Consumer Friend’s Stance on Excluded Accounts
When a consumer enters debt review all the accounts where legal action is not already underway can be included in the debt review court application and process. All other accounts where legal action is already underway are not included. This avoids any duplication of legal work for the various courts which may be involved.
‘This avoids any duplication of legal work for the various courts which may be involved’
This is an established norm and is set out in the National Credit Act. Some credit providers are however eager to reduce their collections costs and are happy to indirectly include a smaller debt into a debt review even if other legal enforcement had been underway. They may do this for simplicity’s sake or as an internal policy. These arrangments may be made as part of the consumers reworked budget (the possibly reduced payment amount would be set aside and allowed for in the monthly budget). It is not, however, something which credit providers commonly do.
Consumer Friend, who represents a number of different credit providers, have sent out correspondence to the industry just to remind Debt Counsellors that where legal action and enforcement on an account is already underway they do not enter into a debt review arrangement on that account. In those cases, the Debt Counsellor or consumer is welcome to talk to the credit provider or their outsourced collections agents directly but Consumer Friend is not empowered to intervene and go beyond their mandate and include such accounts into the debt review negotiations and proposals.