Debt counsellor stole from clients

2011-05-25 20:24

Johannesburg - The National Consumer Tribunal (NCT) on Wednesday ruled in favour of the National Credit Regulator (NCR) against debt counsellor, Zimkitha Hazel Zilo, who misappropriated about R170 000 of consumer funds.

Zilo was a registered debt counsellor who created a fictitious credit provider linked to a bank account under her brother's name, the NCR said.

She then added this fictitious credit provider as a credit provider to which the Payment Distribution Agent (PDA) had to distribute funds. As a direct result of her actions, the PDA paid an amount close to R170 000 into this account. In terms of her registration conditions, Zilo had to make use of an approved PDA to distribute funds to creditors.

"The NCR was informed of the irregularity by the PDA and conducted a thorough and speedy investigation into the matter," said NCR's investigations and enforcement manager, advocate Jan Augustyn.

The NCR then launched an application for the cancellation of Zilo's registration as a debt counsellor. Zilo's registration as a debt counsellor was cancelled with immediate effect.

The debt counsellor was ordered to refund all consumer funds misappropriated with interest to all affected consumers. The tribunal ruled that by creating a fictitious account and defrauding consumers of funds intended for distribution to their credit providers, Zilo had contravened the National Credit Act and her conditions of registration.

"The NCR regards this as a very serious abuse because consumers under debt review can lose their homes and most valuable assets if payments are not made as per the agreement with their credit providers," Augustyn said.

Other registrations cancelled

The Tribunal also ordered Zilo to repay the money plus 15.5% interest per annum to the PDA within 20 days and to send proof to the NCR within 45 days of the order being granted.

Failing this, she may be liable to face a fine or imprisonment for a period not exceeding 10 years or she may be liable to both a fine and imprisonment.

Augustyn said the ruling demonstrated that the NCR would protect consumers under the debt review process from unscrupulous debt counsellors.

He said the NCR had also referred the matter to the police for further criminal investigation.

The ruling comes after several other debt counsellors' registrations were cancelled, and these included those of Zolile Senior Njokweni, Petrus Martinus Ferreira's trading as Ferreira Debt Counsellors (FDC), Sash Sahibdeen, Barry Kotze and Christopher Bornman, who has since appealed the action in court.

The cancellations were a result of the debt counsellors found to have repeatedly contravened the National Credit Act (NCA) and their conditions of registration.

  • Rastus - 2011-05-25 20:55

    Eish - So many loopholes & relatives! JZ did you start this?

  • Dave - 2011-05-25 20:59

    Ironic that the News24 story under this article was...Do you need a Debt Counsellor?

  • Charles N - 2011-05-25 21:29

    How many others have done this?

  • JoeMag - 2011-05-26 12:19

    In the article it says that the NCR was informed by the PDA and that a speedy and thorough investigation followed. For the record, the matter was brought under the attention of the NCR by myself, as director of a consumer protection organisation, You and Your Money. I reported the matter in August 2010. To be fair, the NCR did send an investigator but little information was then given to us as to the state of the investigation. This article is the first real development that we have witnessed since reporting the matter to the NCR. There remain several questions that need to be answered as a matter of urgency. The two most important ones being: a) What happens to those consumers who, through no fault of their own, have fallen victim to this scam? We know for a fact, that they, already burdened under debt review, remain liable to their creditors, even though they deposited their monies in good faith to the debt counsellor. As a result of this scam, many consumers have been terminated from the debt review process and still face the danger of losing their cars, houses and other possessions. b) The role of the PDA in this matter should also be investigated: How does a PDA vet its credit providers' account details. We know that clients' regular contributions were channeled into, a.o. a Capitec bank account. Also, they did not vet the credit providers' registration details with the NCR. A simple check could've prevented a whole lot of misery.

      abz.malgas - 2012-10-05 12:25

      joemag, don't try and be a glory seeker.Your proof was probable not as sufficient as the pda's to say the least. And if you felt the consumers were being done and in fact brought the matter to the pda's attention as you so claim ,why did you not follow up on it. And I disagree with you saying the pda has to be held liable because I DC listed a fake CP. They eventually picked up on what was going on and reported it.You are sayin the pda should be held liable but then it could be said you could be held liable to since you knew what was going on,you not even saying how you knew. Unless you were working for that dc yourself

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