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Answer for Some creditors claim that they must be excluded from debt review. Can they do this?

Hi there and thank you for the questions


1. What Wesbank did sounds like securitisation. There has been heavy debate around this issue and it was even featured on Carte Blanche. Banks usually do this securitisation with mortgage bonds. How it works is as follows. they lend out money to a consumer. they then sell the debt to a third party and so recover the money that they have lent out. the third party then appoints the bank as “agent” to collect the funds… and the bank then pays over the funds to the actual owner of the debt. There is then a legal technicality that comes into play. the Banks are not allowed to act as agent for these third parties. Even though the law recognises the practice of selling debt to third parties. The third party should collect the funds themselves, and the banks actually have no legal claim to the funds. I suggest that you speak to an attorney regarding this. It will be best if you can get further advice on this from a legal expert.


2. If you were under debt review and paying according to your repayment plan it is illegal for the credit provider to terminate and continue to summons. They are well aware of this fact. Because the PDA disbursed your funds incorrectly it creates ground for your debt counsellor to mediate the situation. The banks batch processes these hand overs to attorneys and it does happen very often that many cases are handed over incorrectly. All that needs to be done is for your debt counsellor to bring it under the attention of the attorney that you are under debt review, that you have a court order and that you are making payments on the account. (Assuming that this account is included in the debt review). the case must then be sent back to the FNB debt review department and they must halt any further action on the account. I would also suggest that your debt counsellor request the bank to provide proof of delivery of the summons and thereafter request the judgment to be rescinded immediately.


3. The cancellation of debit orders remain your responsibility. Your debt counsellor does not have the mandate to cancel or stop a debit order instruction on your behalf. Consumers under debt review must make sure that all debit orders are stopped for all debt… because your debt is now going to be paid through the debt review. It is also wise to open a new bank account with a bank to whom you do not owe money, and change your salary to be paid into the new account.


4. If the credit provider is of the opinion that your account still has an outstanding balance, he/she must provide proof of such balance. Simply stating that you still owe them is not enough. They must provide you with a statement, as required by law. You can then start the debate from there. Compare statements and payments and see where you end up. If the balance is zero on your side it should be zero or at least very close to zero at the credit provider’s side as well. Keep in mind that all the systems used by banks, PDAs and debt counsellors might calculate interest in different ways.


5. The amendments to the act was only signed into law in May 2014. It gave the outline of the new provisions but the specifics still need to be captured in the form of Regulations. Only when the regulations has been drafted and published for public comment, and public did not raise any objections to those regulations, will the new Amendments be published and come into effect. so the answer here is simple, the Amendments are not in effect yet. Hopefully it will come into effect before 2014 is over.