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The National Debt Mediation Association (NDMA) – a credit provider representative body (originally setup some say, to divert consumers away from the legal debt review process as established by the NCA) has recently been tasked with representing and collecting complaints for credit providers (NDMA members) including the big banks of BASA (the Banking Association of South Africa). This has seen them swamped with a growing number of complaints against credit providers, particularly in relation to debt review matters. Magauta Mphahlele, chief executive of the NDMA has said that the most common complaints to the NDMA relate to the termination of debt counselling cases.

This is done when Credit Providers decide not to continue co-operate with the debt review process and send a consumer a notice called a section 86(10) notice. This is often followed by a summons and court case. This often despite consumers paying according to a restructured plan submitted to a local magistrates court by the consumers debt counsellor. Most of these matters eventually end up back in the debt review process through what is called a section 86(11) ruling however it can cost consumers extra funds and cause consumers extra stress. Since the creditors often have to cover the legal bills it is also costing them extra funds.

The NDMA describes itself in this way:

 

 

 

 

The National Debt Mediation Association (NDMA) is a not-for-profit organisation established by the credit industry as a conduit for collective efforts to combat consumer over-indebtedness. The initiative was driven by the recognition that over-indebtedness and the financial distress of consumers can have a detrimental affect on society and on the sustainability of the credit industry.

Mz. Magauta the NDMA CEO has recently made seemingly disparaging comments about the debt review process such as:  “The debt counselling process can give relief in extreme cases of over-indebtedness, but it is not meant for everyone and can be expensive (debt counselling fees alone can cost up to R6 000) and time-consuming. We’d like to see consumers being offered alternative self-help and voluntary options that are more affordable.”

Many Debt Counsellors charge a lot less than this maximum fee of R6000.00 and all offer consumers an extremely valuable service. One that helps them not only restructure their monthly obligations so that they can afford the necessities of life each month but also in many cases, save thousands of rands in the long run. all under the protection of the National Credit Act.

In 2011 the NDMA were able to help 75% of the consumers who complained to avoid having to go to court and fight with credit providers about their matters. 2011 saw 3 times as many complaints lodged with the NDMA than the previous year and with the recent spate of 86(10) letters sent out by Credit Providers (mainly the large banks regarding houses and cars) the 15 NDMA staff members look set to be busier than ever in 2012.

Many Debt Counsellors advise consumers to contact the NDMA should they have problems relating to their credit providers. For example many Credit Providers stop sending consumers regular statements when they enter debt review. Getting this information is a consumers legal right. If this has happened to you please contact the NDMA and complain.

To lodge a complaint with the NDMA, email info@ndma.org.za or telephone 086 111 6362 or visit www.ndma.org.za, You can also download the NDMA complaint form on our website HERE