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Media Info
 GOVERNMENT URGED TO ADOPT MEASURES TO REDUCE TWO-YEAR DEBT CASES
BACKLOG
26 October 2009
The court roll with debt cases is booked to March 2011 and debt
counsellors are urging government to find a way to speed up the
process to enable consumers and creditors to get back onto a more
stable financial basis.
Andre Snyman, CEO of Consumer Assist, South Africa's largest
national debt advisory company suggested that the National Consumer
Tribunal of the Department of Trade and Industry which has the same
jurisdiction as a High Court, should be boosted and given branches
in parts of the country other than Pretoria, "it is also able to
hear cases and they only charge R150 which cuts costs for
consumers, debt counsellors and creditors. It would make a huge
difference if they could help reduce pressure on the courts."
Snyman suggested though that serious consideration should be
given to special debtors courts or those courts dealing with debt
not closing for as long as the conventional month long recess over
December. "We are in an unprecedented financial crisis and
government needs to act to do more to help consumers and creditors
achieve greater financial stability sooner."
The National Credit Regulator has been more critical of the role
of creditors in the court logjam. It says in its recently released
annual report that it is a "great concern" that the courts have
approved less than six percent of consumer applications for "debt
counselling" since the law was enacted in June 2007. Only 6 000 of
11 2961 applications made by September this year had been ruled on
by a magistrate because the NCR says banks opposed most.
Snyman said that although petty opposition to debt counselling -
with creditors opposing even minor technical matters, for example,
incorrect spelling - this was easing as more realised that debt
counselling was working in their interests too, "it saves them a
lot of money, but despite that there is a serious logjam before
courts and with rapid escalations in those applying for debt
counselling - growing at more than 10 000 a month, we can
anticipate the logjam before courts will worsen unless government
intervenes to assist."
The NCR says banks and lenders are benefitting from debt
counselling to the tune of R97-million a month (in August) - this
being money paid back under "consent agreements" between consumer
and lender. Snyman said in October creditors would receive more
than R104 million in repayments from consumers "that without the
NCA and debt counselling they would have either had to write off or
spend millions more in costly legal battles trying to get the money
back."
Delays are also being experienced because in terms of the August
declaratory order from the Pretoria High Court jurisdiction now has
to be in the court closest to the consumer and this has led to debt
counsellors having to move many applications to new courts. While
the declaratory order strengthens the rights of consumers its
initial application is adding to delays.
Snyman said moving cases to new courts added to concerns from
debt counsellors that not all judges and especially magistrates
were familiar with all the ramifications of the National Credit Act
and the declaratory order. "There have been studies done by the
National Credit Regulator, the Pretoria Law Clinic and others that
have shown courts, especially those away from the major
metropolitan areas in Gauteng, the Western Cape, KwaZulu Natal and
Bloemfontein often have officials with scant knowledge of the
provisions of the NCA and this can create problems for consumers,
debt counsellors and creditors.
"We call on the Department of Justice not only to look at ways
of extending court hours or bringing in special measures to speed
up court hearings, but also to introduce extensive and ongoing
training or retraining of court officials on not only the National
Credit Act, but all legislation that pertains to debt especially
garnishee orders where we often see consumer subject to unfair or
incorrect application of the law or regulations."
Snyman said the guidelines put together in 2007 for debt
counsellors, "also need to be reviewed because so much has changed;
more emphasis needs to be put on the training of debt counsellors
and the staff of credit providers."
FOR FURTHER INFORMATION www.consumerassist.co.za 0861 21 22 23 debt counselling call centre
Andre Snyman - CEO - Consumer Assist
aurelia.espag@consumerassist.co.za / 011 654 6018 (Languages: English, Afrikaans)
Source: Charlene Smith Communications(CSC)
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