WATCH | How I was placed on debt review against my will

As financial pressure continues to mount on consumers, more people are falling prey to dodgy debt counsellors who promise to lessen their monthly debt repayments only to trap them in the debt review process.

Johanna Mabuela, 55, from Carolina in Mpumalanga, claims to have been put under debt review without her consent and has been struggling since March to have her name removed from the stringent review process.

Debt review involves a debt counsellor negotiating with creditors on behalf of overly indebted consumers to reduce their monthly repayments. The process can last up to five years, and during that period, the consumers cannot access any credit, and their IDs are listed by retailers and banks.

In July, more than 10-million consumers were reported to be over-indebted, with more than 700,000 under debt review. The National Credit Regulator (NCR) last year rescued and removed more than 38,000 consumers who were placed under debt review without their knowledge.

“I can’t buy anything on credit because of this.” — Johanna Mabuela

Mabuela said she received a call from RSA Debt Solutions in March. The caller said they had noticed that Mabuela was paying too much interest on three accounts and that they could help her reduce the interest and the debt.

She said she was assured that she would not be placed under debt review.

“I specifically told them I did not want to be under debt review because I know how it works,” she said.

Mabuela later discovered that her accounts had been flagged and that she could no longer access credit facilities.

She said that despite disputing the debt review process and obtaining a rejection letter, her accounts remain flagged, preventing her from opening new ones or using her existing credit facilities.

“I wanted to buy using my Truworths, Jet and Vodacom accounts, and they were flagged. Everything is flagged. I can’t buy anything on credit because of this,” she said.

Mabuela, who owes more than R150,000 on the three accounts, said debt reviewer Tay-yibah Booley has taken more than R3,000 from her bank account as commission.

Booley told Sowetan on Thursday that she had removed Mabuela’s name on March 27 after she lodged a dispute with her company. Booley could not explain why Mabuela’s ID was still flagged.

Timmy van der Grijp, NCR’s legal adviser, said they have noticed a rise in cases of debt review without the reviewee’s consent.

He said the driver behind the increase in such cases is the financial pressure many consumers are facing.

“As people become more economically and financially pressured, they are looking for a way out and a way to pay less on their debt,” Van der Grijp said.

“These scammers, and many of them are scammers, are feeding on that by telling consumers that they can reduce or write off debt and make all sorts of promises.

“So, it is definitely on the rise. We are curbing it from our side. Late last year we identified 38,000 consumers who had been [unlawfully] placed under debt review and removed them.”

Van der Grijp said this is often a lengthy process because of the number of parties involved.

He said the NCR has been dealing with consumers who were in the early stages of debt review in the hope of having them removed as soon as the consumers realised the severe implications of the process.

“But we have to deal with over 8,000 credit providers to make sure they are in agreement with us that these consumers can be removed. So it is a process, but we are dealing with it as much as we can,” he said.

Sowetan