What Moses Manthata thought was a good plan to get himself out of a sticky debt situation has turned out to be a financial nightmare for him.
For four years, the 61-year-old adult education teacher from Polokwane, Limpopo, has been fighting with his debit counsellor to remove him from the debt review he placed him under in 2016.
A person under debt review cannot take out new credit until the debt has been settled.
Manthata approached Matamo Debt Counsellors in Polokwane in 2016 seeking help in paying his two loans with Capfin and Absa which were R30,000 combined, with monthly payments of R1,500 - R1,200 to Absa and R300 to Capfin.
“Our agreement was that Matamo would consult with my creditors and have my debt reduced. I started getting a debit order of R900, which was fine to me. It's only after I started getting calls from my creditors that I became suspicious.
"I later discovered that from the R900 that was being debited, Matamo was pocketing R400 and giving my creditors the remaining R500 to share (R350 to Absa and R150 to Capfin). Six months later, Absa called me and said what I was paying them was too little, and they even threatened to repossess my things,” said Manthata.
He then approached Matamo owner Masilo Letswalo asking to be removed from debt review but Letswalo refused.
Manthata said Letswalo told him that he would not remove him until he showed proof that he had paid all his debts.
“I was left with no choice but to make new payment arrangements with my creditors without Letswalo’s involvement. Since 2017, he has been debiting the R900 but I’d reverse it every time. My problem is that I’m paying my creditors directly but I’m stuck in debt review,” said Manthata.
Letswalo claims to have received only about eight payments from his client.
A document that he furnished to Sowetan Consumer shows that six debit orders of R900 went out of Moses Manthata’s bank account between September 2016 and January 2018.
From the R900, Lestwalo received R735 once in September 2016 and then R45 from the other five transactions. Absa was paid R356, while Capfin received R478 for five months during this period.
Letswalo said Manthata had since stopped paying his creditors through debt counselling.
He said Manthata needed to pay off his debt before he could be removed from debt review.
“He is still registered under me. I need him to be rehabilitated so that he can get back to the mainstream economy. It is only after he has paid all his debt that I can issue him with a clearance certificate which goes to the credit bureau to clear his name. He must pay and then I will release him,” said Letswalo.
According to the chief operating officer of DebtBusters, Benay Sager, debt counsellors do not handle the money but use a Payment Distribution Agency to debit from the client’s bank account and pay the creditors.
“The standard practice is that the creditors don’t expect payment from the first two months. The counsellor takes 100% from the first debit order and the second debit goes to a lawyer who negotiated the consolidation. From the third month, the counsellor would only take 5% commission, while the rest goes to the creditors,” said Sager.
Manthata said he was comfortable with the current arrangements he has with his creditors but being under debt review has stalled his life.
“I’m a casual worker who has a salary but I can’t move forward with my life because I can’t take credit,” said Manthata.
The National Credit Regulator (NCR) education and communications officer Winnie Rabathata said it would investigate the matter.
"The NCR will evaluate the allegations made and may issue a notice of non-referral to the complainant should the complaint be found to be frivolous, untrue or vexatious; and/or direct an inspector to investigate the complaint as quickly as practicable.
"Where contraventions of the National Credit Act are found the NCR may: issue a compliance notice; refer the matter to the National Prosecuting Authority if criminality is established; and/or refer the matter to the National Consumer Tribunal asking for, inter alia, imposition of an administrative fine, suspending/cancelling the registrant’s registration, repayment to the consumer of any excess amounts charged, etc," Rabathata said.
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