Bad Press for Debt Counselling Firm

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Bad Press For DC Firm Questions Marketing Practice

A consumer who lost his car has turned to the press in an effort to highlight his plight. The consumer recently lost his car to the bank which hit hard.

Mr Johannes Miti, who is a military veteran who lost an arm in 1987, says that he just had a chat with a call centre agent at African Debt Advisors and discussed how debt review could help him but was not prepared to commit. Later he found out that he had been put under debt review and could not access more credit.

After a chat with the Debt Counsellor, he later decided to go through with the process and began to make payments but then things went sideways.

Wesbank Decide To Leave The Debt Review And Rather Sue

Wesbank soon felt that they were not getting the funds promised and began to send scary messages, legal letters and later even went to court to get a warrant to collect (and potentially sell) the car.

The relationship between Mr Miti and Debt Counsellor Washeemah Isaacs then fell apart. Accusations and allegation began to fly and Mr Miti feels wronged by the Debt Counselling process (and Wesbank of course who took his car).

The Media Latch Onto The Story

Central to the article which was published on IOL.co.za is the use of an external marketing company (the one who first contacted the consumer) and consumers who end up registered on the NCR’s database without being fully committed to the process. A recent court ruling has highlighted that the National Credit Act makes provision for leaving the process only after paying off all small debts (including cars) before the process ends. This highlights how consumers who enter debt review need to be really committed to finishing the process or risk being cut off from credit perhaps indefinitely (until the law is amended in the future).

Other Debt Counsellors have warned consumers off of chatting to anyone who calls to talk about debt review and rather advocate going into a local branch of a debt counselling practice and talking to a local Debt Counsellor.

One of the big issues which has come to light during the matter is that Wesbank took this Cape Town resident to High Court in Gauteng probably knowing that the consumer (who is obviously strapped for cash) would not be able to go and defend his matter or afford to pay for legal representation in Gauteng to do so.

The Legal Battle

Though there were existing issues with the original legal work that was done by another legal firm in 2017, Cape Town based debt review specialist attorneys Liddles were called in this year to try and help the consumer. Admittedly the cards were stacked against them and the consumer at this point.

‘They went to court and argued that the matter should be heard locally since the consumer lives in Cape Town. The courts disagreed…’

They went to court and argued that the battle over the car should be heard locally since the consumer lives in Cape Town. The courts somewhat surprisingly disagreed and felt that because the consumer made the agreement with Wesbank electronically and they are based in Gauteng the matter should and would be heard in a High Court across the country.

This then happened. The consumer was unable to afford to defend himself across the country in the expensive High Court and so Wesbank* got permission to recover the car from the one-armed Veteran despite his being in debt review and making payments. The courts upheld this decision and felt it was within their contractual rights and in line with the National Credit Act.

Questionable Marketing Practices?

The original debt review plan and papers that were used back in 2017 have been called into question and criticised for a number of reasons and has been made worse by Mr Miti claiming he never wanted to enter debt review and that he cannot explain his signature on application documents. He also relates that the call centre agent who called him at first gave the impression they were working with the National Credit Regulator (NCR) and that they were offering consolidated loans.

‘The article and coverage, unfortunately, paints the wonderful debt review process in a rather poor light’

The article and coverage, unfortunately, paints the wonderful debt review process in a rather poor light. What is clear is that the consumer feels wronged and upset and has now lost an asset he would rather have kept. It touches on two of the big issues in the industry right now: (1) Consumers “entering” the process too easily and with low levels of commitment and (2) consumers later not being able to walk away from the process as they are able to do with so many other types of contracts and services in other industries.

If you are interested in debt review then, by all means, talk to your local Debt Counsellor and find out how the process works. If you do not want to enter the process yet, then please do not sign anything (especially an application form 16). Be aware that if you respond to an sms or email offering debt review help that this may indicate that you want to begin the process of a review of your debt situation and this should only be done if you are having serious debt issues.

 

 

 

*Please note that Wesbank has a dedicated debt review department that works with Debt Counsellors daily to help consumers retain their cars through debt review. The bank also has other departments who pursue legal action outside of debt review.