Consumer Watch: Debt review cold-callers will leave you out in the cold

Be very careful when talking to a call centre agent about going on debt review. Picture: Simphiwe Mbokazi /African News Agency (ANA)

Are you up to your ears in debt? Do need your debt restructured? Then you’re probably considering entering debt counselling, also known as debt review. But before you respond to a cold call or random SMS, ask yourself: Is it wise to place your financial well-being in the hands of an untrained call centre agent?

Probably not. 

Line, hook and sinker

There’s nothing preventing debt counsellors from cold-calling. But placing debtors without their knowledge or authorisation into debt review is believed to be a widespread fraud perpetuated by unethical practitioners.

Some debt counsellors market themselves via cold-calls or SMSes, with offers of vastly reduced repayments to creditors, payment holidays and slashed interest rates to the indebted. And because these call centre agents are not registered debt counsellors, it’s unleashed misery in the market.

For Johannes Miti, debt review came as a shock, causing severe hardship – and cost him his car – leaving him still indebted to the tune of R40000. In August 2017, Miti received an unsolicited call from an agent who had sight of his “profile”, which included his personal and account details.

The African Debt Advisors agent suggested he consider debt review, although Miti declined, saying he didn’t require it at the time, but might consider it if his circumstances change.

A month later, a clothing store manager told him his account was blocked as he was placed under debt review by My Debt Assistant. Shocked, Miti called them and spoke to a Ruweida Isaacs, who gave him the company address.

Miti asked his priest for assistance and the two drove from Stellenbosch to Cape Town to meet with Ruweida. Unable to show any documents supporting the debt review, Ruweida told Miti he could only be removed from the process if he applied to court to rescind the application, which he couldn’t afford.

She then gave him a scribbled piece of paper showing how his debts would be settled and Miti acquiesced. Monthly payments were deducted from his account, but Miti never saw any statements.

Messed up

His major creditor, Wesbank had financed a vehicle purchase earlier that year: In August 2017, when he was placed on debt review, his car payments were up to date. But in November last year, he received notification from Wesbank, stating he was R15230.33 in arrears and a week later, a letter from the bank’s attorneys.

Each time Miti called Ruweida, she assured him that his vehicle won’t be repossessed while under debt review. He thought the matter was being handled. In March this year, when the Sheriff of the Court served summons on Miti, he was again assured the matter was under control.

About this time, he discovered that another person, Washeemah Isaacs, was his debt counsellor (DC). Isaacs’s legal assistant even requested Miti sign an affidavit in June to “get the car back” on debt review to avoid it being repossessed – picked up in Stellenbosch from him by Quintin and Robyn Zimmermann, attorneys for Isaacs. 

Miti, whose English is limited, says he didn’t understand the affidavit and he only heard from Robyn Zimmerman on July 30, when he was simply told: “Wesbank does not allow the car under review” and he must make his own arrangements. Thirteen days later the sheriff repossessed his car, which has since been sold on auction. 

Miti still owes the bank and is now forced to use public transport or walk. 

Dodgy signature

In a written response to questions, Isaacs said: “The consumer’s information was obtained through an external marketing company.”

She claims there was thorough consultation and that they had signed copies of documents. Miti denies signing what is known as a “Form 16”, which contains information such as income, deductions, living expenses, etc.

It also enables the DC to obtain a credit check, notify creditors and the credit bureaus; determine their level of over-indebtedness; investigate reckless lending and illegal interest; and recommend a re-structuring plan. The call centre agent already had some of that information on hand during the initial discussion.

Isaacs and Quintin Zimmerman, Isaacs’s other attorney, have provided a copy of a Form 16, with a signature, which Miti says looks like his but cannot possibly be.

Miti, a left-handed military veteran who lost his arm in 1987, in action, cannot repeatedly sign uniformly and the signature appears to be copied. All six signatures on the form are exactly the same and the signature on Form 16 differs greatly from Miti’s signature on his affidavit.

A lawyer of Cape Town, who has assessed the matter, says: “From day one, Isaacs did not adhere to the payment arrangement with Wesbank, causing Miti to fall into arrears from January 2018. He says Isaacs neglected to address the section 88 (10) notice issued by Wesbank in November 2018.

“It’s mind-boggling how she sat on their hands with this issue, for months.” Miti says he was never made aware of a My Debt Assistant or Isaacs’s failure to implement the arrangement with creditors.

In July, Isaacs made a debt review application to court that made no sense. In her affidavit, Isaacs blamed creditors for the delays. She also presented figures to the court about Miti’s budget and indebtedness that bore no relation to reality or the annexures on which they purported to rely.

They constituted a combination of fabricated amounts, outdated information and miscalculations. Worse, the lawyers and Isaacs brought the application to exclude Wesbank from the debt review when they knew the Wesbank agreement had already been cancelled by a court order two months earlier.

Miti insists he never initially agreed to debt review – he had only said he would consider it. And yet, more than R80000 had been deducted from his bank account and he still owes Wesbank money.

His complaint is not unique: On Hello Peter, there are scores of complaints about how African Debt Advisors and My Debt Assistant had laid waste to consumer finances. One says: “In 2016, I received a call from African Debt Advisors. 

The person who contacted me said they are running a campaign with NCR to assist people with their debit through consolidation loans, then she insisted on doing calculation to show me how much I will save and said I have only five days to cancel if I decided not to be placed on debit review.

“Then within five days I went to Foschini to buy using my Foschini card only to find out that I’m on debit review. I contacted the company and they told me that they cancelled me on the debit review and they also emailed me the letter, but my problem is I can’t use my credit cards or shop using my cards. I’m still appearing under debit review.”

And another consumer complains: “Never get involved with them at all, they just good to take your money and not do all they promise. In fact, they just put you deeper into debt then what you were before!”

Clueless

Acclaimed debt counsellor, Nicola van der Merwe, says this was a prime example of what could go wrong with the process. “Would you let a doctor operate on you if his call centre agent randomly called you saying you have heart problems?” she asked.

“We have a lot of problems with these call centres listing consumers left, right and centre and not doing a proper job. That is precisely why you need to get a reputable registered debt counsellor to assist with your debt problems.

“All they did is to force the client to go back to them as they listed him. He could have gone to somebody else to take over his debt review. If you feel debt-stressed then it is better to call the NCR and ask them for the contact details of a reputable DC – or go to their website and find one in your area. Stay away from these call centres.” 

Debt Review

In 2005, the National Credit Act (NCA) introduced debt counselling as a debt relief measure for over-indebted consumers.

Consumers need to apply for debt review through registered counsellors. The act says, on receipt of an application, a debt counsellor must provide the consumer with proof of receipt of the application; and notify all credit providers that are listed in the application as the credit bureaus.

The counsellors then approach a Magistrate’s Court, which determines whether or not the consumer qualifies for debt review. Consumers are required to sign the debt counselling application form known as Form 16, understand the process, what the counselling fees are, and their rights and obligations.

They cannot take on any further credit and are required to make regular, on-time deposits to a payment distribution agent (PDA). The counsellor is required to explain, in writing, what the process and fees entail, submit a payment plan and to issue consumers with monthly PDA statements.

While under debt counselling, consumers are protected against legal action by credit providers - as long as they maintain their payments. Once all debts are paid up, the consumer is issued with a clearance certificate to show that they are now debt-free.

* If you’ve fallen victim to a botched debt counselling process, please get in touch. Mail me at georgina.crouth@inl.co.za.