Draft Debt collectors Amendment Bill published

The Department of Justice and Constitutional Development invites you to comment on the proposed Debt Collectors Amendment Draft Bill.

The Bill marks a departure from the current position in that it seeks to subject attorneys who do debt collection to the jurisdiction of the Council for Debt Collectors in terms of the Debt Collectors Act (No 114 of 1998). 

The Bill seeks to amend the Debt Collectors Act 1998, so as to :
▪ amend and insert certain definitions; to make the Act applicable to attorneys;
▪ make provision for the registration and regulation of debt collectors interns;
▪ provide that the list of registered debt collectors may be submitted to Parliament electronically;
▪ further regulate the processes dealing with improper conduct of debt collectors;
▪ provide for the payment of admission of guilt fines by debt collectors in respect of certain cases of improper conduct;
▪ provide for the appointment of inspectors to assist the Council for Debt Collectors with investigations of complaints against debt collectors;
▪ empower the Council for Debt Collectors to tax or assess any account or statement of costs;
▪ further regulate the administration of trust accounts of debt collectors;
▪ extend the matters in respect of which regulations may be made;
▪ empower the Council for Debt Collectors to delegate certain of its powers and functions;
▪ empower the Council for Debt Collectors to exempt debt collectors from certain requirements of the Act; to require the Rules Board for Courts of Law and the Council for Debt Collectors to make recommendations to the Minister on fees and expenses payable in respect of debt collection.

Please follow the link to the Bill.


Unclaimed benefits tracing efforts paying off

The efforts by members of the Association for Savings & Investment SA (Asisa) to trace the rightful owners of billions of rands of unclaimed benefits in life assurance policies, and those of the Financial Services Board (FSB) to pressurise retirement funds to do the same are starting to pay off.
This week, Asisa said that between implementing its “Standard on Unclaimed Benefits” for the life assurance industry in June 2013 and June this year, life companies had traced and paid 431 364 policyholders and beneficiaries.
Peter Dempsey, the deputy chief executive of Asisa, says that 757 791 policyholders and beneficiaries must still be traced.
The amounts of money paid out and still unclaimed are not disclosed, because Asisa members are not required to report on the value of the unclaimed benefits. Dempsey says the aim is to encourage the tracing of policyholders and beneficiaries rather than measuring the value of the assets involved.
“The good news is that just over one-third of ‘lost’ policyholders and beneficiaries have already been traced and paid their benefits,” Dempsey says.
He says the Asisa Standard currently applies only to unclaimed long-term assurance benefits. This will change in January next year when it becomes effective for collective investment schemes as well.
He says Asisa is engaging with the FSB on extending the principles contained in the standard to cover unclaimed pension fund benefits.
Rosemary Hunter, the deputy FSB executive in charge of retirement funds, announced that the FSB is to step up its campaign to reduce the massive R20 billion owed to 3.07 million fund members or their dependants in unclaimed retirement fund benefits as well as blocking “charlatans” who are seeking to exploit the situation.
Beneficiaries include “lost” former retirement fund members as well as widows and orphans entitled to the benefits of members who died before retirement.
Measures include:
* Increasing pressure on retirement funds and their administrators to trace beneficiaries;
* The establishment by the FSB over the next two years of a searchable central database, which will include the names of all people who have not claimed their benefits; and
* Issuing FSB guidance notes to the retirement industry on unclaimed benefits.
Dempsey says the total number of policyholders to be traced will always be a moving target, because there will always be policyholders who do not update their contact details and beneficiary details.
He says the reports received from member companies show at least four different tracing initiatives for each missing beneficiary case, including the use of tracing agencies, private investigators, the Department of Home Affairs and credit bureaus.
Assurers are also using social media, especially Facebook and LinkedIn, and approaching professional membership bodies.
Some examples of people who have been tracked and benefited from the Asisa campaign are:
* An 81-year-old policyholder, who had forgotten about his investment policy and did not have medical scheme cover, was able to afford a back operation.
* An elderly couple could visit their children whom they had not seen in more than three years due to financial constraints.
* A widower, whose wife died two years earlier, did not know that there was a life cover benefit payable to him. He was left to pay medical bills and raise the couple’s teenage daughter and desperately needed the money.
* The daughter of a deceased policyholder was able to open her own business with the proceeds of a death benefit due to her.
If you do not want benefits owed to you or your beneficiaries to become unclaimed benefit statistics, you must:
* Ensure that you check and regularly update your contact and identification details with your life company, collective investment scheme company and retirement fund.
* Ensure that you name beneficiaries of your life assurance and retirement fund benefits and provide their contact details and identification numbers.
* Make and maintain a list of all your investments, life assurance policies (including funeral policies) and retirement funds, with the name of the company and details of the product, such as policy numbers and retirement fund membership numbers. Tell a trusted relative where the list is kept, or give it to the person you have nominated to be the executor of your estate.
Many people suspect that they may be the beneficiary of a life assurance policy but do not know how to go about making a claim. The Association for Savings and Investment SA (Asisa) says you should do the following:
* If you know the name of the life assurance company that issued the policy, you can simply call the company. The assurer will ask you to provide information that shows that you have a real and legitimate interest in the policy proceeds. The company is required to provide you with feedback within seven working days.
* If you believe that you or a deceased relative may have had an assurance policy (life cover or an investment policy), or you come across an old policy contract in your files but are not sure of the assurer’s details, Asisa may be able to help. On the Asisa website (www.asisa.org.za) click on “Contact” and then scroll down to “Lost Policies”. Download the Lost Policy form, complete it, and either email or fax it to Asisa. This form will be circulated among Asisa’s member companies. The life assurers will check the details against their records and if there is an existing policy, you will hear from the company within seven days.
The company will, however, need to ensure that you have a valid interest in the policy.


ANC's Mchunu says SA is drowning in debt

Durban – KwaZulu-Natal ANC chairperson Senzo Mchunu on Saturday said South Africans were getting deeper and deeper into debt.
Speaking at the two day Provincial General Council at Coastlands Hotel in South Beach, Mchunu said going into next week’s National General Council, the party would focus on policies affecting both the employed and the unemployed.
“Our policy making, implementation and review by nature should always be founded on socio-economic conditions that we see prevailing out there and affecting our people in different ways, this includes the employed and the unemployed,” he said.
He said while the government focused more on the country’s high unemployment rate, there were challenges affecting the employed.
“In December 2014, a report by the Credit Consumer Monitor stated that South Africans are over-burdened by debt. We are increasingly drowning in debt including those that are employed.
“At the time records showed that out of 22.84 million credit active consumers, 10 million have an impaired credit record.”
Garnishee orders
This means that 10 million people have received judgements and bad credit records, said Mchunu.
“The Public Service Commission in 2008 released information that public servants such policeman, nurses and teachers were the ones who were drowning in debt.
“Money collected from public servants was about R1.1bn in 2006 and 2007. If public servants were owing this much alone and they were employed, then you realise that there is a problem.”
Mchunu said government officials on salary levels 6, 7 and 8, were the ones who were served with garnishee orders the most.
“In the 2014-2015 financial year, money collected from employed people by government in KZN alone was R188m.
“The issue that affects policy here is garnishee orders. We need to look at all the laws and regulations pertaining to that policy.”
Mchunu said the government needed to help people in debt.
“There are many areas we need to look at like how the courts apply the law when it comes to garnishee orders.
“Some people get garnishee orders even when they haven’t appeared in court. Sometimes money is taken without your permission, sometimes you are overcharged, sometimes there is duplication and other times once you have paid off the debt, they continue to charge you.
“There are many things that lead to employed people getting deeper and deeper into debt even when they are employed, especially public servants.
“We need to look at whether we have adequate policy, laws and regulations that seek to cover these people, especially public servants, if we are to protect them against what may seem to be unfair policy on garnishing orders.
“We need to look at every section of society that is affected by policy especially those that we take for granted that they are well-off,” said Mchunu.


'Impaired credit at record high'

Lethabong – The number of South Africans with impaired credit records has reached its highest ever levels, SA Communist Party general secretary Blade Nzimande said on Sunday.
“The National Credit Regulator has just released a report that South Africa has reached its highest levels ever in terms of people with impaired credit records. All because of the drive to make profits at any cost by finance and financial institutions, including through reckless lending,” he said at the launch of the SACP’s Red October campaign at Lethabong, near Rustenburg in North West.
This year’s campaign focuses on transformation of the financial sector and the media.
“It is estimated that there are 19 million credit active South Africans who have such impaired credit records. More than 11 million were categorised as over-indebted.
“The loans and high interest rates that millions of our people owe means that they are more working to pay banks and micro lenders, than to look after themselves, their families, and meet their basic needs,” he said.
The SACP was not opposed to credit for productive use and investment.
“What we are opposed to is reckless lending practices that result in indebtedness and over-indebtedness for nothing but consumerist spending.”
It was estimated that around 10 000 homes a year were being repossessed by the banks.
“This level of eviction can only be comparable to apartheid-era group areas removals. The homes are then sold at auction, very often at a fraction of their market value. The worst case scenario involved a house sold at R10, and a house taken away for nothing but corruption involving the concoction of title deeds; the owner was dispossessed and jailed for a while. All this is inhuman,” Nzimande said.
The SACP would raise with the National Treasury the whole processes relating to bank repossession of people’s houses with a view to instituting an investigation.
“The SACP is calling for corrective regulatory and legislative steps to build a humane system of handling these matters in a way that puts people first.”
The SACP would also ask Chief Justice Mogoeng Mogoeng to institute an investigation into the whole process of authorisation of house repossessions.
The Red October financial sector campaign was pushing for a new financial sector structure, he said.
“We are pushing for a financial sector and banks which will serve the people. We are pushing for an end to private monopoly domination of the banking sector. We are calling for diversity, for a greater enabling environment for the development of workers and people’s co-operative banks.”
Government had done relatively well in terms of investment in infrastructure by investing a trillion rand over five years.
“This has helped somewhat in cushioning our country from the worst of the impact of the global capitalist crisis that erupted in 2008,” he said.
“The SACP is, however, concerned that not enough resources in the private capitalist financial sector is going into investment into infrastructure, manufacturing, SMEs or co-operatives. Instead, too much of its resources are going into financing shopping malls and consumption.”
He said financing for industrialisation and infrastructure, SMEs, and co-operatives would be at the centre of the campaign.
“Such financing will play a big role in creating the much-needed jobs in our country.”
The SACP’s financial sector campaign 15 years ago, in 2000, had gained victories.
“We won a whole raft of legislative measures, including the establishment of the National Credit Regulator, the Co-operative Banks Act, and the regulation of the conduct and activities of credit bureaux,” Nzimande said. – African News Agency (ANA)