NDMA calls for more solutions to aid over-indebted consumers

By Staff Writer

The National Debt Mediation Association (NDMA) called for a new approach to combat consumer’s over-indebtedness this week adding that a large portion of credit-active consumers having impaired credit records.


According to the latest Consumer Credit Market and Credit Bureau Monitor reports of the National Credit Regulator (NCR) of 76.5 million accounts, 12 million or 18% are three or more instalments behind and 50.7 million or 74% are in good standing.


While 9 million consumers have impaired records, not all these consumers are necessarily over-indebted. About 6.2 million of these have a combination of some impaired and unimpaired accounts as well as some adverse listings. “It is these consumers that have a better chance of rehabilitation if they act in time,” said NDMA CEO, Magauta Mphahlele. 


Of the 6.2 million consumers with impaired records, 2.3 million have an adverse listing which means that their account has been handed over to the legal department for collection or the debt has been written off and possibly sold to third parties for collection.


However, 3.8 million are three and more months behind with their accounts leaving them exposed to legal action and receiving section 129 notices. The NDMA warned that if these notices are not addressed within 10 business days of delivery they will be followed by a summons to appear in court and then judgment. Judgements allow the credit provider the right to auction, repossess or garnishee a consumer’s salary.


“One of the problems is that consumers are not aware that if they do not take up the options outlined in the section 129 notice their chances of redress become limited and more expensive,” says Mphahlele. “The sooner they communicate with their credit providers or approach the NDMA for advice, the better.”


She added that consumers should be provided with a range of effective and cheaper options in the credit market to help them get over their debt. The NDMA is, with the support of the banking industry and other credit providers, set to find ways of reducing the cost and complexity of rehabilitating over-indebted consumers. This will entail making credit providers more approachable and consumer friendly as well as alleviating the burden on the courts.


She added that the high rate of borrowing, coupled with a general slow-down in the economy, increased cost of living and unavoidable life events such as sickness, death and divorce has hit some consumers’ pockets. 


“When you start borrowing to pay off other creditors or to cover basic costs such as food, utilities as well as rates and taxes, it should sound the alarm bell,” says Mphahlele.  “It takes just one month of unpaid bills to start slipping into serious arrears and to become vulnerable to legal action. It is then much more difficult to negotiate restructuring your repayments with your credit provider.”

Recent Articles

Featured Register your customary marriage or lose the right to inherit estate

December is that time of the year when we will see at least one suitor sending his uncles to negotiate the price of his future wife. Lobola, as the bride price is known, has always been an important element of the African marriage.

Read more

Changing from one medical scheme to another - effortlessly

It is coming up to the end of the year and you might be looking to change medical schemes, or options within a scheme in preparation for the new year. While you don’t necessarily have to wait for year-end to do so, providers often recommend it.

Read more

Your guide to financially surviving Christmas

There are a few times each year where you need to dig deeper into your pocket and spend more money such as birthdays, anniversaries, and the Christmas period. Whether you celebrate this religious holiday or not, the festive period - depending on how you choose to spend it - means increased travelling, buying of gifts, entertaining, and eating out at restaurants.


Read more

Trump, Trump and a little bit of South Africa

What a November we had, with the rand staging one of its best months and closing below the R14.00 level. To be honest, this looked like quite a far-fetched possibility at one stage during the month. It seems that the tide has changed a little, even though it might be short lived since the US dollar bulls are not so sure of their case anymore.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Free iCollege Scholarship

Price: R600
When: Until 16 May 2019
Where: Nationwide

Telkom December Big Deal

Price: R459 pm
When: Until 31 December
Where: Nationwide

Money Savvy Kids Giveaway

Price: R450
When: 8 December
Where: Johannesburg (Milpark)