Note From the Ombud

It is unbelievable that we have already reached the third quarter of the year and working towards the last few months of 2013.  We have logged 6 098 complaints and enquires, with 3 546 disputes stemming from these, resulting in an increase of 19 percent as compared to 2012. The office has been hard at work and has managed to show an increase of over 50% (51.45%) in the number of disputes closed across all departments when compared to the same period last year.

I am delighted to announce that we have recovered R 2.45 million to date for consumers.  This is by far the greatest amount we have recovered in the history of this office.

The Emolument Attachment Order Task Team, which was established to investigate current practices around Emolument Attachment Orders, has finalised its work and have submitted a well rounded document to National Treasury.  We are currently awaiting feedback from the National Treasury, after which the industry will begin the process of drafting a code of conduct. I am confident that the efforts and hard work by all members of this task team, together with work done by the Banking Association of South Africa Task Team, will result in an improved garnishee order system within our country.

The National Consumer Financial Education Strategy, which is being driven by National Treasury, has brought much needed focus on the South African consumer education landscape. Efforts are underway to capitalise on all the work that various role players within government and the credit industry have performed in consumer education. We have had meaningful interaction with various key stakeholders, from both government and the credit industry, relating to the National Consumer Financial Education Strategy. All parties have given valuable input at the last working session and the strategy has been approved by members of the working group. The strategy now has to be forwarded to the Minister of Finance. This comes at a time when consumer education is of utmost importance for the industry.

Research has shown that the effectiveness of our Community Information sessions are somewhat questionable, as they tend to happen during working hours, where the majority of people who are attending these sessions are not credit active. Research by the South African Insurance Association (SAIA) shows that after spending R17 million over a four year period to reach 61 069 people, 57% of people could not remember ever attending a workshop. This is one of the reasons we chose to move away from community based workshops.

Targeting consumers at their place of employment ensures that you are training the right target audience, while simultaneously assisting employers to relieve issues such as high employee absenteeism and unproductiveness which may arise as a result of financial problems. It is for this reason that our office took the step to shift focus from community based workshops to primarily training employees.  We hope that by adopting this new approach to training, we will receive better results, especially with the retention of knowledge, over time.

In our own backyard, the pilot programme for the Credit Ombud’s new Consumer Education Strategy, named Double Impact, was successfully implemented at Real People in East London during the week of 12 August 2013. The new education strategy is aimed at specifically targeting credit provider staff, with the aim of them imparting the knowledge to consumers and other family members.

With 147 Real People employees already trained, we now have a good idea of what works well, and what was found the most useful, in terms of our training technique and course content.

This is some of the initial feedback received from those who attended the pilot session:

Employer Comment: ‘I’d say all the objectives were achieved.  We’ve been inundated with requests to attend the training from those who could not make it. I’ll see if we can get more funding for the Credit Ombud to come back for a second round.’

Attendee Comment: ‘I would like to thank you for the opportunity you gave me to go to the OMBUD Credit Literacy Training, I learnt a lot … as I was  struggling to make payments on my accounts but a very big eye opener and learnt that I am in control of the decisions I make on how to handle my money ,now I have a set goals on how I can be debt free … now that you have given me this opportunity to get these tools for my financial freedom , I thank you because I feel like a load has been removed from my shoulders…..Thank you (from the bottom of my heart)’

Feedback from the pilot sessions truly cements our decision to focus efforts on employees in the credit industry, who are not only credit-active themselves, but also play a role in dealing with consumers regarding debt related issues.  The way in which the Double Impact workshops have been structured will result in benefits for all involved. Employers (you our members and stakeholders) will enjoy the benefits of more productive staff who have taken control of their own credit and financial lives. In turn the customers they serve will also benefit from their increased knowledge and confidence – especially about the assistance that is available out there!

We wish to thank the staff and management of Real People for affording us the opportunity to pilot our material at their site and value the input flowing from the pilot.

The next step is to roll it out to the rest of our Credit Providers and other stakeholders.

Our office pulled together and made a lasting difference to the Little Stars Early Childhood Day Care Centre in Diepsloot as part of the Nelson Mandela Day commemoration.  Our team collected and donated educational toys, stationery supplies and groceries for the day care and spent time playing with the kids and planting a vegetable garden.

On a lighter note, our team was also taken through their paces at the Discovery 702 Walk the Talk.  This year, the office of the Credit Ombud participated as a team for the first time at the walk. Stiff legs were the order of the day the next few days after the walk, but much fun was had by all!

We have signed a Memorandum of Understanding with the National Credit Regulator (NCR) in which the two organisations undertake to have a much closer and more mutually beneficial working relationship.  The aim is to improve the co-ordination of complaint referrals and sharing of statistical data in order to benefit the industry as a whole by acquiring a solid understanding of the nature of complaints and issues affecting the credit market.

Together with the NCR, we will explore ways in which we can capitalise on collaborative consumer education campaigns and improve our outreach to consumers.

In this edition’s Expert Opinion section, we hear from Advocate Neville Melville, the newly appointed Consumer Goods and Services Ombud, on the work his office does.

Best wishes,
Manie van Schalkwyk