forever ?   Join our first seminar in February 2015
If you do not agree with me at the end of the seminar that money is not the biggest sin - not knowing how to work with it is.............I will pay you all of your seminar fee back - immediately no questions asked!

johnbrandow@mweb.co.za

Consumers in action: Claim your rights:

 Pick up your pebbles and face Goliath.

In the preamble of the Consumer affairs act you find this gem:

The people of South Africa recognise—

That it is necessary to develop and employ innovative means to—

(b) PROTECT the interests of all consumers, ensure accessible, transparent and

efficient redress for consumers who are subjected to abuse or exploitation in

the marketplace; and  (c) to give effect to internationally recognised customer rights.

Service providers are in business for one reason and one reason ONLY: TO MAKE MONEY.

Do not be fooled by any Mission or Vision statements that might imply otherwise.

Due to this ultimate vision client service will always play second fiddle to their ultimate goal.

That is why you find companies like Cell C being prepared to pay Hundreds of thousands of Rand in legal fees to try and proof why they did not solve a client’s R5000 problem, a problem where the probability of the client being right was in the favour of the client.   

A recent yet unreported case between a bank and a client in the Eastern Cape found the bank in default in that they approved the finance on a home loan recklessly and the case was found in favour of the client. The bank has now found a technical point and the message is clear “we are losing cases because of so-called reckless lending” and “we will fight the tendency no matter what it cost us”

AS CAN BE SEEN FROM THESE 2 CASES THERE IS A CONCERTED EFFORT BY BUSINESS TO RATHER REMOVE THE “protect” portion from the above quote.

So what am I saying?  Consumers are being threatened, painted into corners, lied to , cheated, and about any other illegal and unethical technique  used to “ enforce our rights” by business.  And consumers as standing idly by and taking the blows and basically crucifying themselves rather than stand up and fight.

Join us in actions to counter this. 

Here are some actions that have been started and the more people get involved with it the more clout we are going to have to take on these unethical actions of corporates – especially banks

1.       The website www.legaltalk.co.za has all sorts of guidelines and links on how to handle specific situations – Debt, Rentals etc.  Make a point to put this website as a 

“Favourite” on your browser.    You might just find the answer to your problem for FREE!

2.      Join us in our Consumers in Action drive – a website for this will soon be available.  

 In the meantime follow the action on the blog     http://activeconsumers.blogspot.com/         

and get involved!