Non-bank Credit Department

In 2013 the staff in the non-bank credit department were busier than ever before with an increase of 57% in the number of disputes opened, while the number of disputes closed increased by 111% as compared to the previous year. We attribute this increase in the number of complaints to increased awareness amongst consumers about the existence and function of our office, in addition to the fact that more consumers are speaking up when they identify a problem with their accounts or garnishee orders.

We also recorded an impressive increase in the amount of savings or re-imbursements obtained for consumers, with the final figure peaking at R 3 788 613.

To give some perspective; the 6 attorneys working in this department investigate complaints received from consumers regarding matters such as incorrect accounts, alleged incorrect or unlawful garnishee orders or alleged reckless credit agreements. At the outset of the investigation, both parties will furnish us with information, which we in turn provide to the other party for comment.

Through this process of constant communication, critical analysis and evaluation against the requirements of the NCA and the contract terms, the matter eventually reaches a conclusion. In all the matters the resolution was reached voluntarily between the parties as a result of our facilitation – the office did not have to resort to any rulings to force an outcome on any party. If the matter is concluded on the basis that a refund is to be paid to a consumer, or an account is recalculated in favour of the consumer, these amounts are added up to represent the ‘savings’ for that consumer.

What makes the final figure remarkable is the fact that it is made up of many small amounts, sometimes only R200 or R400, which were ‘saved’ for individual consumers.

The highest category of complaints remained issues involving statements of accounts. One would expect that such complaints are easily resolved with just a simple phone call or an email, but in our experience this is not the case. The uncomplicated issues are probably often resolved with the consumers directly when they first contact their credit providers to query their statements. The difficult cases are eventually escalated to our office as consumers are not able to resolve them through efforts of their own. Often the matters involve an outsourced collection agent, in which case the difficulty and time delay is due to the fact that there are sometimes two sets of accounts, one in the book of the agent and another at the credit provider.

We have also seen an increase in the number of alleged reckless lending complaints, and in addition, our office has queried the affordability assessments of a number of loans, even though the consumers did not query this. We have an obligation to investigate a matter in its entirety and to ensure that the requirements of the Act are complied with, even if the consumer is not aware of his rights and therefore did not raise the issue.

We have fortunately had very good co-operation from most credit providers in this regard, and cases were resolved amicably. There were instances where members felt that the office did not have the jurisdiction to investigate reckless lending, and that this was the exclusive domain of the courts. We are therefore pleased that the proposed amendment of Section 134 of the NCA specifically provides for this power for ADR agents.

The complaints about incorrect garnishee orders – ranging from the amount claimed, the balance that is not reducing or that the consumer never signed the section 58 consent, are still on the rise. The increased number of complaints in this area is probably also due to more consumer awareness. We are aware that many credit providers have changed their processes in this regard and that there is a drive to ensure the collections are done legally and correctly, but it may take some time before all the old matters where there were problems, are out of the system.

Our key priorities this year include more and better interaction with our members and we look forward to working on solutions for any problems that are identified and to further strengthen our good working relationships.