The National Debt Mediation Association (NDMA) released statistics of the complaints and enquiries it handled for the third quarter of 2012. During this period, the NDMA helpline fielded 5,392 calls and dealt with a total of 704 enquiries, of which 697 (9
“Mediation continues to bear positive results as evidenced in the percentage of cases where successful resolution is achieved,” says CEO of NDMA, Magauta Mphahlele. “If the out of jurisdiction, withdrawn and referred cases are excluded, the percentage of instances where we found in favour of the consumer increased to 67%.”
She added that a comparison of the top five categories of complaints showed that there had been a decline in the number of complaints regarding vehicle repossession and termination from debt review. Legal action while a consumer is under debt review, property auctions and the rejection of proposals submitted through the Debt Counselling Rules System (DCRS) fluctuated.
Mphahlele said 24% of the cases dealt with by the NDMA were specific requests for debt mediation, where the consumer had received a section 129 notice, had temporary financial difficulties or opted for mediation. Of the 139 cases received in this category, 104 were finalised. Of those finalised, 52% were successful land 20% unsuccessful. 7% were referred to debt counselling or chose the consolidation route while 17% withdrew from the process either because they got family assistance, or were not prepared to make lifestyle changes.
Loss of employment, maternity leave, loss of spouse, illness and negative cash flow were the main reasons for request for assistance. Many of the cases were also already in the legal process or were previously in debt review and were terminated due to defaulting on the court order.
Debt Counsellors also submitted 9135 debt restructuring proposals through the Central Rules Engine. Of these, 88% solved and 58% were submitted to credit providers for acceptance. The bulk of the NDMA’s day-to-day work is spent on supporting the statutory process through resolving debt counselling disputes, getting credit provider buy-in, addressing reported non-compliance, managing the Debt Counselling Rules System (DCRS) and developing other technology solutions like the Central Data Switch (CDS).”
She added that the NDMA does, at the same time, have a broader role relating to alleviating financial hardship which entailed identifying blockages in and outside of the NCA and proposing solutions. This is borne by the recent call by the NDMA for affordability assessments to be standardised across industry, for reckless lending to be monitored and enforced by the NCR and for the abuse of garnishee orders to be paid attention to. In this regard the NDMA welcomes the statement issued by the Banking Association and the Minister of Finance on various measures to alleviate over indebtedness and address some of the market conduct problems.
“Non-adherence to court orders, slow responses, non-provision of certificates of balance and invalid terminations were prevalent amongst credit providers but these matters were in a majority of cases resolved amicably proving that mediation has a positive and essential role to play,” she added.