In this week’s blog, Debt Centre the home of Consumer Debt Support and Debt Eezy want to cover the topic mediation. As important as the details to mediation, we feel that you need to remember not to deal with a company who cannot show you that they are registered with the NCR. There is a big difference between a licensed debt practitioner and a company offering these services with no back up from the creditors. The problem with the unregistered individuals or companies is that they make money off unaware desperate consumers that they could not help in the first place.
We hope this blog will shed the light on the legal implications for consumers that ignore the warnings of dealing with unregistered persons, that cause more harm than good to consumers that are good people but their desperation was exploited for their money, and payment collected for services that were illegal and misleading to collect in the first place.
What is debt mediation over debt review?
We offer the financial solution to consumers that do not want to enter debt review negotiations but rather to mediate their situation with creditors.
Credit agreements can be entered into negotiations on your behalf, to reduce the payments for a shorter period of time that will aid you, the consumer during your financial challenges.
A mediation agent of ADR agent can’t negotiate on the arrears on vehicle or home loan finance. Only a registered Debt Counsellor can negotiate on arrears of a vehicle and home loan credit agreements. The ADR agent can’t offer the creditors a payment solution and ensure that the accounts do not go further into arrears. Assets can only be secured in the debt review program, Mediation will cause the client more problems that will lead to loss of the property by means of a court order.
Only a maximum of Five (5) accounts can be entered into mediation where the payments can be reduced to al lower instalment and negotiated with creditors. Anyone offering mediation on eight (8) or ten (10) accounts do not have a license agreement or agent agreement from the license holder to mediate the lower payments.
There is a R500.00 legal retainer on every application, as well the fee the agent or license holder can charge for the services rendered is capped. Maximum fee that can be charged is R4500.00. The payments to the creditors listed in the program will be distributed by a PDA that deals with mediation matters only. The legal retainers is then kept in the Trust account to cover the cost of all mediation matters where legal fees need to be paid for matters where legal representation appointed. The legal services, referral to the NCT (National Consumer Tribunal) , reckless lending allegations that needs to be referred to the NCT is administrated by the license holder of the mediation certificate, and not by the agent appointed. All matters are logged on the system of the license holder to ensure proper record to evaluate and regulate every application.
What do we mean by long term and short-term financial solutions?
When a consumer is over-indebted with vehicle finance, and home loan credit agreements, these arrears cannot be managed in mediation, it would then be best the consumer enrol into the debt review program as the consumer could be over-indebted. This consumer would need the protection from the court by means of a debt restructuring court order. Mediation would cause a bigger financial dilemma for the consumer with creditors proceeding with inevitable legal action in the High Court to obtain a default judgement and proceed with the Writt of Execution to reposes the assets and sell it at auction.
Unsecured Credit agreements where the consumer can afford the arrears in a mediation program over a period not exceeding eight months, this assessment must be reviewed whether the relief is needed for a longer period ON UNSECURED CREDIT AGREEMENTS that is reasonable restructuring suggested by the ADR agent. The consumer can only include a MAXIMUM of FIVE accounts in the program, if there is more accounts the consumer would most likely be over-indebted, should there be more than Five accounts the consumer should opt for debt review instead. Mediation in a short-term payment restructuring not exceeding 2 years. Don’t forget this is a voluntary agreement and all parties must agree to the process and solution presented.
Mediation quick and Eezy
Mediation is such a fantastic product available to consumers that the banks agree to conference calls between ADR agent and the consumer, to take part in the process of negotiations. The banks are aware of the fraud taking place in the industry and unregistered business mediation persons. Consumers are being protected by the banks that is ensuring they deal with registered persons only, or those agents with the proper paperwork in place to practice.
We at Debt Centre have the technology implemented to ensure the quality control of it, with all calls recorded between clients and banks, for future records. Now our clients can seek help from their work place, if possible, or from home and talk to one of our dedicated agents or debt counselors that can assist with mediation applications.
While being assessed one can determine whether mediation is the way forward, and whether other options need to be opted for instead, to prevent any legal action from the creditors.
Important fact to know – Once legal action has occurred, no mediation or debt review will resolve the problem as the legal process has commenced in court and most likely the consumer had received the summons regarding the collection of the debt or goods.
Mediation can assist with credit bureaus disputes.
For instance, a consumer has a listing on their credit record of an account paid up or an account that was not their account, we can help with those disputes. It is always best to consult with us and see how we can assist. Unlawful listing like fraud should not be ignored but dealt with as quickly and effective as possible.
There is a very good reason why ADR agents must be registered. Protecting the rights of the consumers is the most important role of the Mediation process that allows the consumers access to justice and fairness when matters are being disputed.
Debt Centre is nominated as an acting agent to deal with Mediation applications
What is the legal role of a Mediation agent? Here you can see why a R500 legal fee is retained in the program for every application.
To assist in the dispute and preserve the relationship between the creditor and the consumer, which may become strained by the adversarial nature of the litigation agreement outside the court, in the process of resolving the matters before the NCT (National Consumer Tribunal). To exercise the consumer protection act, to ensure and facilitate with expeditious and cost-effective resolution of all disputes between parties.
The duty of the mediator is to assist litigants or potential litigants, to determine at an early stage where proceedings with a trial, or an opted application are in their best interest of the consumer or not.
Report reckless lending to the NCT as per law to investigate, and update on the outcome for the relief of the consumers financial situation. To deal with the creditor involved on the reckless granting of the debt through the mediation process, to allow the effective resolution to dispute and litigate, all for the protection of the consumer’s rights.
Default of credit agreements and Section 129 Notices
When a consumer fails to update their physical address with the creditor after moving, their account will be in default and cannot be included in the mediation application. There are many consumers we find are struggling by not update their Domiciling addresses that cannot be helped due to that.
A Creditor default notice will be sent via registered post to the consumer. The section 129 notice and mediation are an opportunity for consumers to opt for the mediation before debt review. Should a debt review option be the correct process, then the mediation agent will explain the process to the consumer. Contact us at the Debt Centre, 021 204 4711, to find out more.
Be aware of misleading mediation advertising
There are unfortunately misleading advertising and individuals, waiting for the next victim to scam from their hard-earned money, with empty promises to restrict their debt and negotiate with their creditors. Why would a consumer give these matters to any unregistered persons? Out of desperation and the lack of knowledge most people will take that chance without checking.
Home loan, furniture accounts and vehicle arrears can’t be included into the program called mediation, but debt review it can yes.
It is then when due to no compliance from the consumer, or the so-called mediation agent, that many consumers have lost almost all their possessions due to legal action and warrants of execution of their property, because of default judgment of credit agreements, cancelled after default.
#Important Tip of the day
Deal with registered practitioners only, do not become another statistic of a scam just because you in desperate need of help. Take the time to find the correct company to assist with the restructuring of your debt. Remember not all debt is eligible for mediation; some debt can be addressed in mediation and negotiation. Consumers do not read enough and take the time to ensure they deal with persons with the proper documents that must be valid for the next 12 months, expiring 31 July 2020 the current certificate visible to consumers.
Credit providers registration will be renewed for 2021 – 31 July 2020 and expire 31 July 2021 so repeated every year.
Debt Counselors registration will be renewed for 2021 – 31 July 2020 and expire 31 July 2021 so repeated every year.
ADR – Alternative Dispute resolution Agent registration will be renewed for 2021 – 31 July 2020 and expire July 2021 so repeated every year.
It is your money and your debt, find out what will be the best deal for you. Mediation or debt review? Do you qualify for a short-term mediation process, or will a long term serve you better, with all the legal protection involved? Therefore, ensure you deal with registered practitioners only when it comes to restructuring or seeking help.
Message from the author, Ms Annienne Nel
I understand the frustration when people lose their hard-earned money to scammers. That’s the whole drive to assist those in need of legal help, but do not know where to turn to. If you work with us, you will feel that you are in safe hands, with a whole army behind you, that’s who you can bank your debt problems on.
We believe in second changes and that’s what we like to offer you. Get debt free with us. Until next time, God bless.