Check Those Balances in March
Due to many factors the balance consumers see each month in their Payment Distribution Agent (PDA) statements may differ from the balances that the banks are working with. Reconciling the two has become a large part of debt review as consumers near the end of their repayment plans.
Because interest calculations may work slightly differently and on be done on different dates (or even times) there may be a slow creep that happens between PDA and bank balances. Some credit providers are slow to implement court orders or remove certain fees (which they have agreed to remove). This can also cause the calculations to differ. Differences tend to grow over time as interest and fees compound. This then creates a large gap between the figure that consumers see (and think to be gospel) on their PDA statement and what the bank’s computers are working out.
Some banks have a window within which they don’t stress because they know the figures are not 100% accurate and will eventually need to be adjusted. However when the account balances and or arrears exceed this window then it can result in the bank trying to get out of the debt review by sending a Section 86(10) intent to terminate letter. Then it becomes a pain to get the figures sorted out and the matter put back into debt review (perhaps by a Section 86(11) defense at court).
One way to reduce all that stress is to try to reconcile the balances along the way. Standard Bank offers the opportunity to Debt Counsellors to send them a password protected excel list of all their clients’ accounts and they will then send the bulk balances they have for the entire list. These can be compared against the balances showing on the client’s side.
Debt Counsellors who want such a list can email: DebtReviewServices@standardbank.co.za
‘Standard Bank offers the opportunity to Debt Counsellors to send them a … list of all their clients’ accounts and they will then send the balances they have for the entire list.’
Some banks (like Nedbank) and credit providers (such as Consumer Friend) have begun to integrate their computer software systems with that of the PDAs so that these figures can be pulled automatically. This cuts down on a lot of work.
Reconciling the two balances can take a lot of accounting ‘back and forth’ and is very time consuming but generally assists consumers to avoid having to pay more than necessary on any of their debts. Each month consumers pay a small aftercare fee to their Debt Counsellor which helps cover the cost of such processes.
Some consumers who try to ‘drop’ their Debt Counsellor and refuse to pay their required monthly aftercare fee can soon find that the complexities of debt review are well worth a few extra Rand each month. Ultimately, such consumers often end up paying much more for their debts than they actually need to.