A Fin24 reader eager to pay off his debt and be unlisted from debt review seeks answers as to why there are conflicting accounts from the attorney and the creditor on how much he owes.
He writes:
I have been under debt review with a listed company on the National Credit Regulator website since 2018. My total debt was R209 850 excluding my home loan, which was also listed.
Three months ago I made all the calls to my creditors and received settlement amounts on my debt. I paid 99.9% of all my debt with a performance bonus I received from work, but had issues with 0.1% to get a clearance certificate and unlist me on debt review.
According to my consumer statement, my debt review company has paid the attorney since inception, but somehow the file was taken back from the attorneys by the creditor, and now the funds cannot be located. The attorneys said they no longer have any details of me, the debt counselor confirms they still looking into it, and yet I’m still waiting for feedback.
The creditor confirms they haven’t received anything from the attorneys, so according to them, the original amount is still what I owe! I’ve left messages but no one returns my calls.
The total debt amounts to about R29 000, which, according to the consumer statement funds, was paid to attorneys to the value of R14 092.
What do I do?
Sebastien Alexanderson, CEO of debt counselling firm National Debt Advisors, responds:
Firstly, I have to make it clear that the debt review industry and all registered debt counsellors are regulated by the National Credit Regulator (NCR). As such, a consumer can lodge a complaint with the NCR at any time.
This is done by completing a Form 29 (that can be downloaded from the NCR website: www.ncr.org.za) and attaching all supporting documents and information to the complaint. The NCR will evaluate and investigate the complaint. Complaints can be sent to the email address [email protected].
With regard to your particular problem, the following could be what has happened.
- The account could have been in suspension due to the incorrect credit provider being listed against the account number.
- The funds could have been reallocated by the PDA due to incorrect details.
In general, once a client goes into arrears, whether it be before or after entering debt review, a collection process is triggered.
Once this process is triggered, it is normal for many banks to move the customer from active debt books to the collection process. This can be a debt collector associated with the lender, or a law firm.
For all of this, there is usually an automated process when it comes to communication from the banks to the clients. Often the debt counsellor is bypassed on these communications, because the communication needs to be direct with the client – and the client must then send the debt counselor the communication.
Once there is a transfer, there is normally a process of accountability and checks and balances from the PDA, where money is sent and distributed. When a lender identifies it has transferred the client – the money is sent back to the PDA into a suspense account where debt counsellor has up to 90 days to correct the account or distribute the funds pro-rata to the client’s other accounts.
If money has been paid to an attorney, and the debt counsellor has the PDA statement and they cannot find the money – then this needs to be taken up with the law society, ombudsman and / or the NCR so that action can be taken.
Compiled by Allison Jeftha.
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