The National Debt Mediation Association’s latest quarterly report shows that 531 new cases of debt mediation were opened in the first quarter of this year.
While this is a 19% decrease compared to the last quarter of 2012 where 659 new cases (excluding bulk cases) were opened, the NDMA experienced a 33% upsurge in calls to its Helpline from 2074 in the last quarter of 2012 to 2318 in the first quarter of 2013. The decline in the number of cases is seasonal as January is a quiet month.
“The type of enquiries dealt with indicate that consumers are struggling with a range of complex issues when it comes to credit,” says NDMA CEO, Magauta Mphahlele.
“The NDMA Helpline agents are knowledgeable and are therefore able to empower consumers with relevant information of how to resolve an issue and where to go for assistance.”
She says the increase in calls handled by the Help Linecan be attributed to a new SMS call back channel introduced for consumers in January 2013 as well as advertising at taxi ranks and media activities, which has made consumers more aware of the NDMA and its work.
Most calls were of a general nature (22%); or about debt counselling (20%); credit bureaux (13%); garnishee orders (8%); and debt consolidation (5%).
With regards to mediated cases, the NDMA closed 863 cases compared to 679 in the last quarter of 2012, representing a 27% increase in the number of cases closed.
A highlight was that 72% of resolved matters were found in favour of the consumer. In favour means that a consumer was provided with redress in the form of either legal action being stopped, assets in the form of houses and cars saved, excessive legal fees refunded and plans to bring arrears up to date in terms of section 129 of the NCA were approved by credit providers.
“In the process of mediating disputes and providing financial hardship mediation we are beginning to develop a sophisticated understanding of the challenges faced by consumers, who most of the time do not have the required resources in terms of time and money to resolve their problems,” says Mphahlele.
“Each consumer’s case is unique and requires a different solution and the ability of the NDMA to provide expert advice and guidance has benefitted consumers immensely. It is very important that consumers are provided with the skills and information to help them avoid future debt, understand their rights and responsibilities as well as know where to go to access redress.”
The NDMA managed to resolve 63% of disputes relating to the banking sector within 20 business days. The 20 business day turnaround time is important as most disputes the NDMA receives relate to property auctions, car repossession and other forms of legal action which require a quick response from all parties to ensure the consumer is not prejudiced.
Thirty seven percent of cases exceeded 20 days for various reasons including requests for extensions to obtain archived documents, investigate payment disputes and do payment reconciliations. Consumers are also sometimes slow to provide required documents as they do not keep them in a safe and easily accessible place.
Disputes involving deceased estates, insolvencies or business banking are a few examples of the cases that are not in the NDMA’s jurisdiction to resolve.
In such instances the NDMA provides advice and information to the consumer on the issue as well as whom to approach, including referrals to the Credit Ombud, National Credit Regulator (NCR),Consumer Commission, the Law Society and the Banking Ombud.
The NDMA referred 178 cases to these and other organisations during the period.
“Another highlight for the quarter was an acknowledgement of the NDMA’s contribution to consumer education by the World Bank. This innovative project involved a story line in the popular Scandal TV series.
“The evaluation results showed that millions of consumers had benefitted from the messages conveyed in the drama. This resulted in consumers applying the knowledge and changing their behaviour relating to how they manage debt and their finances.”
“The type of enquiries dealt with indicate that consumers are struggling with a range of complex issues when it comes to credit,” says NDMA CEO, Magauta Mphahlele.
“The NDMA Helpline agents are knowledgeable and are therefore able to empower consumers with relevant information of how to resolve an issue and where to go for assistance.”
She says the increase in calls handled by the Help Linecan be attributed to a new SMS call back channel introduced for consumers in January 2013 as well as advertising at taxi ranks and media activities, which has made consumers more aware of the NDMA and its work.
Most calls were of a general nature (22%); or about debt counselling (20%); credit bureaux (13%); garnishee orders (8%); and debt consolidation (5%).
With regards to mediated cases, the NDMA closed 863 cases compared to 679 in the last quarter of 2012, representing a 27% increase in the number of cases closed.
A highlight was that 72% of resolved matters were found in favour of the consumer. In favour means that a consumer was provided with redress in the form of either legal action being stopped, assets in the form of houses and cars saved, excessive legal fees refunded and plans to bring arrears up to date in terms of section 129 of the NCA were approved by credit providers.
“In the process of mediating disputes and providing financial hardship mediation we are beginning to develop a sophisticated understanding of the challenges faced by consumers, who most of the time do not have the required resources in terms of time and money to resolve their problems,” says Mphahlele.
“Each consumer’s case is unique and requires a different solution and the ability of the NDMA to provide expert advice and guidance has benefitted consumers immensely. It is very important that consumers are provided with the skills and information to help them avoid future debt, understand their rights and responsibilities as well as know where to go to access redress.”
The NDMA managed to resolve 63% of disputes relating to the banking sector within 20 business days. The 20 business day turnaround time is important as most disputes the NDMA receives relate to property auctions, car repossession and other forms of legal action which require a quick response from all parties to ensure the consumer is not prejudiced.
Thirty seven percent of cases exceeded 20 days for various reasons including requests for extensions to obtain archived documents, investigate payment disputes and do payment reconciliations. Consumers are also sometimes slow to provide required documents as they do not keep them in a safe and easily accessible place.
Disputes involving deceased estates, insolvencies or business banking are a few examples of the cases that are not in the NDMA’s jurisdiction to resolve.
In such instances the NDMA provides advice and information to the consumer on the issue as well as whom to approach, including referrals to the Credit Ombud, National Credit Regulator (NCR),Consumer Commission, the Law Society and the Banking Ombud.
The NDMA referred 178 cases to these and other organisations during the period.
“Another highlight for the quarter was an acknowledgement of the NDMA’s contribution to consumer education by the World Bank. This innovative project involved a story line in the popular Scandal TV series.
“The evaluation results showed that millions of consumers had benefitted from the messages conveyed in the drama. This resulted in consumers applying the knowledge and changing their behaviour relating to how they manage debt and their finances.”