Over the last few years, pre and post covid19, I’ve received a lot of feedback from consumers who were in financial turmoil, but avoided Debt Counsellors like the plague…
These consumers who were in dire financial duress chose rather to fight their own battles, sadly to their detriment, yet were adamant on refusing to get help from a professional ‘Debt Counsellor’…
Can I blame them, no…
But did they make the right decision in dealing with their debt personally?
The answer to that question is a resounding ‘NO!!’…
Instead of doing further research on finding reputable, trusted, and transparent debt counsellors, they took matters into their own hands and many of them are now worse off than before.
Some of them reached out to us, but as a result of the status of their accounts and the fact that many of them were already in the legal phase (handed over), we could only negotiate on an informal basis, as the National Credit Act gives us the authority to legally restructure our client’s credit agreements, but does not allow us to restructure credit agreements where the legal process has already started.
Here are my top 5 reasons why some consumers have little to no confidence in today’s debt counsellors.
- They are simply not transparent
Some DC’s don’t disclose critical yet basic information, like informing the client how they will be impacted by this process, like the fact that once you apply for formal debt review, you will not be able to use your current credit facilities, such as a credit card or store account, or apply for new credit.
A common way some DC’s are trying to lure new clients in is by quoting them figures up front, so that the consumer who is under dire financial duress, can make a quick decision. This, however, can cause major problems down the line, as it’s virtually impossible to quote realistic or accurate figures at this early stage, as the negotiation process has not been concluded or even started yet.
This strategy sadly ends in the client getting an email a month or two later, being informed that their initial instalment must now be increased due to creditors rejecting proposals.
- The are incompetent
The call centre model is flawed in the sense that both parties (the call centre agent, which is the DC representative, as well as the client) are often in a rush. The call centre agent is chasing his/her daily target and the client (a consumer who is under huge financial duress) is simply looking for a quick fix.
As a result of this rushed phone call, the consumer does not have all his/her questions answered and is often coerced into applying for formal debt review, whether they need it or not.
They are also left without the proper information, whereby they don’t know how the process will impact them, let alone the finer details of their terms etc.
- They only care about money
We find that some DC’s are mainly concerned about having the client make his/her first payment. This payment ensures the DC receives the full initial fee.
Many of our clients are transfers from other DC’s and what they all have in common is this…
They received great customer service up until after their first payment. After that, it was almost impossible to get hold of someone to attend to their queries.
- They care little about getting you back on your feet financially
The aim should be to get a client out of debt review as soon as possible. Many DC’s do not disclose that your debt review term does not have to be 5 years, but it can be shorter. They don’t encourage clients to make additional payments, or increase their payments to pay the debt off faster.
At Johan Wepener Debt Counsellors, we have regular reviews of the progress with debt repayment. When an account is settled, we encourage the client to allocate that payment to another account.
- They don’t practise responsible debt counselling
Responsible Debt Counselling is having a consultation with a struggling consumer, over the phone or in person, and establishing where the consumer was, where they are now, how they got to that point. We work out a repayment plan that the consumer can afford, and that will be acceptable to creditors. We then negotiate with creditors to have a plan accepted, sometimes also ask the client to consider counter proposals by creditors.
At Johan Wepener Debt Counsellors, WE DO NOT SELL DEBT REVIEW…
We educate and inform and put the consumer in a position to make their own decisions, based on what will be best for them and their family.
We have a vested interest in getting our clients through the debt review process as quickly and as effectively as possible.
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