Debt Review Removal Scam Warning Signs
Debt Review Removal Scams – Things To Look Out For
When a person officially applies for debt review the Debt Counsellor they apply to notifies the National Credit Regulator (NCR) that they are looking for official help and uploads their application document. The NCR in turn notifies the various (13) credit bureaus that this person is looking for serious help with their debt and has applied for an official ‘debt review’. The credit bureaus then put a small note on the person’s credit record that they have asked for a debt review. This flag will be there until a Debt Counsellor sends the credit bureau a form saying that all the consumer’s debts have been paid off and they are debt free (or only have a bond left to pay off).
‘Many people who begin debt review but do not follow through with the process later try to get more credit’
Many people who begin debt review but do not follow through with the process later try to get more credit (which they probably can’t afford since they have so much debt anyway). These people are disappointed when credit providers (who don’t want to give them credit they cannot actually afford anyway) tell them that they cannot do so because there is a note about a debt review on their credit report. These consumers get disappointed and confused thinking that this “flag” as it is sometimes called is all that prevents them from digging themselves deeper into debt.
Such consumers can easily be lured into a debt review removal scam by adverts on Facebook or Google making promises that cannot actually be delivered upon.
Credit Bureaus Listing
The credit bureaus only list that a person has applied for debt review. That’s it. They never bother to show whether a person is paying their debt review according to the requirements of the court or if the court order has been granted or how long the person still has to go or anything like that. They have the easiest job of just adding a note and then sort of walking away.
When it comes time to remove the listing they demand all sorts of documents and proof from the Debt Counsellor to show that the consumer’s debts are paid up (which the individual credit providers are meant to automatically supply once the debt is paid up anyway).
Without all these documents the credit bureaus will just leave that “flag” there until they are eventually told by a Debt Counsellor to remove it (or sometimes a court or the NCT or occasionally due to very weird circumstances the NCR).
Taking Advantage Of Desperate People
People who are desperate to dig themselves deeper into financial debt are easy targets for scams. One such common scam is the promise of removing a debt review status at the credit bureaus even though the consumer has not paid off all their debt and even though a Debt Counsellor has not certified that they have paid off all their debts. Many sharp scammers are making money off people and charging amounts such as R3000 a time or more to supposedly help consumers.
‘One such common scam is the promise of removing a debt review status at the credit bureaus even though the consumer has not paid off all their debt’
Here is an example from Facebook of such an offer:
Immediately we notice a few issues.
- They use the NCR logo pretending to be linked to them somehow*
- They talk about ‘blacklisting‘ something that does not exisit
- Their grammar is bad (eg. no question mark at the end of the first sentence)
- ‘Let Help You‘ – say not more they didn’t even proof read their own group description
The NCR recently sent out a warning circular about companies and individuals who use their logo without consent and who advertise misleading things such as debt review removal.
Read Now: NCR Warn About Misleading Adverts
Delving even deeper into the group description there are more unrealistic promises which makes you realise what you are dealing with:
There is a promise of such fast turn around time that somehow the person applying (and no doubt paying a big fee) will have ‘the festive season’ – as if you may be excluded from this time of year if you don’t apply. The group was only created in October 2020 (another warning sign) and has racked up a bunch of followers (over 1500 people). So, it is obviously popular and why wouldn’t it be with the reality that many consumers have botched their debt review.
Stuck In Debt Review?
The sad truth is that hundreds of thousands of consumers have begun the debt review process and then stopped partway through. The National Credit Act (NCA), as initially written, never even gives this situation consideration. It talks a lot about credit providers trying to get out of helping consumers but the lawmakers never gave consideration to the possibility that some consumers would fail to make their monthly payment towards their debts (which can happen due to changed circumstances or just lack of follow-through by consumers). What has become evident over time is that consumers with debt problems often lack follow through on repaying even when they have the opportunity to pay much, much less towards their debts each month.
‘It is estimated that between 600 000 and 1 million consumers are affected’
Informal industry agreements on the topic have been made, further trapping such consumers in this strange doldrum with no escape route other than finally getting their act together and paying off their debts as well as pay off fees they missed while not in the process. It must be said this is the purpose of debt review: to get people to pay off their debts in a manageable way and in a reasonable time period. It is not about avoiding debt responsibilities. It is now estimated that between 600 000 and 1 million consumers are affected. This is a massive portion of South Africa’s credit users and is effectively stopping credit providers from being able to do business with these consumers (who legally probably can’t afford new credit anyway). That is a lot of people who are used to using debt to finance their lifestyle and needs.
Credit bureaus have been given a free pass to hold these consumers to ransom and do very little work whatsoever in regard to debt review cases. it seems unlikely they will ever be asked to do more than slap on a quick note and walk away from any further reporting on the debt review and the consumer’s progress.
As a result, so many people are now stuck with a debt review status at the credit bureaus that more and more are falling for debt review removal scams.
If you are struggling to repay your monthly debt review payment please talk to your Debt Counsellor who will reach out to your credit providers for you. Do it urgently.
*please note that we have not displayed the full logo of the NCR and are not directly linked to them and do not wish to give this impression. We are merely showing an example of what one facebook page is displaying. We are party to emails to the NCR letting them know about this use of their logo.