A Fin24 reader, curious about the legitimacy of internet ads advertising debt reduction, asks an expert to shed light on the subject.
Is there any truth in the numerous internet adverts suggesting that South African women can have their credit card debt substantially reduced? Many of the ads also explicitly mention senior-aged women who have debt in excess of R50 000.
Kabelo Teme, Communications Liaison at the Office of the Credit Ombud, responds:
Consumers should be cautious when it comes to such ads. If something seems too good to be true, then it may actually be.
When a consumer enters into a credit agreement, they agree to paying the full amount, and should they find themselves being overburdened by debt, the National Credit Act (NCA) provides options such as debt counselling that consumers may make use of. And before a consumer decides to go under debt counselling, it’s safe to approach the National Credit Regulator (NCR) to get a registered debt counsellor who will assist you to pay off your debt.
The NCA regarding debt intervention was published on 19 August 2019. The Act makes provision for regulations before the debt intervention may be implemented and for the readiness of the NCR. The effective date is yet to be determined by the president.
When in place, debt intervention will be available to consumers earning less than R7 500 a month and with unsecured debts of less than R50 000.
Lower-income individuals who are deemed to be indebted will have their debts restructured. At this stage, any entity purporting to offer debt write-offs to women or men must be approached cautiously, as these may be social media or online scams. Debt intervention is not in effect.
Questions may be edited for brevity and clarity.
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