The National Credit Regulator (NCR) has warned that indebted people should act immediately when confronted with letters of demand or threatening phone calls from creditors and should not wait for the “problem to go away”.
Peter Setou, senior manager of education and strategy at the NCR says the biggest mistake that people make is to believe that if they ignore phone calls and letters the problem will somehow just go away.
“The earlier that someone sees they are in financial trouble and acts upon it the better,” he says. “The best way to do this is to contact the credit provider immediately there is a default in repayments and discuss the matter with that organisation,” he says.
March is Consumer Rights Month and the NCR has embarked on a nationwide campaign to inform and educate consumers about their rights and responsibilities when it comes to repaying debts that have been incurred as part of daily life.
At the end of September last year the Credit Bureau Monitor, compiled by the NCR, found that 18,35-million South Africans were credit active and of these 46,3% (or nearly 8,5-million) had impaired credit records.
“Consumers should be pro-active about their debts and should take action before receiving a letter of demand or a threatening phone call,” says Setou.
He says that a credit provider is entitled to approach the courts for a judgment against a debtor but the credit provider must be given written notice of this intention, inform consumers of their options, including debt counselling and assist a debtor to find an alternative method to bring the payments back into line.
Setou says this is particularly important should a consumer receive a Section 129 notice letter or any other letter of demand. He says consumers must act on it and follow the stipulations contained in this letter of demand (usually to contact the credit provider) and not just ignore it.
Over-indebted consumers are entitled to apply for a debt review and already more than 200 000 consumers in South Africa have done so. This review allows debt counsellors and consumers to draw up a budget and then renegotiate repayments with credit providers.
Setou says that this becomes even more important for property owners in South Africa who are at risk of losing a property entirely should they not act on the letters of demand issued by banks when people have defaulted on bond repayments.
The NCR says that while the regulations are there to assist over-indebted people, the reality is that these people must recognise their own responsibilities and act accordingly.
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