Consumers must be wary of unethical debt counsellors

By Staff Writer
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.

"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," Hirst added.

"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?

Recent Articles

Featured Do you need credit to survive Easter?

Easter weekend is here and with it the expectation of celebration. While there is nothing wrong with this, it often means spending more money than you bargained for.

 

Read more

Young woman building a legacy brick by brick

When her dad passed away, Siyasanga Ngcongca, an internal auditing graduate, took over the family business. Ngcongca Construction, as her company is known, is a service provider to five insurance companies, handling building and commercial claims.

Read more

Can you evict paying residential tenants?

One of the most common reasons for wanting to evict a tenant is non-payment of rent. But there are many other situations that landlords may encounter. These can range from damaging property and breaching contract, to being reported as a continuous disturbance by neighbours.

Read more

How one entrepreneur designed her financial future

From as early as Cannon remembers, she recalls her grandmother seated behind a sewing machine. Through this influence she was sewing her own aprons and doll dresses by the time she was ten, and by the time she was 16, she started designing and make her own clothes.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Woodstock Grill and Tap Monday Burger Madness

Price: R75
When: Mondays
Where: Cape Town

Active Sushi Special

Price: R199
When: From Tuesday to Sunday
Where: Cape Town

Let's Teach and Travel TEFL Online Course

Price: R2,400
When: Daily
Where: Online