what you will learn in this webinar
Justin Harrison 00:01
You can send it now; give people a chance to get on.
David Bester 00:06
Okay, let me send it out. Good morning everyone. I see we are live now. We are just sending out a few notifications. Oh. I’m getting an echo here. Okay, I had a tab open.
Justin Harrison 00:36
Morning guys. If you're just joining us, please leave your name in the comments section and let us know where you're from. We will be going live shortly; we've just turned over to the live feed a little bit early this morning. I just want to give everybody a chance to get on to the webinar. And you probably hear the WhatsApp messages come through. Dawie’s just busy sending out notifications to the WhatsApp groups. We hope that you guys have enjoyed the process of registering for our webinars. We wanted to make it as short, as easy as possible, and we wanted to make sure that the people don't have to enter names and email addresses because we know how frustrating it can be. So, that's why we decided to create these WhatsApp groups. And once people are on the WhatsApp group, we can keep in touch with them and announce the live links to the webinar. But for now, we are unfortunately limited to 250 people per WhatsApp group, so we had to create several. And as you can see, the numbers are jumping on people getting on to the webinar, so we’re just going to give everyone a little bit of a chance while the messages get out. In the meantime, grab yourself a cup of coffee and leave us a comment; let us know your name, let us know where you from and if you've got any specific questions; as we go through the webinar, Dawie will be covering these. We may start to address one or two as we go through. But ideally, we'll try to keep most of the big questions, important stuff, for after the webinar.
David Bester 02:30
Yes, as you said, I think we're going to keep most of it until after the webinar. It's pretty much a process that we're following; it's all set up precisely after we want to cover each other. So, most of the time, if we don't get to the questions during the webinar, we'll address them at the end of the webinar. If we don’t’ get to all the questions because obviously, there are many questions that pop up, and we can't get to everything Otherwise, the webinar will probably run for more than two hours. So, we do look back at the questions, and we do keep it in mind. So, we actually note them and schedule them and try to make future webinars to address the questions. Everyone’s situation is a bit different. So, let's see who’s online.
Lusizwe from Johannesburg;
Aisha – “Good morning”;
Sizwe from Midrand - quite a few people already here.
Just giving it another three minutes or so before we go live; just getting everyone to tune in and join the live webinar, then we'll start with the presentation. We'll try and keep it at 35 minutes at max, but like you guys saw two weeks ago, it tends to run a bit over that time, sometimes. Also, with the influx of questions, we're getting from people.
Justin Harrison 03:59
Jozini – that’s a dam just near the border of Mozambique. A lot of people from Cape Town;
Jonathan from George – “Good morning”:
Veronica from Johannesburg;
I saw a message here from Gregory about illegal listings by Vodacom. Gregory, perhaps you can type a little more detailed message, and we'll see if we can assist you?
Sifiso from Bloemfontein – “Good morning, guys”.
We're delighted to have you on the webinar this morning. We're going to get going in the next two minutes or so. We're just giving everyone a chance to get on here as the messages filter out. If your internet connection does die at any point, or you cannot finish the webinar with us, don't stress. A replay will be available, probably within a day or so, which Dawie will post out. Kenny from Vaal, Rustenburg. So, we’ve got people from all over the show.
People from Eastern Cape – Sia – “Good morning”;
Tulani from Pretoria – “Good morning, guys”.
Thanks very much for joining us. I think today's webinar is essential. When they get into debt, many people don't understand their options when affordability becomes an issue. This is why we're doing this webinar, and we hope that it will help you out of a sticky situation and possibly help you get bad listings removed and improve your credit score. So, without further ado, Dawie, take it away.
David Bester 06:05
Okay, perfect. So, today we'll be talking about creditors and getting default listings removed. This is probably the biggest or the most significant number of questions we are getting from people, and the most requests we are getting from people is how to deal with their creditors. And it's a challenging thing just to answer because everyone's situation is different. We are getting, just on this chat alone now, while we are alive, some people talking about FNB; others are talking about Vodacom. But we decided to keep this simple, and this webinar will cover how to deal with your creditors, and it's the stuff that we won’t generally see anywhere. So, let's get started with what we will cover today: ‘How to negotiate your debt repayments with your creditors. We will cover ‘How to drastically reduce your monthly payments. We will cover ‘How to get your default listings removed from your credit report’. And we will discuss a few ‘Credit repair tactics that experts use to force credit bureaus to remove credit listings from the report’—just something I want to get out of the way quickly here. If you guys enjoyed the webinars, please hit the subscribe button. It's just below this video. This will allow us to keep you updated about all the webinars that we'll be doing, and we're going to be doing a lot of things in the future. So, let's get started with the first one.
So, ‘Who does the credit report data belong to?’ There’s a misconception that credit report data belongs to the credit bureau, which is not true. Your credit report data, the data that lands up on your credit report, belongs to the creditor and not the credit bureau. The credit bureau is only a custodian of this data. What happens is, let's say, you open up an account at FNB - someone posted a question about FNB earlier - FNB feeds this data through to SACRRA, which then reports it out to all the credit bureaus in South Africa. This information then lands up on your credit report. So, the creditor decides what he wants to post. That's why sometimes, you'll have updated accounts that you’re paying, like insurance accounts, also being displayed on your credit report, and you'll also have your late payments displayed on your credit report. A considerable setback that we see happening to many people is that some companies don't report to the credit bureaus, and they don't have to. It's up to them if they want to report to the credit bureau, but most more prominent companies or corporate companies do. Once you understand that, you’ll realise that a credit bureau or a creditor can remove stuff from your credit report. It’s not necessarily the credit bureau that has to remove it, but you can negotiate with your creditor to remove your credit report’s listing.
Justin Harrison 09:10
Ja, I think one of the big misconceptions from what we've seen online when people have an adverse listing, or something incorrect, something that has been listed that shouldn't be removed, or the details just aren’t correct. People automatically assume that their fight is with the credit bureau. It's crucial to understand that the credit bureaus are just like a container; it just a jar that holds that data. And all the credit bureaus share the same information because there is a requirement for credit bureaus to share data. So, with the credit bureaus being the custodian of their data, they can't do anything. All they can do is, execute commands on behalf of either the creditor or the person (the consumer) who needs to adjust the listing. But at the end of the day, we see people always looking to blame the credit bureaus and what they don't understand, is it actually where they took their original debt or the original loan, the company they dealt with. That’s the entity that has to correct the listings.
David Bester 10:14
Yes, exactly. For instance, to give you a good example, I recently disputed stuff on my credit report. It was a duplicate address that was being displayed on my credit report, which I wasn't happy about because I want an accurate credit report. And when I phoned up the credit bureau, they told me, that sorry sir, this is just data that we’re reporting from the creditors. The creditors fed us this data. So, one said number-house; the other one said house-number; the other one said building-name. But it was essentially all the same thing.
Justin Harrison 10:45
And Dawie, I think the thing that the consumers need to take note of here is that when you open accounts, don't just open an account and leave it when you close accounts. Don't just close an account and leave it. You need to get a credit report; you need to check your credit report, and you need to maintain the relationship. In other words, if anything is incorrect, make sure that you fix it with the creditor; make sure it's fixed with the copy you're dealing with because ultimately, that will come back and bite you in the butt months later.
David Bester 11:14
Yes. You need to remember that the people behind these companies, behind the creditors, are also normal human beings. They’re bound to make mistakes. You might pay up your account, and one person forgets to log in, and they don't update it to the credit bureau, which then states that you still owe money, when in fact, you paid up your account. Let's move on to the second one: ‘The 20-day rule’. Very few people know this, but for a creditor to blacklist you or post a negative listing on your credit report, they have to give you 20-days in writing. Now, if they don’t give you these 20-days in writing, they are not allowed, legally, to list you or list you as a bad payer on your credit report. Let's assume you are late on a payment now. The creditor has to give you 20-days in writing before they can just go ahead and blacklist you immediately. That’s what many people don't know; it’s one of the oldest tricks in South Africa because we've got this rule. Many credit experts, the debt people, and the people who help to clear your name - what they'll immediately go do is, first they’ll look for errors in your credit report because that's the easiest thing to fix. If there's an error, the credit bureau has to fix it, right?
The second thing is that they will go look at the legal side. Now the legal side is this 20-day rule. If they found out that the creditor didn't give you this 20-days in writing notice, you can legally threaten the creditor because they are not allowed to do it and need to fix it and need to fix it at the credit bureau. If they don't do it and many people, many creditors are challenging to get hold of, especially the corporate companies, you can go to the credit ombudsman. If you search online, there are examples of people who have had their listings removed just by this simple rule and following this 20-day rule.
Justin Harrison 13:16
Dawie, I’d like to answer a couple of questions quickly because there are some excellent questions and I'm afraid that we might miss these at the end. The first one is from Nostradamus: “Consumers have to subscribe with all the credit bureaus and review their own data?” I think you can elaborate on this a bit more, but this is one reason why My Credit Status is a perfect place to go to. The data that we get comes through Experian, but it's the same data that is, pretty much, on all the other credit bureaus. Because data is aggregated between the bureaus and the bureaus have to share data, you can come to My Credit Status and get a report that will accurately reflect how listings will be updated. It there anything you want to add to that, Dawie?
David Bester 14:04
Yes. The credit bureau, by default, doesn't have to review the data. They don't have to check if the data is accurate or not; they do have to check it if you lodge a dispute, though.
Justin Harrison 14:17
Ja. Okay, and then another comment that came through, a question:“Procedure to be followed if I want to remove myself from the credit bureau?” I just want to make the point; if you have an incorrect listing and want to challenge that listing, we will tell you about that procedure shortly. In terms of having yourself removed, there is no option to have yourself removed unless you’re simply not a consumer in South Africa. If you’ve got no debt, if you've got no accounts, if you, pretty much, don't exist, you won't be listed on the credit bureaus for anything. But even people who have got excellent financial history will be listed on the credit bureau because being listed is just a credit profile of who you are. Every consumer in the country has a credit profile. So, there's no way actually to remove yourself entirely from the credit bureau.
David Bester 15:09
Yes, to add to that: some people aren’t listed. We see this happen with us quite a lot. You call this a thin file or people with a zero-credit score. But that is a complete webinar on its own; we'll cover that in the future to prevent you from actually getting a zero-credit score.
Justin Harrison 15:28
Okay, and then the last two I want to tackle quickly; this is quite a relevant question Jacqueline: “Does the 20-day rule apply to the default as well?”
David Bester 15:39
Well, a default is blacklisting (that’s basically what it’s called). If someone blacklists you, let's say you see a late payment on your credit report. That is very, very negative, which accounts to 35% of your credit score calculation. A default blacklisting, all that stuff's the same thing. It does apply; yes, the creditor does have to give you 20-days’ notice in writing, and if you don't, you can challenge it.
Justin Harrison 16:10
And then the next question: “Surely the term ‘blacklisting’ does not exist anymore and is illegal?” Dawie, you can answer that.
David Bester 16:21
Yes, well, in the past, what happened was, companies would blacklist people over. People would be late on a payment, let's say, two days or seven days, and the company could go, and they could blacklist you for absolutely no reason. And fun fact, in that time, a credit report was also called an ‘ITC report’. An ITC report is basically a credit report; that is all it is. It's just now, you've got different credit bureaus in South Africa, and we've got free competition as well. So, yes, people can't simply blacklist you; that’s why we've got something like the 20-day rule now.
Justin Harrison 16:56
And, I think just to be clear, whether it's called an adverse listing or a blacklisting, it's the same thing. Let’s move on.
David Bester 17:06
Okay, so “How to reduce your payments”. I’m sure a lot of people want to know this. So, let's get to it. Creditor should receive a portion of something than receive nothing. Now, don't get me wrong, you can't go and make debt everywhere and expect to get a massive discount on your debt. But, let's say, we've got this situation that we are in at the moment. You had a job, you had a good-paying job, and suddenly, COVID hit us, and your salary is now 20% of what it used to be. Now, you've got fair ground to actually go and negotiate with your creditor because, from a financial standpoint, you can't repay it, right? If you don't have the money, you don't have the money. So, they should receive a bit of money for a creditor than receiving nothing at all. And once you understand that, it gives you a lot of negotiating room with your creditor. Let's say you default on your repayments completely; then the creator gets nothing. You'll be amazed to see how many creditors will meet you halfway and negotiate with you to give you a lower settlement, just for them to get some money out of the deal.
Justin Harrison 18:23
Ja, Dawie, my mom always told me, she said to me, “if you don't ask, you don't get”. And I think that's like an excellent lesson here. People believe that the terms of loans and things are fixed once they sign up, but the truth of it is, creditors want to protect themselves. Creditors want anybody who's showing a commitment to repay their loan. So, if you're struggling, the worst thing you can do is just not paid at all. The best thing you can do is negotiate to pay a portion; renegotiate the terms of the loan, or whatever. But the point is, keep paying because it shows discipline and dedication on your part, and that's precisely what creditors want to see.
David Bester 19:05
Yes, exactly. When you go to the creditor, as Justin said just now, tell them you're committed; show them that you're committed to paying your debt. If you show them that you're committed, they will negotiate with you. If you are being hard and are being difficult, you can't expect much to happen then. Show them your budget and what you can afford to pay. Very few people do this, but it gives you a lot of negotiating room. If you're transparent with your creditor and you take them a budget and tell them to listen here, “Here are all my expenses. As you can see, there's no splurging happening on my account; I'm definitely in a financially difficult situation at the moment, and I need you to help me out here. I need to reduce my settlements; this is the only amount I can pay. If you don't accept this, then I won't be able to make any payments. Rather, let's get to a certain amount, and then I will be happy to pay my accounts with you”.
Justin Harrison 20:07
Ja, Dawie, what I found in many instances, people that I've helped over the years, is just exactly what you're saying - going and being transparent with the creditors. If you are genuinely transparent and you say, “Listen, I’m earning X amount; my basic living costs of this amount; this is what I’ve got left to service my debt. Obviously, when I started earning more, I’ll service more of the debt, but I want to show you, I'm committed to servicing the debt”. And what you'll often find is that those creditors will come and write off large portions of interest on the loan because they’re not writing off capital. And if you can do that and have that discussion with your creditors, you’ll get better rates.
David Bester 20:47
Yes, exactly. Let's assume you are in the position now, where you are six months behind on payments at the moment. With many creditors, you've got a lot of fees that are escalated, there's a lot of fees on your accounts, and now, you owe a lot more than what you initially owed them. And, as Justin said now, what you can do is, you can go to them, tell them, “Listen here, let’s agree on an amount, and also, let's agree to have the interest removed.” Because many of them will remove it if they see that you're willing to repay anything, this ties in with what we’ve been saying now. With the budget being transparent, you need to have an end goal in mind. You need to look at your finances to see, okay, I can realistically pay this amount, and this is the negotiation that I need to follow to get to this end goal. Let's assume you can only pay R1,000; that's all you have left in your budget, then your negotiations need to work towards that amount. You need to work with your creditor and tell them, listen here, this is the amount, and basically, just stick to it and keep that end goal in mind. If you don't have an end goal in mind, it will be very difficult to negotiate a rate that will be fair to the creditor and yourself.
Let's get to the “Negotiation tips”. When you phone up a creditor, you're most probably going to be speaking to the consultant or the call centre agent. That's not the person you want to speak to because they don't have any power; they can't do anything; they can't reduce your payments or make any deals with you. So, what you need to do is you need to speak to the head of finance, or you need to get a manager or someone at the top to speak to who can make decisions. Find out if it's the person that can make the decisions; otherwise, you're just wasting your time. [inaudible]
Justin Harrison 22:40
Sorry Dawie, just one thing – an excellent comment came through here. Richard Mackenzie said, “When you get a call from a creditor, and you try to negotiate terms, they are adamant that you have to pay the agreed amount?” and this ties into precisely what you're saying here. The problem is, it's not what you’re saying; it’s who you’re saying it to. So, the conversation that you're having with a call centre agent, please understand that they are just doing their jobs. They've got no decision-making ability; they've got a script in front of them that they're reading off. That script includes the amount you owe and what they're expecting you to pay. The only way you get decisions made is by going through to management. And if, at the very least, what you want to get to is the supervisor, who will then nine times out of 10 escalate your inquiry to management but chatting to a call centre agent, total waste of time.
David Bester 23:34
Yes, exactly, you need to speak to the head of finance. When you talk to an agent, they’re just going to tell you, “Listen here, you made the debt; you need to pay the debt.” It’s as simple as that. And that leads back to never getting angry. When you speak to these people, people tend to get angry. This is probably the worst thing you can do because if you get angry, no one will want to negotiate with you. Try and keep your cool and not get angry at the person. Just keep the end goal in mind and just remember to stick to what you need to do. Don't tell them any personal sob stories. These people are busy, and they don't want to hear your stories, they don't care about your emotions, they don’t care about your personal life; as hard as it may sound, they don't want to hear your personal stories. If you jump on the phone with them and start talking about your hard life, they just want to get you off the phone. Try to get to the point quickly, be sincere, speak to them in a lovely tone, and try to reduce your payments. Be honest and friendly with the people that ties back to never getting angry and use contingencies. This is probably a hard one for people, and very few people do this but when you negotiate with creditors, try to use contingencies as much as possible. What I mean by this is, let's assume, you get to a preferable rate or settlement amount that you can negotiate with your creditors, throw in a contingency as well. Tell them, “Listen here, I will pay my accounts this month, at the end of the month or before the end of the week, if you remove my listing completely from the credit bureau”. That is a contingency. You are negotiating someone with, a contingency too. So, like in what we see at the moment in COVID, with real estate, people are buying houses, but they're putting the offer to purchase in with contingencies to view the place in person. The offer is there, the offer is binding, and the agreement is binding, but it only becomes possible to see through if the people view the house. So, the same as with contingencies in your credit report. An example to give is to tell them, “I'll pay it off quicker if you update the payment terms on the credit report”.
Justin Harrison 25:59
Another great example, Dawie, is if somebody has been late on their payments, let’s say, for the last six months, and what would have happened, is you would have been listed as a slow payer, or a bad payer, and a history will have built up, stating that you're behind on your payments on each and every month. And one of the great ways to negotiate with contingencies in place is to say, “Look, I will pay everything up to date, provided that you update my payment history and reflect that all months were paid correctly.” And so, there's always room to negotiate; there are always ways to look at things. Don't just simply pay a bill. Dangle the carrot of paying, by getting something in addition to it.
David Bester 26:48
Yes, exactly. The creditors’ main goal is to get you to pay. Your main goal is to pay the amount or get a reduced settlement amount but also get it updated on your credit report. [inaudible]
So, that comes back to the first slide we talked about, where we spoke of the creditors having the power to remove stuff. If a creditor tells you they can’t remove listings from your credit report, they are lying, and you’re probably speaking to the wrong person as well because they can update stuff on your credit report, and they can remove it. Everyone's situation is different. You need to look at your own personal accounts and see what contingencies you can use and how you can negotiate with your creditors.
Justin Harrison 27:32
I just want to address two quick questions here. One from Jacqueline again: “How do you negotiate if the amount is fully paid?” Well, it’s very simple. If the amount is fully paid and you have proof of it being fully paid, all you have to do is dispute the listing with the credit bureau, and they will be under obligation to remove the listing. So, you're fully there.
The next question I want to deal with quickly was from Shirleen, and she asks: “If the debt is no longer listed on the ITC report, but some lawyer firm is asking you to pay, is that legal?” Well, look, just because it's not on your credit report doesn't mean that you don't owe the debt. It might simply mean that the listing hasn't arrived there. Understand that your listing in your credit profile is purely like a CV for your finances. It's basically what other companies will look at, in terms of making decisions about whether to loan you money, whether to extend any kind of debt to you, any kind of loans – home loans, car finance, etc. Just because debt hasn't been taken to the credit bureaus for listing, the bottom line is this doesn't mean that you don't have a responsibility to pay the debt. The agreement is always between you and the creditor. If you owe the money, you owe them money, klaar.
David Bester 28:56
Ja, exactly. You’ll probably need to give a bit more details to the lawyer, but a lawyer won't contact you if they don’t have grounds to contact you to pay something.
Justin Harrison 29:07
David Bester 29:10
And that is what we discussed as well. You need to work towards a complete settlement if you've got the money to pay it. Settle your amount because that gives you a lot more negotiating room, and you can get creditors to remove the listing from your credit report entirely if you are prepared to settle the listing in full within a short period. Also, you can get greater amounts of discounts, if you could do this. Otherwise, if you don't have money, like most people, at the moment, don't do; try and just get a reduced repayment, and that goes back to setting up a budget and being transparent with your creditors. Take the budget to them, tell them, “Listen here, this is all I can afford to pay and get to an amount that you can pay. Besides, that is precisely what debt review does. The debt review company takes over your entire budget. They decide what you can pay by taking your income and then working out what you can pay the creditors and they go to the creditors and tell them, “Listen here, this person can only pay this X and Y and if you're not prepared to take it, you're not going to get the money. So that's basically how debt review works, in a nutshell.
Justin Harrison 30:23
Yes, it’s basically somebody negotiating on your behalf.
David Bester 30:26
Yes, exactly. It's someone negotiating on your behalf, which is what a lot of lawyers do as well. Now, we're getting to the part that most people want to know, which is “Getting these default listings removed”. Always get a settlement letter. I can’t remember. Was it Jacqueline who asked us if the amount is fully paid? If the amount is fully paid, you need to get a creditor’s settlement letter. When you've got the settlement letter, you take it to the credit bureau and dispute the listing if there's wrong information on there. Something that we need to add as well, and this is something that very few people do, is when you negotiate with your creditors and you agree to a certain amount - let's say, a reduce your payment – ask them to write on the settlement amount or on the settlement letter, “Agreed As Paid”, because what this does is, you can then take or what they can do, is they can still list you at the credit bureau because you missed some payments, right? And that is what some of the creditors are going to do. What you need to do then is you need to go afterwards, take the settlement letter, and on there it will say, “Paid As Agreed”. You can dispute it with the credit bureau and tell them, “Listen here, this account is not actually behind on payments because on my settlement letter, it says, “Agreed As Paid” by the creditor. So, this means that the creditor and I, just came into an agreement to a new amount, and we agreed to settle the amount.” And that is a very powerful one, when you understand this because this is one of the easiest ways that you can get these listings removed, legally as well, just by writing on there, “Paid As Agreed”.
Justin Harrison 32:08
Dawie, there are lots of excellent questions coming through here. I will hold them off until we get to the last slide because we’ve only got about fifteen minutes left.
David Bester 32:17
Yes, we’re almost at the end; I think this is the second last slide. So, let us just run through it quickly and then we can address the questions at the end. So, that comes back to the contingencies that I talked about earlier. Ask the creditor to remove the listing if you settle the account in full, and if they tell you they can’t do it, they're most probably lying. Well, not most likely; they are lying for sure. Okay, I’ve already discussed this but when you get the settlement letter, and if you've got it saying “Paid As Agreed”, dispute it with the credit bureau, and try to get the listing removed that way if the creditor is hard and the creditor doesn't want to remove the listing. I'm going to add that most of the creditors probably won't want to update your record. They’ll most likely tell you that it's just a process that they follow, and they have to do it; they have to send accurate details to the credit bureaus and all that stuff. But the simplest thing to do is, take the settlement letter, dispute it with the credit bureau. If the credit bureau doesn't update it, dispute it again. Now, a bonus one: “Dealing with debt collectors”. Many people are dealing with debt collectors, so we're going to run through a few tips to help you deal with these people. Will they phone you, because obviously, many people have got these guys on their necks, and they’re pretty hard to deal with. The first thing is, a debt collector buys data from a creditor. Let's say that you missed a payment, and you defaulted on your payments competing with Foschini - I'm just giving Foschini as an example, right? I’m not saying that Foschini does this. So, Foschini will then do is, they will sell this debt to a debt collector. A debt collector will come and say, “Okay, listen, I'm prepared to pay R2 for that listing. The guy owes R10, and if I can get the guy to pay R10, then the full amount is mine, right? I already paid R2 for that for that debt”. So, anything they make above that R2 is their profit. The endpoint for the debt collector is getting the total amount from you and trying and threatening you as much to pay the total amount because that's actually how they make money. They buy the debt from the creditor, and then they try and get that money from you. If they threaten you, put down the phone immediately. It’s illegal for them to threaten you; they are not allowed to threaten you. And also, if you put down the phone, it’ll send them a clear message that they're not allowed to talk to you like that, and you will not stand it. Never acknowledge your debt on a phone call. If you acknowledge your debt, then legally, the debt collector can hand this over to a lawyer because you acknowledged your debt. Try and keep it as short as possible. Only say yes or no questions but don’t acknowledge your debt on the phone unless you're prepared to negotiate a reduced settlement with the debt collector. Never give any bank details on the phone. If you give your bank details on the phone, the debt collector can go, and they can debit your account for the full amount, and they can keep trying. So, refrain from that. I think it's not only with debt collectors but just for safety reasons; just don't give your banking details on the phone. And then, the last thing is, it's straightforward to get a reduced repayment with a debt collector. We have discussed how debt collectors work and how they buy debt, so you can understand that they’re in it to make money now that you understand that. So, any amount they’re getting from you, they are still getting money. It's much easier to get a debt collector to negotiate with you and to get your settlement reduced than going to the creditor because they’ve already bought it; they just need to make some kind of profit. They don't need to make the full amount, but even if they make 50%, they are still in the profit there.
Justin Harrison 36:12
Ja, Dawie, I’ve got an excellent example of this sort of situation. A few years back, I was dealing with an attorney firm, who was collecting money for Health & Racquet. Before Virgin Health Clubs, it was Health & Racquet, and everybody who had memberships had the option to move over to Virgin Active on new contracts or let their contract run out. And I think there was one month in dispute on my contract, but I only started getting calls about seven or eight years afterwards. Obviously, some debt collector had bought a book and begun phoning about the debt and something very interesting that I didn't know and it's something that people need to check. When they sign up on contracts and agreements, there is a clause about the ability or the right to transfer the debt. Let's say, for example, you are with Virgin Active, and Virgin Active goes bankrupt, or they decide to sell off their debtors’ book (whatever the case is), and they sell it to a third party. Unless you have consented explicitly in the contract that the debt may be transferred, you actually can probably stop that claim there, straight away. And that's precisely what happened with Health & Racquet is because there wasn’t a clause in there that allowed the debt to be transferred they had no legal leg to stand on.
David Bester 37:37
That's pretty interesting. Yeah
Justin Harrison 37:41
Okay, let's get to a couple of questions. I just want to bring these up on the screen. Dawie, I'll bring them up for you and if you can only deal with these. Let’s try and stick to around a minute or less for each question because we can get to a few more questions.
This one is from Johan Fouché: “I cancelled my Discovery life policy and short-term insurance because I got better deals from other companies… they listed me as a defaulter… how do I go about getting that removed?”
David Bester 38:15
Okay, Johan, I’m going to assume that it was paid up, and your payment was on time; all the repayments were on time. If it was, you can simply dispute it with the credit bureaus and ask them for proof. You can log the dispute and ask the credit bureau to bring you proof that you defaulted on your payments because you cancelled the product, and along with this, you need to give them your cancellation emails or cancellation proof with Discovery.
Justin Harrison 38:46
Just basically, your trail of communication, ja.
David Bester 38:47
Yes. Give them the trail of communication, show them the proof and the credit bureaus have to remove it then from your credit report, if that is the case.
Justin Harrison 38:56
And Dawie, if I may just make a point here quickly: if you are a subscriber of My Credit Status, if you are using our monthly service, we have a dispute generator that you can access. It is the easiest way in South Africa to list your disputes with a credit bureau. Pretty much, we do everything for you in our sight, in terms of a structure of how it should be sent and then, just fill out some details and then you can you can generate your dispute. So, if you are a paid subscriber, make use of that service. It is extremely, extremely useful.
I just want to bring up a couple of other questions that are related here.
This is from Shirleen: “Credit bureau told me, and my debt has been written off but lawyers want me to pay, and how legit are they because there are many scams out there?” So Dawie, I think this goes into the last few points you were making. Maybe just take that one for us.
David Bester 39:56
Ja, we’ll probably need some more details with this – “the debt has been written off”. If it's been written off, then it most likely means that it's ‘prescribed debt’. According to the law, a law that came in a few years ago - the prescribed debt gets removed from the credit bureau. So, what many debt collectors will do is tell you or make it seem like they are lawyers, and you now need to repay this debt. What I would do if I were you, Shirleen, I would ask them for their credentials to see if they are a legit company and follow up with that before I communicate with them at all.
Justin Harrison 40:38
And Dawie, what is the period of a debt becoming prescribed?
David Bester 40:44
I cannot remember [inaudible]
Justin Harrison 40:51
[inaudible] It’s between five and seven years. We’ll double-check and post a message out but once you know how long it's been, just check if the debt shouldn’t be prescribed.
David Bester 41:01
One thing about prescribed that we need to add here is that if it’s been prescribed and a lawyer phones you or anyone phones you and asks you to acknowledge that debt, then that debt isn't prescribed anymore because now you've acknowledged it. That comes back to my previous slide, don't acknowledge your debt on the phone.
Justin Harrison 41:18
David Bester 41:21
Here’s a comment from people – it’s three years. Thanks, Nostradamus, Mariandie and Johan.
Justin Harrison 41:29
Okay. Let me just pull up another question here. This one is a very good, very relevant question from Mervyn: “Creditors use different bureaus... Can I get my credit rating the same at the different bureau? Why is it different?”
David Bester 41:50
Okay, I can answer that for you. Like we said earlier, everyone reports their data through to SACRRA; SACRRA then spreads it out to the credit bureaus, right? So, that essentially means that all the credit bureaus have got the same data, but it doesn't mean that the scores are the same. What will happen is, TransUnion has got their own algorithm when it comes to working out credit score, and Experian’s got their own; Compuscan’s got their own, right? That is why the credit score is different between the credit bureaus, but the credit report’s data is the same data. I wouldn't mind too much about that; I would look at what kind of range you fall into. You get ‘poor’, then you ‘very poor, then you get ‘average’, you get ‘good’ and you get ‘excellent. Now, obviously, as you go from ‘average’ to ‘excellent’, that's your chances of getting applied for finance, and I would rather look at that, than just looking at the credit score.
Justin Harrison 42:46
Ja, 100%. And then, from Norman: “Say you have a judgment which previously used to run for five years, can a person get re-listed after five years?”.
David Bester 42:59
No, they can’t re-list you.
Justin Harrison 43:01
No. So, if your judgment has fallen away, it should be taken from your report. If it hasn't yet been removed, just log a dispute with the credit bureau. Again, if you’re a My Credit Status subscriber, you can go and use the dispute regenerator and just ask them to update it. A very valid point that we should make is that the credit bureaus have 60-days to action your request. If they don't action your request, either with a response to you or correcting the listing, by default, after 60-days, if they have not responded, they are required to correct and update those listings.
David Bester 43:39
Ja, they’ve got 20-days to respond to you and supposed to be 60-days to update. If they don’t respond to you within 20-days, and by the way, just to add to that, when I did my dispute now about two months ago, they actually came very close to the 20-days, where I decided that I'd rather phone them up and hear what’s the story. And they told me that the reason why is that it's because of COVID, and they've got a backlog and all that stuff, but they also acknowledge that they've got 20-days, and when I did bring it up with them, they immediately sorted it out. Within a day, my dispute was handled, the stuff was removed from my credit report, and the dispute was successful. That's another webinar; maybe that's the one that we'll do with you guys in two weeks is, “How to successfully do a dispute”.
Justin Harrison 44:23
Okay, we'll be taking the last few questions. If we haven't got to any of the questions that have covered your topics of interest yet, please leave a comment; we’ll be taking the last few questions in the last couple of minutes. Dawie, this one is asking: “The debt counsellor refuses to remove the red flag on my name. I have paid up all the accounts listed under debt review”. I think what's very important here is to point out the difference between the debt counsellor’s ability and the actual credit bureau.
David Bester 44:54
Yes. Like we said earlier, the data belongs to the creditor, so the creditor needs to update it. Now, it's easy when you've got the settlement letter. You said that you’ve paid up all your accounts? Now, that is fine. You can take the settlement letter to the credit bureaus; you can show, you can give them the proof, and they have to update the accounts, but you are under debt review, which means that it stays on your credit report. That is a whole different thing by itself. If you want to get yourself removed from a debt review, you certainly can do it; it’s a bit more complicated. You need to contact a lawyer to help you get removed from debt review. A lot of people don't know this but they can actually get out of debt review; they don’t have to stay in debt review.
Justin Harrison 45:39
Ja, 100%. Garth has got quite an interesting question. It's in two parts, I'll just read these out for you: “I have Norton and MBD phoning me for the same debt. Also, Vericred, DMC and Eastern Berry collectors phoning me for anther account – I’m assuming – I don’t know who to negotiate with and pay; there are different bank accounts for each debt”. So, how would you suggest dealing with that Dawie?
David Bester 46:08
Yes, that is exactly what we said earlier. The debt collector buys the debt from the credit report. Now, in your instance, there's a few debt collectors that bought this data from the creditor. Ja, well, you can decide who you want to deal with; essentially, it’s the same thing. It’s just all of them, basically want to see how quickly they can get the money from you or get some money back from you. Wherever you get the best deal, I guess; you can negotiate with whoever you want.
Justin Harrison 46:40
Okay, so this is an interesting question, Dawie, from Johan: “Is it possible to get a court order against the creditor and/or credit bureaus to remove any adverse listings too, should you have exhausted all other avenues?”
David Bester 46:57
Well, like we said earlier, let's assume that a credit bureau or creditor didn't give you 20-days in writing, right? Now, that is the law – they have to give you 20-days in writing. So, yes, you can take steps against them; you actually don't even have to take legal steps against them, you can go to the credit ombudsman. In your case, I would suggest, if you are on grounds to do it, if you were treated unfairly, then I would go to the credit ombudsman and try and settle it there first because that'll probably be the cheapest option. If you go to lawyers, it's going to be pretty expensive.
Justin Harrison 47:35
Okay, then from Norman: “Can a creditor still demand their money after it ran its course, or period of its listing?”
David Bester 47:44
Well, they're going to try, but if it's run the course, then it's seen as prescribed debt. So, no, it’s written off. You can just ignore it after that.
Justin Harrison 47:56
Okay, Faniswa asks: “I settled my account that was handed through lawyers end of April but when I check with the original creditor, they did not yet pay the settlement on them. Can I dispute it through the credit bureau?”
David Bester 48:08
Yes, it comes back to what Justin said earlier. It can take the credit bureaus about 60 days to update the listing. Let me explain it to you this way: you paid your creditor at the end of April. Let's say it was the last day of April, and it only showed in their bank accounts in May. Let's assume that they only send data through to SACRRA once a month, which is May’s end. Then they will only send that data through SACRRA at the end of May, who will then send it through to the credit bureaus. So, it takes a while to get there, but eventually, it gets there. You can wait up to 60 days because sometimes, it takes that long for a record to be updated at the credit bureau. If it's not updated then, then you can go to the credit bureau to dispute it. If you want it to happen earlier, then you can still just dispute it immediately if you've got the settlement letter. Take the settlement letter, dispute it with the credit bureau, and then it'll speed up the process, for sure.
Justin Harrison 49:09
Okay. Let’s take the last two questions here. This one is from Ray: “I have a home loan with areas - I don't know what that means (probably, arrears) but - we've been trying to sell the house now. Eventually, we have got an offer to purchase. Who can I talk to at the bank to reduce the settlement amount?”
David Bester 49:31
Ja, banks are complex. Like any corporate company, it's challenging to get through to the right person, but I would phone up the bank; even better, okay, now probably not possible, but I would go to the bank and sit with a person and deal with them. Obviously, we're on lockdown, we can’t do it, but I would phone them up and try and speak to the right person. Not the clerk, not the agent, I would ask, who is the head of home loans; I want to talk to the head of home loans.
Justin Harrison 50:00
Ja and I think, Dawie, some of the banks have started opening their branches from today. And I think they'll be going back to normal business from next week. An important point to make here is, automatically when you settle your home loan early, there's usually an early termination amount. Usually, you get penalised a little bit, it’s not too much, but the banks always have two amounts: they have current amounts outstanding and settlement amounts. And the settlement amount for today will always be less than the amount outstanding, right? Because that takes into account future interest. So, one thing that you can do, when you go to them, is say, look, you want to settle, you’d like to speak to either whoever's in charge of home loans or a home loan officer and ask them if they can give you a better rate on the settlement because you're looking to settle early. And I can tell you, I've sold dozens of properties and on a lot of them, I've got preferential, early settlement rates because the thing is, they want capital to put back into the market as well. If you ask, you will get a better rate.
Okay, let's take the last question, Dawie, from Philisiwe: “If there was no court order and you are under debt review, what do you do?”
David Bester 51:38
Well, if you’re under debt review, and there was a court order. Well, the debt review company that is handling your debt review basically does all the negotiations on your behalf, so you cannot do anything. According to law, you are now bound to a contract with a debt review company, who’s taken over all your finances. If you want to get out of debt review, then you need to contact an attorney to help you get out of debt review. But it’s possible to get out of debt review, yes.
Justin Harrison 52:07
And I think it's probably an excellent point to maybe look at ending this webinar on. One of the things that people don’t realise is the power that they have, personally. Even though you have signed for these loans, even though you've committed to this debt, you still have the power to negotiate; you still have the power to take specific interventions when times get tough. Or if you have the money and you're looking to settle early, these things are there at your disposal, and I think what people often do is they run to a third party to deal with these things for them. And, in the process, they cost themselves a lot of money. So, this webinar’s key focus is teaching you that not only do you have the ability to negotiate your debt, negotiate rates, correct your listings, but you have a lot of different tools at your disposal to do that. So, we would certainly recommend that as a starting point: You go and get yourself a membership at MyCreditStatus.co.za, and for the monthly membership, you’ll get a credit report every month, so you’ll see as your listing change. Sometimes, you may submit for a listing to get updated, and it may take as long as three to four months for a listing to be corrected. So, it’s essential that you’re getting your report all the time, that you can check up on them, and then, we’ve got a bunch of other tools at your disposal through the website, which will allow you to log disputes.
There’s a handbook on what to do about certain listings. If you haven’t got a membership yet, now would be a perfect time to go and get one.
David Bester 53:42
Ja and thank you, everyone, for joining. A few things I want to mention are that we're going to send out a replay to this webinar. I know a lot of the information is probably overwhelming. There's a lot of stuff we covered in a concise space of time. And what I'm going to do as well is, I'm going to add the links or the slides for this webinar underneath the video to download. So, it's probably going to take me a day or so to get it on the website, and then we'll send you guys the link. We'll send it in the WhatsApp groups, so just keep an eye on that. If you leave the group, you’re not going to see it, so don’t leave the group just yet. You will also notice that we changed the settings on the groups for only admin to send; otherwise, we're going to be bombarded by everyone asking all these questions. If you've got questions, please reach out to us on our Facebook page. You're welcome to go ask us any questions there, and we'll be happy to answer them or just maybe do future webinars as well where we can cover some of those questions that you guys have got.
Justin Harrison 54:40
Ja. It's a huge privilege to share more than eight years’ worth of behind-the-scenes knowledge with consumers and really get to know what their rights and obligations are and help them correct their listings and basically get a better financial future. That is the core mission of our webinars; it's the core mission of our business, really to help people understand what's going on financially, behind the scenes for them and to help them correct their listings and help them to access better finance deals, and ultimately become financially free, financially stable. So those really are our goals. Guys, if you haven't subscribed to the channel yet, please do us a huge favour; go ahead and click on the subscribe button. Not only will this ensure that when we're posting content, that you'll get notified about it, but it helps push us forward into being able to share our message. The more people subscribed to our channel; the more YouTube will get our message out. And we really want to share this information with as many South Africans as we possibly can. So please subscribe, please share the channel with us. And for me, in Durban, hamba kahle; sala kahle and we'll see you in two weeks’ time.
David Bester 55:56
Justin Harrison 55:57
[56:04 AUDIO ENDS]