Debt Counsellor Interview
Debtfree loves talking to Debt Counsellors and finding out how their business runs and what makes their business a success. This month in the Feb 2014 issue of Debtfree we interview well known Debt Counsellor Paul Slot.
How long have you been a DC?
I Completed the Debt Counselling Training before the implementation of the NCA and was registered as a Debt Counsellor in May 2007.
What did you do before becoming a DC?
I was employed by First National Bank for 25 Years. I joined FNB as an Executive Trainee after varsity and progressed to a senior position in FNB Corporate.
What do you feel makes your business a success?
Octogen is represented in most provinces and has a passion for assisting Consumer to manage and improve their personal finances. Octogen became involved in Personal Financial Wellbeing in 2000 and this early involvement enabled Octogen to make a meaningful presentation to Parliament when the NCA was considered in 2004/5. Today Octogen is still very much involved in Personal Financial Wellbeing and this includes Debt Counselling.
A good business always need good staff and for this reason all staff have to attend and pass (80%) a two week in-house course and attend regular addition training. It is also for this reason that Octogen sponsor employees to register as Debt Counsellors. At Octogen 58 employees have already passed the NCR Debt Counselling training and most are already registered or in the process of registration for Debt Counsellor with the NCR. Over the last 8 years Octogen has invested millions to develop a Debt Counsellor system to manage the complex Debt Review process. Ongoing system development remains a priority and a team of people is dedicated to this task. Because Debt Counselling is such an emotional and complex process and service to Customers and Credit Providers remains a key KPA for all Octogen employees. For example we have a dedicated team responsible for Client and Credit Provider queries, a dedicated Team responsible to manage and follow up on Consumer payments to Credit Providers, etc. Lastly process management and control is vital and for this reason daily process management is measured and controlled.
Where/how do you find new business/clients?
Satisfied clients and internet referral is key in our business. In addition our Financial Wellbeing programme is supported by many employers and other groups.
What is the biggest challenge facing Debt Counsellors at the moment?
Resolving queries with Credit Providers is very difficult and time consuming, Abuse of the withdrawal where the DC is not receiving any payment remain problematic. DC fee structure, Lack of a clearly defined Court process. Terminations by Credit providers – this is pandemic and lastly a NCA with many loopholes.
What is the biggest challenge facing your consumers at the moment?
The average Consumer who applies for Debt Review has committed 65% of their income on debt repayment and obviously they battle with balancing their budget. We often forget that consumers in debt review are required to reduce their lifestyle – this is difficult. In addition they have to, like all of us, face cost increases – this is difficult for anybody and in particular for our clients. Secondly ongoing harassment by Credit Provider product houses creates lots of unnecessary stress and conflict.
With bigger DC firms often, to ensure good turn around times, many staff are involved in a single application (in different aspects). Do you feel this causes the client to lose that “personal touch” from the DC?
No, to the contrary debt review is combination of administration tasks and Debt Counselling tasks. In Octogen we ensure that all Debt Counselling task are performed by Debt Counsellors and admin tasks by admin people or specialists. In addition our administrative staff has to pass our internal a 2 week Debt Counsellor course with at least 80%. For this reason we also employ Attorneys and other Specialist. For instance; the process of restructuring the Consumer budget can only be done by a Debt Counsellor in consultation with the Consumer and the negotiating of a legal issue with a Credit Provider is best done by an Attorney. Debt Counselling is a complex process and business and our Clients benefit from the best skills available for every part of the process. The process we follow is not different from any Debt Counsellor with more than 50 clients who has no option but to employ staff. The critical part is that Debt Counselling functions can only be done by Debt Counsellors.
You are President of DCASA and attend the CIF meetings and DCASA NEC meetings. How do you balance the time needed for these “extra” activities with your business needs?
At Octogen we have made a conscious decision to play an active part in building the Debt Counselling Industry. This policy has not changed since 2007 and looking back we believe we have made a difference in the Debt Counselling Industry. We see the time spend on industry matters as an investment in the future. If I was paid for every hour I spend on industry matters I would been a wealthy man.
Do you feel that most DCs will eventually register with the NCR as ADRAs?
Before this can happen the role and function of an ADR needs to be defined and the NCR needs to publish registration conditions.
Some people complain that there is too close a relationship between your company and DCASA. What is your view?
The real question is if DCASA has improved the Debt Counselling industry and we firmly believe this is the case. We were founding members of DCASA when there were only 30 registered DC’s. Nobody was prepared to tackle the problems and/or take on the Credit Providers and/or the NCR. In the first NCR meeting DCASA was told to take a hike by the NCR. We decided to tackle the problems and we still do. Octogen has been involved in the Training or Debt Counsellor, DRAC, Task Team Agreement, Debt Counsellor Support, Magistrate Training, Industry meetings, Industry papers and many more. This has taken hundreds of hours of people employed by Octogen and very important also by and other DCASA members who has used their skills to make a difference. But in every association or club the majority of work is done by a few. A recent example will illustrate the point. In CIF the withdrawal process is under discussion and DCASA requested input from all DCs in the country. The result – no more than ten lines of complaints from DC’s despite the severity of the issue. Over the last week I have used the skills that I am blessed with to finalise a 14 page proposal to CIF. If people complain about the close relationship between DCASA and Octogen do they mean I must stop doing what we do in DCASA or for the industry? DCASA is a democratic organisation and the NEC is elected every 12 months. Debt Counselling is still young and we believe we still can add value to the process. In addition there are only about 750 active Debt Counsellors in the Industry and we should all be working together to protect and build the industry.
Do you think Twin Peaks could possibly negatively effect debt review?
The NCA is here to stay. 10 million Consumers need help. I believe Debt Review is a meaningful solution to Consumer and for this reason Consumers under Debt Review pay R400 million every month to Credit Providers. If Debt Counsellors work together and make a meaningful impact on assisting more Consumers then the future of the industry is secure. When we receive a letter from a client who says we have assisted to rescue her “life” then I know we are fulfilling the purpose of the NCA. If we continue to make a different Debt Review will get stronger no matter what.
Why do you think the banks insist on every last cent from Debt review consumers while writing off large amounts for non – debt review clients when collecting through attorneys?
In terms of the NCA Credit providers have right to collect the money and interest as per the credit agreement. Despite this Credit providers have agreed to concessions to reduce interest rate and fees. This is a voluntary agreement and the reason why they do this is to assist Consumers repay a reduced amount. When a credit provider writes off debt this does not mean that are not going to collect the debt. They appoint a Debt Collector, who adds more costs, and then collects. If this is not successful they obtain a garnishee. The benefits of debt review far exceed the additional cost of traditional collection.
Do you feel it is short-sighted of Homeloans departments to try get bonds terminated/removed from a debt review?
Absolutely. This is an abuse of the termination process and should be stopped in the amendment. In the same breath we should add that a bad repayment plan offered by a Debt Counsellor is also not good.
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