Tag Archives: CIF

CIF: DCRS Enhancements

Reading Time: 2 minutes

CIF Update on DCRS

Many years ago credit providers and Debt Counsellors agreed to a set of concessions that credit providers were happy to make if consumers, in turn, met a certain set of parameters. These beneficial concessions can help consumers save money while repaying their debts through debt review*. The process also helps speed up negotiations between credit provider and Debt Counsellor on the consumer’s behalf before the proposal is set before a Magistrate.

Balloon Payments Sink DCRS

Although the DCRS system, as it is known, works well there has been a limited amount of adoption by smaller Debt Counsellors. Most of the larger Debt Counselling firms are eager to use the system and get these benefits for their clients but has hit some roadblocks recently. This was in part due to the prevalence of balloon payments on newer vehicles. This meant that in some cases consumers with new cars could end up being asked to pay even more than their current instalment before entering debt review. Since a major goal of debt review is to reduce monthly costs to a more affordable amount this was counterproductive and problematic.

‘there has been a limited amount of adoption by smaller Debt Counsellors’

The CIF set up a subcommittee to look into the matter and engaged with vehicle financing credit providers (such as Wesbank, MFC etc). These credit providers have now said they are willing to extend the repayment period much longer than was originally planned. This means that proposals made on such vehicles through DCRS will now ‘solve’ or work out.

Z File

Most Debt Counselling firms quickly developed an Excel spreadsheet to see if a consumer’s accounts would be repayable via a proposal made through DCRS or not when they apply for help. This was because one problem with DCRS was that it would not tell the Debt Counsellor exactly how much money was still needed to fall within the credit providers preferred repayment structure*

The CIF subcommittee was happy to announce that what is known as a Z file or test file will soon be made available to all Debt Counsellors with the new calculation rules built in. Debt Counsellors will now be able to tell consumers right away if they think a DCRS proposal will work and also see clearly if only a few rand stand between the consumers budget and a successful DCRS proposal. It is hoped that this will increase adoption by smaller DCs.

 

 

 

 

*please note use of DCRS by Debt Counsellors and Consumers is voluntary and in some cases, other ways of solving the debt can benefit all parties better. Debt review is about balancing the needs of the consumer and credit provider. Negotiation between both parties is also not obligatory and these matters can simply be fought about in court with no concessions from credit providers.

 

 

 

CIF: End Balance Differences

Reading Time: 2 minutes CIF Update on End Balance Differences The National Credit Regulator (NCR) organises and coordinates a cooperative industry round table discussion group called the Credit Industry Forum (CIF). Various bodies that represent consumers, credit providers as well as Debt Counsellors attend … read more

NCR Recall Reckless Lending Investigation Incentive Fee

Reading Time: 10 minutes NCR Change Their Mind About Reckless Lending Fee Guideline The National Credit Regulator (NCR) surprised the debt counselling and credit industry this month by recalling a fee which incentives Debt Counsellors to investigate Reckless Credit. Download the Circular HERE   … read more

AllProDC AGM

Reading Time: 1 minute Alliance of Professional Debt Counsellors AGM The Alliance of Professional Debt Counsellors (AllProDC) is an association for Debt Counsellors. They will be holding their Annual General Meeting this week in Cape Town (and online). The meeting will be held on … read more

NCR Silent – AllProDC Extend Date

Reading Time: 2 minutes The NCR Silent on AllProDC CIF Boycott Recently the Alliance of Professional Debt Counsellors (AllProDC) found their proposals and suggestions to the Credit Industry Forum snubbed and ignored and thus decided that the CIF is not the place for discussion … read more