Debt Counsellor Asia Lamara of Consumer Finance Services (also associated with MSA) was recently fined R1 Million rand for not doing her job as a Debt Counsellor well.
It is said that Ms Lamara has over 90 000 consumers registered with the NCR under her name before she was recently deregistered. The National Credit Regulator (NCR) responded to numerous complaints against MSA and Ms Lamara and investigated her practice.
They were not happy with what they found and took her to the National Consumer Tribunal (NCT) over their findings. The NCT heard the matter after some delay tactics and after considering the written arguments decided to hand out a historic R1 Million fine to the Debt Counsellor. The ruling has since been appealed but let’s take a look at why this could be a good thing for the consumers, Debt Counsellors and the industry as a whole.
WHY COULD A RULING LIKE THIS BE A GOOD THING?
How can any Debt Counsellor getting fined R1 Million be a good thing? Naturally, you might say that this is in fact a bad thing. It could make the industry look bad and such a big fine could threaten the sustainability of the particular business putting, in this case, 200 people’s jobs in jeopardy and cutting off support to clients.
It is really no wonder that Ms Lamara has appealed the ruling. It is a massive fine with big consequences. Well, a little context is needed to fully understand why the NCR were so unhappy with the Debt Counsellor and how consumers say they were being negatively affected. This will help us understand the NCT’s ruling and why such a ruling could be a good thing going forward.
WHAT WAS SUPPOSEDLY BEING DONE WRONG?
The NCT ruling highlights many issues. Though it has now been appealed, let’s look at what was said in the ruling to spot possible issues.
Firstly, many consumers say they were being contacted by MSA and being invited to start debt review right away. People who worked in this marketing call centre were seemingly speaking to consumers as if they were able to do the work that only a NCR Registered Debt Counsellor is able to do. By the time the matters were then handed over by them to Consumer Finance Services, the ruling says that consumers were already being told they officially qualify for debt review and that they were being told how much they would now be paying on their debt. All of which was supposedly happening before the Debt Counsellor had seen a piece of paper with their names on and made any of those determinations. People who spoke to non Debt Counsellors at CFS were also confused by what they were being told and say they thought that the person they were talking to was also a NCR registered Debt Counsellor. This was all brought out to light various scripts that were presented during the case.
More than that, many consumers who spoke to MSA on the phone but then decided they did not want to commit to the process of debt review, were being speedily added to the NCR’s database of consumers who have applied for debt review. The NCR then trustingly went ahead and notified all the credit bureaus that these people were investigating debt review. Credit providers then proceeded to cut these consumers off from access to their credit accounts.
Another big issue mentioned is that it seems that the work that should have been done within certain time periods may not actually have been done. Some forms were not sent on time, data was not captured on time etc. This meant that consumers could still get pestered by credit provider collections agents since they did not know about the debt review. Many consumers complain of poor after sales support and after care from the Debt Counsellor. Not being able to get through to someone who can help you at a big company is a very frustrating thing as anyone who has ever called a bank or similar institution will confirm. Over 3000 of her clients have complained to the NCR that their matters had been terminated by credit providers because of work that was not done in time.
GOOD FOR AFFECTED CONSUMERS
The speed with which MSA and CFS registered people on the NCR database before they were 100% ready to commit to debt review caused a lot of problems for consumers who had just received an interesting phone call. For many, simply contemplating the debt review process but who then changed their minds resulted in total chaos. These consumers soon found that they were left stranded without access to their existing credit, which many desperately needed to cover living expenses, insurance payments or to pay for their rent. Some supposedly even lost assets. Thousands of frustrated people lodged complaints to the NCR and on forums like Hello Peter. Many consumers were confused about who they have been getting advice from. The papers show that call centre operators from both the marketing and the debt counselling arm said things that made them believe they were talking to someone who was qualified to tell them how to adjust their finances. They later felt tricked. Though this issue has been going on for years now without much visible progress these consumers can finally feel their complaints have at least been heard and acted upon to some degree.
If you are concerned that you might have fallen into the same trap contact our offices to find out how we can assist.
Reference : debtfreedigi.co.za/wp-content/uploads/2020/01/Debtfree-Magazine-Jan-2020-compressed.pdf