In the first half of 2012, Angelique Arde wrote an article in personal finance highlighting the 10 questions to ask your debt counsellor. The industry seems to have adopted a number of changes, but Pay Plan Solutions decided to answer the questions again and provide their reasons why they thought it was still the ten most relevant questions to ask.
What is your registration number with the National Credit Regulator?
Still the first and most important question to ask. The Financial Services Board are forever cautioning investors about investing with unregulated and unregistered investment advisors and the NCR will no doubt have to be ever vigilant for the same reason. Registration and accountability go hand in hand. With the amendments to the Credit Act nearing completion, one message is clear. Payment Distribution Agencies (PDA), or the Debt Counselling Industry’s version of Trust Accounts will be regulated, and for the consumer’s protection, probably be the most regulated entity in the credit industry. Even the most controversial Alternative Dispute Resolution Agents (ADRs) should soon be regulated, all ensuring consumer protection.
Are you a member of the Debt Counsellor’s Association?
Pay Plan Solutions is not only a member of Debt Counsellor’s Association of South Africa (DCASA), but its management have served on the National Executive Committee. There are currently other associations in the industry, but DCASA have singled themselves out by focusing on compliance with the industry codes of conduct, the same codes that the Regulator is using as the basis for its own codes which will be promulgated hopefully early 2014. DCASA’s president, Paul Slot was also instrumental in forming those codes, again providing extra protection to consumers as well as huge concessions the Act might have struggled to achieve in its current format.
Which PDA do you use?
This again seems to be self-explanatory, and is nothing new to financial and legal services of many kinds. Three remain, and as mentioned, all three need to be complaint and innovative at every turn.
Do you use an accredited debt counselling system?
The codes of conduct have given the industry a rules system which has been pre-approved by a very large portion of the credit industry. Why is this important? Simply put, the concessions under this system not only reduces interest rates and extends the repayment period, but also strips out certain monthly service fees. Complaint Credit providers and Debt Counsellors have welcomed the system which is designed to treat credit providers fairly and dramatically reducing the amounts repaid under the plans. It has also allowed compliant Debt Counsellors to pass savings on to consumers in terms of legal fees.
Are you being investigated by the NCR?
The investigations of non-compliant Debt Counsellors and Credit Providers have been extensively reported in the media and many have been closed down.
Do you follow the NCR Task Team Restructuring rules, commonly now known as DCRS? More than a third of all proposals are now done with this system despite the fact that it is more labour intensive than previous systems. Why would Pay Plan go to these lengths for its clients? Quite simple, reduction in interest and fees, and because Pay Plan strive to get 100% acceptance on all proposals made it allows them to rubber stamp agreements with the Tribunal instead of putting clients through the added pressure of appearing in front of a magistrate.
Is you fee structure in line with the NCR guidelines?
Added to this it is important that all debt counsellors take their fees via the PDA, as it shows transparency to all parties concerned from Credit Providers to clients.
Which attorney would you use to represent me in court?
Thanks to the National Consumer Tribunal, Pay Plan can now save clients the difficulty of taking time off work to appear in front of a magistrate.
Are you planning to leave the industry?
Pay Plan Solutions has been operating since the earlier years of the industry, and has been at the forefront of the compliance of personalised services and client protection.
How does Debt Review work?
Pay Plan Solutions regularly does employee financial wellness talks which outlines the correct Debt Review process and also touches on issues surrounding the industry that impact on consumers. Employees who are debt stressed will not be able to focus on work until situations are brought under control.