Debtfree Magazine Sept 2017

Some people just need budgeting help and this fee could cover that but the reality
is that you are now asking the consumer to pay you for telling them you will not
help them. You realistically will never receive this payment and it simply creates
a collections (and bookkeeping) nightmare. It might be better to introduce a
consultation fee that would fit with the idea of helping consumers with budgeting
but not require that the NCR’s data base be updated if the consumer does not need
or qualify for debt review.
The Average Debt Review Consumer
Though identifying the average debt review consumer is difficult and may
vary from company to company (since they market to different people) the
average consumer in debt review is said to end up paying around R2500
(once their debt is eventually restructured). It is said they have 7 to 10 credit
accounts when entering the process.
Unintentionally Extending the Payment Timeline
All the proposed fees up to this point seem to be charged up front or right away.
So, in theory, this is Month One of the process. Now, due to the proposed changes,
if the application is made near the end of the month, the next set of fees then
seems to only be charged at the end of Month Two. This is a huge change from
previously when all the restructuring fees were traditionally charged in Month One
and then legal fees in Month Two and then Creditor Payments often began from
Month Three. The new fee structure seems (in the case of the “average” consumer)
to create the Credit Provider dreaded “payment holiday” after paying only R300 in
application fees in month one when applying.
Proposed Debt Counselling Fee Structure
Determination Fee:
(3.2 Restructuring Fee) for the Form 17.2(a) process including but not limited to, the
following related services: