The National Debt Mediation Association (NDMA) are piloting the voluntary debt mediation service (VDMS) in July this year for six to twelve months. The VDMS is being launched by the NDMA on behalf of all registered credit providers.
Consumers will be invited to participate in the pilot if they are in serious arrears and in the process of being handed over for legal action or who have been issued with a section 129 notice. If they agree to join the programme the credit provider will refer them to a registered debt counsellor who has been selected by the NDMA.
“Instead of taking legal action the credit provider will recommend that the consumer goes through the VDMS process. A debt counsellor will then be appointed to look at all the credit agreements, not just one, and provide a total solution,” explained Magauta Mphahlele CEO of the NDMA.
Credit providers who have participated in the VDMS include banks, micro lenders, clothing and furniture retailers have agreed to subsidise the debt counsellor's fee. “Credit providers have undertaken not to take legal action against those consumers who are committed to stick to their restructured debt payments, ”added Mphahlele.