Voluntary debt mediation offered by the National Debt Mediation Association (NDMA) is helping an increasing number of over-indebted consumers, according to figures released by the association. Requests for mediation, which were either a formal complaint against a credit provider in terms of the credit industry’s new Code of Conduct, or requests for assistance to negotiate the restricting of debt obligations, rose by 120% from 538 in 2010 to 1877 in 2011.
“Through its debt mediation service the NDMA made it possible for hundreds of consumers, individually or through debt counsellors, to engage with credit providers and find win-win solutions to alleviate the consumer’s debt stress while allowing credit providers to receive reasonable payment,” said Magauta Mphahlele, CEO of the NDMA.
Mphahlele added that through the NDMA’s interventions consumers were able to retain their assets, such as their primary residence and means of transport through the mediated debt restructuring agreements. The NDMA has managed to finalise 95% of the 1,877 matters brought before it.
Of the finalised matters, 77% (1,345) were in favour of the consumer, while 33% (444) were not. “In favour does not mean the credit provider was in the wrong in all instances, but it does reflect the willingness of credit providers to make a concession if the merits of the case permit,” said Mphahlele. “For example, with regards to car repossessions and property auctions, the credit provider in most instances had a valid court order to execute, but through mediation, 126 property auctions were stopped, 207 car repossessions were halted and 426 terminated matters were reinstated back into debt review.”
The NDMA is a not for profit organisation created by the credit industry to receive, manage and resolve complaints against credit providers; facilitate voluntary debt rearrangements; promote compliance by credit providers; implement consumer education awareness programmes; and provide a platform for the debt counselling and credit industry to engage and find common solutions.