Welcome to the FCM SA Workshop - 17 May 2017 Opening and Welcome - - - PowerPoint PPT Presentation

Opening and Welcome - Dr Tjaart van der Walt co Founding Director Global Credit Management Practitioners Keynote address - Frans Haupt Director UP Law Clinic

Welcome to the FCM SA Workshop - 17 May 2017

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(gremlin: POPIA)

Susan Debtor AB Credit Grantor

XY Tracing Agent Atuorneys Inc

Wheels Bank Debt Counsellor

The characters in the case study

CAVEAT The case study is peppered with Gremlins. Some Gremlins caused more Gremlins and some are in the case study because they were (un)intentional. The Gremlins were found in real cases, in your files and some were

• ffered to the FCM SA when we solicited Gremlins from you.

OBJECTIVE Find and fix the Gremlins AWARDS Delegates who find the most (serious) Gremlins, might be awarded with some “old” grape juice. (thanks to AfriGIS)

03/12/2010 Susan Debtor applied for a loan, from AB Credit Grantor, for “house renovations” in the amount of R 8,050. Susan Debtor offered to repay the loan over 6 months, as she is a single mother with 1 child.

Susan Debtor heard in the news about the NCA. Susan Debtor requested the loans officer, at AB Credit Grantor, to supply her with their NCR registration. The reply Susan Debtor got was that AB Credit Grantor

• nly have 20 loan agreements: totalling R 50,000 in their

portfolio, hence they don’t have to be registered with the NCR .

AB Credit Grantor does not have a credit bureau contract to buy consumer profile data, they opted to use

XY Tracing Agent that claims that they are re-sellers of

data from all credit bureaus.

XY Tracing Agent charged AB Credit Grantor R 70

for Susan Debtor’s payment profile.

06/12/2010 AB Credit Grantor granted the loan to Susan Debtor on the following terms: Installments: 6 equal monthly - starting 04/01/2011. Interest rate: 5% per month. AB Credit Grantor never sent any data to any credit bureau as they claimed they are a small outfit and don't know what to send, how to send, and in what format, any information to a credit bureau.

Susan Debtor absconded without making any payments and AB Credit Grantor could not get hold of her. All letters sent to the address of Susan Debtor came back marked “no such person”. 04/07/2011 AB Credit Grantor handed over the loan of Susan Debtor to XY Tracing Agent to collect the amount outstanding

• f R12,077 made up as follows:

Loan R 8,050 Bureau fees R 70 Initiation fee R 870 Service fee R 300 (R 50 pm for the 6 months) Interest R 2,787 (5% pm for the 6 months)

01/08/2011

XY Tracing Agent traced Susan Debtor and sent her a

Final Letter of Demand.

XY Tracing Agent, in reply to a request from Susan

Debtor to provide her with their Debt Collectors registration number, said that they never receive monies from debtors and does not have to be registered with the Council for Debt Collectors. 22/08/2011 Susan Debtor paid R 300 to XY Tracing Agent and

• nce again absconded.

31/08/2011 The account was handed back to AB Credit Grantor by

XY Tracing Agent with the following statement:

04/07/2011 Capital handed over R 12,077 01/08/2011 Tracing Fees R 309 (MC Court Rules) 01/08/2011 Final Demand R 17 (Anex B of DC Act) 22/08/2011 Minus: Payment (R 300) 31/08/2011 Interest R 308 (15 ,5% pa)

(03/07/2011 - 31/08/2011)

31/08/2011 10% collection fee R 1,207 (penalty for withdrawal of account) TOTAL R13,618

01/09/2011 AB Credit Grantor paid XY Tracing Agent in the amount of R1,233 made up as follows: Tracing Fee

R 309 Final Demand R 17 10% fee R 1,207 Minus: Payment (R 300) Balance R 1,233

AB Credit Grantor then debited the account of Susan Debtor with the amount paid to XY Tracing Agent. AB Credit Grantor made a note on the account “written

• ff”.

Again no data was submitted to a credit bureau.

02/10/2015 Susan Debtor, now married in community of property, again approached AB Credit Grantor and requested a loan of R3,000 to pay school fees for her child. AB Credit Grantor’s office in Pretoria, verbally offered a new loan of R 25,061 which included the balance of the previous loan of R 13,618 plus R 8,443 (interest from 01/09/2011 - 02/10/2015) a total of R 22,061, to settle same, and the balance will then go towards the “school fees” amount.

Susan Debtor accepted the loan offer and she signed an agreement for R 25,061 repayable over a period of 12 months at a rate of 36,5% pa (RR being 7.5%) as from 01/11/2015. Susan Debtor, at the time of signing the new agreement, indicated income and expenses as follows:

Income p.m. Salary R 6,650 (at DTI) Casual Wage R 1,000 (waiter at Foodies) Expenses p.m. Boarding at parents R 2,000 Taxes etc R 650 Fuel R 300 D/O Wheels Bank R 1,200

Susan Debtor’s contract with AB Credit Grantor included the following charges:

Initiation fee R 1,050 charged once off Credit Life R 1,350 charged once off for the full 12 month term Service fee R 60 charged per month for 12 months Debit Order R 6 charged per month for 12 months

02/11/2015 Susan Debtor paid her November 2015 installment in full. 01/12/2015 Susan Debtor paid her December 2015 installment in full.

04/01/2016 Susan Debtor absconded and left her full and part time

• employment. She also left her parents home without

leaving a forwarding address. 29/01/2016 AB Credit Grantor handed over the account to

Atuorneys Inc for collection.

10/02/2016 A section 129 was sent by Atuorneys Inc on behalf of AB Credit Grantor, by registered mail, to Susan Debtor, together with a letter of demand in the amount of R 29,046 made up as follows: 5/09/2015 Capital handed over R 25,354

Initiation fee R 1,050 Insurance R 840 Service fee R 120 Interest R 1,682 (36,5% pa) (for 60 days)

25/02/2016 Susan Debtor did not respond to the 129.

15/03/2016

Atuorneys Inc issued a summons, from the Pretoria

Magistrates Court. 22/03/2016 Summons could not be served on Susan Debtor by the Sherriff as she left her address. 28/03/2016

Atuorneys Inc instructed XY Tracing Agent to trace

Susan Debtor.

05/04/2016

XY Tracing Agent traced Susan Debtor, now living in

Put-Sonder-Water, at fee of R 350 on instructions of

Atuorneys Inc .

12/04/2016 Summons now served on Susan Debtor by the Sherriff.

15/04/2016 Susan Debtor, on receipt of the summons, signed a section 58 consenting to a judgement and EAO to re-pay the judgement debt in monthly installments of R 2,500. Susan Debtor’s sister was requested by Atuorneys Inc,

• n behalf of AB Credit Grantor, to conclude an AOD for

the debt owing by Susan Debtor to AB Credit Grantor. This was done and the sister now stands surety.

22/05/2016 Susan Debtor, knowing she has financial issues, went to see a Debt Counselor. The 17.1 was sent by the Debt Counselor to AB Credit Grantor.

22/05/2016 The Debt Counsellor also sent a 17.1 to Wheels Bank, with whom Susan Debtor financed the purchase of a motor vehicle in terms of an installment sale agreement. In addition to the motor vehicle, Susan Debtor also purchased the mandatory comprehensive cover (R400 pm) and 2 value added products, namely, Group Life (R289 pm) and Top up (R 320 pm) cover for the full term

• f the agreement and paid for by Wheels Bank on her

behalf on a monthly basis. In addition to her vehicle installment amount, these two premiums are also debited to Susan Debtor’s vehicle account on a monthly basis.

23/5/2016 Wheels Bank sent a COB to Debt Counselor stating the following:

1. Monthly Instalment (excluding credit provider insurance) R 2 200

• 2. Mandatory comprehensive cover

R 400 3. Group life cover R 89 4. Top Up cover R 120

06/06/2016 The Debt Counsellor sent a proposal to Wheels Bank for reduced monthly installments of R 1 600 at an extended repayment term, but does not make any provision for the insurance premiums in the proposal. 08/06/2016 As a result, Wheels Bank sends Debt Counselor a counter proposal for a total repayment amount of R2,209

• pm. These premiums should have been specified in the

proposal under the “extra & charges” column and the amounts should have been added to the R 1,600, thereby totaling a proposal of R 2,209.

08/06/2016 AB Credit Grantor requested the balance from

Atuorneys Inc in order to complete the COB to the Debt

• Counselor. Atuorneys Inc supplied the following

information to AB Credit Grantor:

29/01/2016 Capital R 25,354 Interest R 1,682 (36,5% pa for 60 days) Initiation fee R 1,050 Insurance R 840 Service fee R 300 (R60 pm for 5 months) 10/02/2016 Letter of Demand R 36 Sec 129 notice R 36 15/03/2016 Summons R 404 Sherriff R 510 (3 attempts to serve) 05/04/2016 Tracing fee R 350 12/04/2016 Sherriff R 170 (served summons) 15/04/2016 Judgement R 309 08/06/2016 Interest R 944 (36,5% pa for 30 days) BALANCE R 31,985

05/07/2016 AB Credit Grantor sent the COB to the Debt Counselor indicating the balance as R 31,985 plus interest at 36,5% pa as from 05/07/2016 until final payment. 15/07/2016 Wheels Bank receives the first payment of R 1,600 from the PDA. 15/08/2016 Wheels Bank receives the second payment of R 1,600 from the PDA.

10/09/2016 Wheels Bank sends a 86(10) notice to the Debt Counselor, the NCR and Susan Debtor, as no reply was received to the counter proposal. The payments received were also not in line with the counter proposal and the matter has not yet been enrolled in court by the Debt Counselor. Wheels Bank did not receive any notice from Susan Debtor, nor the Debt Counselor, to cancel any or both of the insurance products. In addition Susan Debtor is not paying the premiums on the mandatory comprehensive cover.

29/09/2016 As the Debt Counselor did not provide a proposal to AB Credit Grantor, they sent a 86(10) to the Debt Counselor, and copied Susan Debtor. 31/10/2016 AB Credit Grantor sold the account to XY Tracing

Agent, providing only the COB that was sent to the Debt

Counselor, as proof of ownership and balance. No data regarding this transaction was submitted to any credit bureau.

The characters in the case study, namely: Susan Debtor AB Credit Grantor

XY Tracing Agent Atuorneys Inc

Wheels Bank Debt Counsellor thank every one of you for helping them to get connected with reality and also (not) fixed.

THANK YOU FOR ATTENDING The Notes and Comments will be “neatened” up and hopefully with the video made available to the Credit Industry - watch your mail for details.