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Number 07 | October 2019
Updates from the Credit Industry Forum / DCRS
Circular 07 of 2019
The purpose of this circular is to provide the industry with an update regarding the implemented changes and upcoming change to be implemented on the 8
The DCRS sub-committee was established to comprehensively investigate the reasons for low usage of DCRS which is a system designed to give effect to the concession rules embodied in the Task Team Agreement (TTA). Furthermore, to identify areas of improvements to make DCRS function more efficiently and user friendly. The industry collectively deliberated, identified and agreed on seven (7) changes that would improve the current functionalities of DCRS.
In April 2019, the following changes were implemented (refer to circular 01 of 2019):
• The creation of a “Z” file for use by Debt counsellors - This file allows a debt counsellor to input the client’s information in order to establish whether the matter will solve without having to create an actual proposal on the system. Furthermore, if the case does not solve, the system will advise how much extra affordability is required to reach a solve. This will mean that clients will not be denied the concession offered by DCRS as a result of relatively negligible amounts and Debt Counsellors will have certainty with regards to what is required.
• VAF Balloon / residual balance change – This change was implemented to address the “solve” challenge experienced where the Vehicle and Asset Finance (VAF) had a balloon/residual balance. A longer term-extension has now been implemented on VAF accounts where there is a balloon/residual balance.
Upcoming change to be implemented by November 2019 – exact date to be announced later
• Calculation of interest from date of Certificate of Balance (COB) – This change is in the final stages of testing and provides the functionality that will allow DCRS to calculate interest from the date of COB until proposal start date. The purpose of this functionality is to minimize the end-balance differences and is an attempt to bring a closer match between the final and the provisional proposals unless there is a change to the inputs.
Disclaimer:
While the NCR has taken reasonable care to ensure the factual accuracy of this circular, it cannot guarantee such accuracy especially with regards to future events. Accordingly, NCR does not accept any liability for damages incurred by any party as a result of decisions or actions taken on the basis of information supplied in this Circular.
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Number 07 | October 2019
• Both the COB date and the proposal start date will remain static on the system provided that the dates in the inputs are unchanged. This will allow any subsequent proposals to remain the same, irrespective of the date on which the proposal is generated.
Debt Counsellors are encouraged to ensure that their debt restructuring system providers have these changes in place on DCRS to ensure that consumers benefit in full from the concession rules embodied in the TTA.
Any related queries may be directed to the following contact details:
• DCRS call centre on 0861 502 027 or via the helpdesk email address dcrshelpdesk@busdoc. co.za.
• Please note that the DCRS Call centre / Help desk is available 08:00 to 18:00 Monday to Friday.
FURTHER INFORMATION
Please contact Timmy Van Der Grijp on 011 554 2802, tvandergrijp@ncr.org.za should you have any queries.
FORM A PAJA Code of good Conduct - Administration
We refer to the content of the PAJA form A and request for reasons and indication within the section 33 Constitution and the Rule of Law
The DCRS so-called Rules engine and the empowering Act. Further the CIF status under the NCA where there is no reference to this body
The NCA act gives limited empowerment for the NCR may obtain industry input and create agreements inter- registrants in the industry. The findings and agreement and reference must be delivered to the Minister and the legislator through the standing committee. The effect is that the NCR and NCT are creatures of the statutute and has no discretion to exceed the powers granted in terms of the NCA Act and regulations
Further to the above the rules provide for the credit provider to decrease interest on a case by case agreement
The desrease of interest may be in conflict with public interest and it is accepted juris prudence that public interest cannot be served where certain consumer receive benefits or a beneficial status, such as lowered interest rates while the consumers who pay their debt on time and fully.
The treatment of delinquent consumers receive unjustified preferential treatment.
Further to this we refer to the so-called task team findings and agreements, including the contentious Certificate of Balance COB. The Form is not refered to in the Act.
The Form 17.1 NCA does not require the issuing of a COB and this process is referred to in the so-called Task Team 2009/2015 and other publications under the jurisdiction of the NCR and NCT
Consumer Rights to receive information under section 65 NCA
It is suggested that the correct interpretation of the Act would be correct and that the consumer is entitled to request information in terms of section 65 NCA and a detailed statement of account in section 110 must be delivered in the interest of transparency.
Further to this Affordability Assessments must be done before granting credit. When the Debt Counselor indicates that the consumer is under financial strain through Form 17.1 the matter is ONLY referred to the credit providers and the consumer may request information where they fail to keep their documents correctly.
The issuing of Form 17.1 places a burden of proof onto all the credit providers to supply documentation held in terms of section 170 NCA and listed in Regulation 55 NCA to give rebuttal to the implied fact that reckless lending may have caused the over-indebtedness of the consumer.
We refer to the 2018 NCA Amendment section 82A NCA supplies a indication that the Regulation is important in determining why the consumer may be over-indebted. The amandment has persuasive power, although it has not been proclomated.
We are of the opinion that the task team investigation, recommendations and agreements is VOID and unlawful. The perpetuation of the rules is designed to discover the root of most credit over-indebtedness.
The NCR and employees with the co-operation of credit providers and DCSA members are continuously to institutionalise BIAS IN FAVOUR OF COMMERCIAL BANKS detrimental to all consumers and the Public Interest of South Africa.
We require the names of all participants in the scheme in conflict with Rule of Law and the constitutional rights of all.
The NCR must supply and interpret the empowering law and why they persist in demanding debt counselors and other registrants under the NCA to act in conflict of the Act.
Disclaimer:
While the NCR has taken reasonable care to ensure the factual accuracy of this circular, it cannot guarantee such accuracy especially with regards to future events. Accordingly, NCR does not accept any liability for damages incurred by any party as a result of decisions or actions taken on the basis of information supplied in this Circular.
We request explanation for the above contradiction in terms
Further to this
• VAF Balloon / residual balance change – This change was implemented to address the “solve” challenge experienced where the Vehicle and Asset Finance (VAF) had a balloon/residual balance. A longer term-extension has now been implemented on VAF accounts where there is a balloon/residual balance.
The offering of a residual balance ( Balloon ) agreement in conflict of the requirements that tge credit provider may be promoting reckless lending practices. The act requires that the Affordability Assessment must give consideration to future financial prospects
The practice of residual finance financing to consumer in general is a unlawful, prohibited under the NCA as the consumer cannot guarantee payment of a 30percent balloon. There may be no evidences of his understanding of the risk of this type of credit offered and will be struck down as being reckless
The NCR and employees are therefor under indictment of flaunting the rules of good practice administration by failing to act against the patently prohibited and harmful practices developed by tge credit providers
We require that the NCR executive responds to these matters in detail under PAJA Code and Form A, by identifying individuals or accepting full liability for damages caused to the patrimony and estates of affected consumers since 2005 when the Act commenced
The explanation will be used to refer the individual matters to the High Court with jurisdiction by George Smith Attornet as a officer of the High Court and mandated by consumers to process in the Public Interest.
Disclaimer:
While the NCR has taken reasonable care to ensure the factual accuracy of this circular, it cannot guarantee such accuracy especially with regards to future events. Accordingly, NCR does not accept any liability for damages incurred by any party as a result of decisions or actions taken on the basis of information supplied in this Circular.
Please explain the contradiction in terms contained in the disclaimer generally used by the NCR
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