Banks asked to help consumers

Johanneburg - The Debt Counsellors Association of SA (DCASA) has approached banks to get more help for embattled consumers, it said on Friday.

There were still instances of some creditors ignoring the provisions of the National Credit Act and harassing consumers paying off debt, including breaking down doors or seizing cars andhomes, president of the DCASA Tony Richards said in a statement.

"We need to reach common understanding and work in ways that encourage people to pay off their debt and be assured that they will not be harassed," Richards said.

At present more than 150 000 of 17.4 million credit-active consumers were under debt review and that figure was increasing by 10 000 a month.

By contrast there were a little more than 3 000 debt counsellors struggling to assist them, Richards said.

Court delays stretched to March 2011 with contested claims, he added.

Vice president of the DCASA Andre Snyman, said increasingly banks were starting to realise that debt counselling was bringing money back into creditors pockets, while helping consumers and reducing legal bills and animosity.

"Last month R104m flowed into creditors' bank accounts from consumers, saving the creditors significant legal and debt collection costs," Snyman said.

He said Banking Association of SA CEO Cas Coovadia, had invited closer links between debt counsellors and banks to resolve ongoing problems around extensive consumer indebtedness.

"Banks increasingly want to co-operate and find resolution; we went through an earlier period of mistrust and conflict but that is disappearing as banks realise that debt counselling works to benefit all," Snyman said.

However, he acknowledged there were still significant problem areas.

In 2010, DCASA intended doing refresher training for debt counsellors to complement similar courses being run by the National Credit Regulator.

"We also aim to improve the sharing of information especially that relating to court cases and legislative changes," Snyman said.

There were also some provinces that had experienced significant problems with debt as these provinces had been poorly canvassed by debt counsellors.

"The Eastern Cape is an example, and we intend to change that with deliberate efforts to extend our reach in those provinces," Snyman said.

- Sapa