Dodgy companies are forcing vulnerable SAns into debt review - what can be done?

While debt counselling has its place particularly with the current cost of living crisis, unscrupulous outfits can take consumers for a ride.

As Wendy Knowler warns, many South Africans have been conned into debt review by call centre agents whose bosses exploit inappropriate regulations.

The consumer journo relates the nightmare experience of one unsuspecting woman who, after answering an unsolicited phone call, found herself under debt review even though she'd said she first wanted to see a contract before agreeing.

She did not receive any documentation, Elrine told Knowler. 

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“I was contacted by a company claiming to work in conjunction with the National Credit Regulator (NCR). He said they'd noticed my creditors are charging me too much."

Elrine

Elrine says the company ignored all her follow-up emails and calls.

She was eventually sent forms by her bank which had been submitted to them, ostensibly initialled and filled in by the client.

"My bank even tried contacting them for a reversal form; however this mail was just ignored."

"I have since submitted a complaint with the NCR, I was informed this can take several months to be resolved.”

Elrine

There are several things that need to happen to close the loopholes in current regulations, Knowler says.

This includes amending the National Credit Act, which falls under the ambit of the Department of Trade and Industry.

The NCR also needs to review its policies and response times, she goes on.

"Allowing someone to be flagged with creditors... without undergoing a detailed financial assessment is preposterous! And it plays into the hands of these bad apple debt counsellors."

Wendy Knowler, Consumer Journalist

She also proposes that, in the meantime, the NCR urgently diverts resources to set up a task team to deal with consumer complaints about these practices.

"This team should investigate the claims, insist on the call recordings which will show the mis-selling... get the people out of debt review WITHOUT COST, because they're now being extorted to get their accounts back in their control." 

"I think more of us need to start making a noise about this because it is scandalous what is happening."

Wendy Knowler, Consumer Journalist

For more detail, listen to the interview audio at the top of the article