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In  recent Court Case ABSA offered the court some statistics regarding their issuing of Section 129 notices and how they go about doing these.

Here are some of the details:

 

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[12] When a consumer falls into arrears ABSA’s computers automatically generate alerts which may be conveyed to the consumer through sms messages or telephone calls, and an attempt is made thereby to secure a promise to pay from the consumer. All exchanges and events are recorded on a computerised system so that the history of the account can be monitored and accessed when that is necessary.

[13] Once an account has been in arrears for 31 consecutive days ABSA’s computerised system generates a section 129 letter which is sent by registered post. The significance of the 31 day period is that the consumer has missed two payment cycles if the account is in arrears for 31 (consecutive) days.

[14] If the consumer’s account remains ‘delinquent’ for more than 60 days ABSA usually sends out an official known as a ‘risk mitigation officer’ who will attempt to speak to the consumer at his or her home or place of work. This apparently often results in the situation being resolved. It is also at this stage that, for instance in the case of motor vehicle finance, the consumer may agree that the best course is to surrender the vehicle so that it can be sold.

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[19] ABSA’s home loan book is a large part of its consumer credit business by value, but forms a small portion of its business in terms of numbers of accounts or consumers. I have been provided with a table indicating the foreclosure instructions issued to attorneys in respect of home loans for each of the six months from December 2011 to May 2012. By my calculations the average number of instructions issued per month in that period was 881; and the average amount of debt involved in each of those months was R532 million. (These are ABSA’s figures for the whole of South Africa.)

[20] During the period January to May 2012 (five months) ABSA despatched some 5 195 section 129 letters in respect of unsecured loans

(some 3 803 of which had already been removed from ABSA’s balance sheet by reason of the extent of default).

In the same period 19 555 section 129 letters were sent out to consumers in respect of default on credit card debt.

[21] During 2012 ABSA’s computerised system has to date generated between 10 000 and 15 000 section 129 letters per month in respect of asset and vehicle finance.

(This section of the business has been worse before. In February 2010, 26 000 such letters were sent out. The deponent to the affidavit suggests as the likely explanation the fact that the prime rate of interest was then higher than it is now.)

[22] Finally, when a matter is handed over to attorneys the usual arrangement is that another section 129 letter is sent, by the attorney on this occasion, so that proof of despatch is readily to hand.’

It is interesting to see the stats in regard to how many of the issued Section 129 letters via registered post are returned unread/ collected:

Of the 1392 letters sent in respect of unsecured loans still on ABSA’s balance sheet, 66,3 percent were returned.

Of the 3803 letters sent in respect of unsecured loans off ABSA’s balance sheet, 70 percent were returned.

Of the 19 555 letters sent in respect of credit cards, 70 percent were returned.

It looks like the sheriff of the court is about to become a lot more busy.