There has been a phenomenal increase in the number of complaints received by the Non-bank Credit department during 2012 compared with 2011. The trend continued in the last quarter, with a 19% increase in the number of disputes opened compared to the previous quarter and 57% increase year on year.
“Our experience with complaints received shows that consumers whose accounts are in the collections process often have disputes or queries with their credit providers regarding the collection,” says head of the legal department, Reana Steyn.
She adds that account issues far exceeded any other category of complaint.
A new trend that is of special concern, is the numerous complaints regarding garnishee orders.
Steyn says typical complaints relating to garnishee orders are that consumers dispute the fact that they were ever informed about the fact that the debt will be deducted from their salary and that although some consumers acknowledged the debt, they disputed that they signed consent for the judgment or garnishee order.
“Many consumers allege that they were ‘tricked’ or unduly pressurised into signing the consent to judgment documents as the tracers either did not explain the true nature of the documents to them or alternatively they were too embarrassed at their workplace to ask all the necessary questions or take half an hour to read through fairly complicated legal documents and simply wanted the tracer to leave as soon as possible,” says Steyn.
Consumers also queried the amounts payable in terms of the garnishee order, especially in cases where the employer’s records showed a zero or very small outstanding balance. This amount often differed vastly from the amount being claimed by the collection attorneys as the outstanding balance. The reason being the interest and legal costs were added to the account at the attorneys office which the employer and consumer is totally unaware of, until they make this enquiry. “Consumers are shocked to find that the debt that they thought was just about paid off, still runs into thousands.“
She says the office assists consumers to obtain detailed statements from the collecting attorneys or the credit providers and then assesses the accounts to ensure there are no unlawful or unnecessary charges added. “We also check that the correct amount of interest is calculated and added and that the “in duplum” is not exceeded,” she adds.
In some cases, consumers do not dispute the garnishee or debt, but simply cannot afford the monthly instalment amount and request assistance to have it reduced.
The Office of the Credit Ombud continuously interacts with its members in order to highlight any issues regarding the statements of account as well as any other recurring issues.
“At the same time, we assist numerous consumers, not only those who log disputes, but also hundreds of consumers who phone our offices for advice,” says Steyn.