Debtfree Magazine Sept 2017

The ‘Average‘ Debt Counsellor
The majority of Debt Counsellors in South Africa (and there are not many)
are small operations and help around 100 clients. Then there are around
10 very large firms who each service over 4000 clients at the same time. It
is estimated that of those large firms the top 4 each service around 10 000
clients or more at the same time. Obviously then the largest firms help the
most people at the same time and thus their needs need to be considered.
At the same time, the majority of counsellors have found that they can only
help around 100 clients at the same time and often do a second job or have
a second revenue stream to supplement their income due to the fact that
the process is not very profitable as a small business. This is, in many ways, a
reaction to the current fee structure. Over time around 1800 qualified Debt
Counsellors have either not bothered to practice, have stopped taking on
new clients or have left the industry. This then leaves around 700 practicing
Debt Counsellors for consumers to choose from.
What if Applicants Don’t Qualify or Need Debt Review?
Sometimes with some budgeting advice and a good debt counselling consultation,
a consumer can get advice and not need to enter the formal debt review process.
In such a case the Debt Counsellor could, in the past, charge a “Rejection” fee.
Actually, this was probably the best possible outcome possible. Realistically such
circumstances seldom happened. Some Debt Counsellors later came to view this
fee as a charge you take from consumers when they decide to leave debt review
(which not actually according to the wording in the previous fee guideline).
Proposed Debt Counselling Fee Structure
Determination Fee:
(3.1 Rejection Fee) for the Form 17.2 (b) process, including: (a) notifying the consumer
and credit providers; and (b) updating DHS (the NCR’s online data base) – R200 – to
be paid upon rejection.