Help/advice needed with a debt collection agency

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bluepoole

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Hi all

I noticed there are quite a few threads asking for help with debt collection agencies, I've read through many of them but felt I needed to ask a few questions with regards to my own situation, so please bear with me...any advice would be most welcome and appreciated!

I applied for a loan in October 2011 with a company called Loan Discovery SA. The application was rejected, but in applying I unknowingly bound myself to a service which they charged me R399 for. In the end, I should have read the terms and conditions more thoroughly, but they have caught a lot of people that way (many similar stories on HelloPeter)

Anyway, I couldn't pay the money and they handed me over to a debt collection agency - Credit Intel - a few months later (around February 2012). Obviously now their collection fees got added, and by September 2012 the amount was standing on R900! As you know they charge fees for every email, sms, phone call, etc between you and them.

A colleague assisted me and we paid R800 to them in October 2012. I explained to them that I cannot afford the last R100 but would attempt to make a plan. I have not been able to afford it yet (yes I know it is a small amount, but I am on an extremely tight budget, we all have our difficult phases in life) and I am still very unhappy because I did not willingly purchase the mentioned service from the loan company. I still feel cheated.

Now in January 2013, it once again crept up to R183. They are now threatening me with legal proceedings.

I wrote them a very sincere letter last week, explaining that I am on a tight budget, and that I personally feel they have already made R400 out of me (since the other R400 was obviously paid to their client, the loan company) and if they would consider waiving the balance or offering me a substantial discount. They don't want to help me though.

Now I am once again so angry at the whole situation, that I actually don't want to pay these okes...they are sharks! They earned an amount equal to the original debt, but they still want more. I know they can't blacklist me because they are not a credit provider. And it is a fact that debt collection agencies are good at scaring people and taking chances.

Couple of questions:
1. Can they actually hand me over attorneys over this? Since their client, the original debt, has actually been settled?
2. If so, would I have a case in my favour or not?
3. Can I send them to "where the sun don't shine", or am I better off paying the R183 and get it over and done with?

If the matter can indeed become legal and I end up having to pay hundreds if not thousands of bucks, I would rather just conclude the matter. But if I can get away at all by not paying anything more, I want to do that - since I really feel like a victim here!

Any advice?
 
You are a victim, and they're definitely sharks.

But there are 3 outcomes:
1) You'll have to go to court, it'll cost you a thousands if anything.
2) You'll get blacklisted, and trust me you don't want that. Takes years to rectify.
3) They don't do anything, you get to keep R183.

It's not worth taking the chance, pay the remaining amount and chalk it to experience for the future.
 
Humberto is correct, although this s currently before the courts.

Suggest you draft them a written letter stating that in terms of section 103 of the NCA, you have settled the debt by virtue of having paid twice the original debt. Hence any balance they hold must be written off. Also maintain that should they prejudice you in any way henceforth (credit bureau listing etc) you will hold them liable for any damages you may incur.
refer them to the following case law. Nedbank v NCR judge Malan states:
Once the amounts referred to in s 101(1)(b) to (g) that accrue during the period of default, whether or
not they are paid, equal in aggregate the unpaid balance of the principal debt at the time the default
occurs, no further charges may be levied.
 
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Before you signed anything, they should have clearly explained the contents of the contract or document otherwise it can be considered illegal. I'd suggest you contact the financial services ombudsman http://www.faisombud.co.za/about and a lay complaint with them.
Taken from their website is the following:

"Complaints

The FAIS Ombud deals with complaints submitted to the Office by a specific client against a financial services provider. “Complaint” means a specific complaint relating to a financial service rendered by a financial services provider or a representative of such provider to the complainant. The complaint will be considered if it is alleged that the provider or representative:

has contravened or failed to comply with a provision of the FAIS Act and that as a result thereof the complainant has suffered or is likely to suffer financial prejudice or damage;
has wilfully or negligently rendered a financial service to the complainant and has caused prejudice or damage to the complainant or which is likely to result in such prejudice or damage; or
has treated the complainant unfairly."

Worth a try.
 
My opinion is they won't do jack as the amount is too small.

However, prepare for months of harassment since the people who work for these companies get a commission based on the amounts they recover.
 
YingYang said:
My opinion is they won't do jack as the amount is too small.

However, prepare for months of harassment since the people who work for these companies get a commission based on the amounts they recover.
Click to expand...

Credit Intel is not a scam and are perfectly legit. They will list you with the credit bureaus for any unpaid debt if it falls under NCR or not. My brother complained to the ombud and they ruled that he must pay. As I am a third year law student, my brother came to me with the same problem.

I think Loan Discovery has changed their name to Loan Detector SA. https://www.ldsa.co.za/wp/apply-online/
Why don't you guys read the terms! For a fee of R 399 LDSA will send your loan application to all the banks. They debit your bank, but if you don't have money in your bank and it bounces, they will hand you over to debt collectors Credit Intel.

Credit Intel will charge you fees laid down by law, but it is more than double the amount because it can include interest, commission, communication fees plus VAT.
 
great said:
Credit Intel is not a scam and are perfectly legit. They will list you with the credit bureaus for any unpaid debt if it falls under NCR or not. My brother complained to the ombud and they ruled that he must pay. As I am a third year law student, my brother came to me with the same problem.

I think Loan Discovery has changed their name to Loan Detector SA. https://www.ldsa.co.za/wp/apply-online/
Why don't you guys read the terms! For a fee of R 399 LDSA will send your loan application to all the banks. They debit your bank, but if you don't have money in your bank and it bounces, they will hand you over to debt collectors Credit Intel.

Credit Intel will charge you fees laid down by law, but it is more than double the amount because it can include interest, commission, communication fees plus VAT.
Click to expand...

How can it be more than double, as it exceeds In duplum? Yes, it includes interest, collection commission etc, but in duplum has been reached already.

Unless of course, they are registered as an attorney firm, that changes the way they can collect.
 
great said:
Credit Intel is not a scam and are perfectly legit. They will list you with the credit bureaus for any unpaid debt if it falls under NCR or not. My brother complained to the ombud and they ruled that he must pay. As I am a third year law student, my brother came to me with the same problem.

I think Loan Discovery has changed their name to Loan Detector SA. https://www.ldsa.co.za/wp/apply-online/
Why don't you guys read the terms! For a fee of R 399 LDSA will send your loan application to all the banks. They debit your bank, but if you don't have money in your bank and it bounces, they will hand you over to debt collectors Credit Intel.

Credit Intel will charge you fees laid down by law, but it is more than double the amount because it can include interest, commission, communication fees plus VAT.
Click to expand...
Sounds exactly like a scam.

Joker said:
You are a victim, and they're definitely sharks.

But there are 3 outcomes:
1) You'll have to go to court, it'll cost you a thousands if anything.
2) You'll get blacklisted, and trust me you don't want that. Takes years to rectify.
3) They don't do anything, you get to keep R183.

It's not worth taking the chance, pay the remaining amount and chalk it to experience for the future.
Click to expand...
The individual will already be listed.
 
Lord Nikon6 said:
How can it be more than double, as it exceeds In duplum? Yes, it includes interest, collection commission etc, but in duplum has been reached already.

Unless of course, they are registered as an attorney firm, that changes the way they can collect.
Click to expand...
These sort of shady loan companies will usually try to find loopholes in an attempt to extort as much money as possible.
 
noxibox said:
These sort of shady loan companies will usually try to find loopholes in an attempt to extort as much money as possible.
Click to expand...

Indeed, but if the company is not a lawfirm doing collections, they need to follow in duplum rules, i.e your fees may not exceed the amount of capital, you can only charge for a number of smses and calls.
 
Why would anyone pay R399 so that another company can go on your behalf and do loan applications at all the banks for you? What the hell? I can do that myself if I really wanted a loan. If you want a loan, you shouldn't even want to pay another company to do that to start with.

I really hope you learned a valuable life lesson.

1. Never sign anything unless you 100% sure you get something out of it, of equal value. Can also be, don't sign anything.
2. Some things you should do yourself.
3. Some things you really should ask for help from a friend/family member who have more experience and know more.
 
Does the amount in the in duplum principle not include lawyers' fees?
 
This whole business as well as the loans to blacklisted individual sector seems very suspect.

First off, knowingly providing a loan to a blacklisted individual could end you up on the wrong side of the NCR, especially when the company needs to explain how they determined affordability knowing the individual was already blacklisted for debts he or she could not pay. If there is any company giving these type of high risk loans, they obviously stand the chance of loosing their money and agreements if someone takes this matter to the NCR. So, I can eventually see these companies dealing with unscrupulous individuals threatening families and clients in getting their money back.

Secondly, the https://www.ldsa.co.za/wp/apply-online/ website looks like one huge scam. They state on their website's front page that they will assist those who banks refuse to assist. So, it would appear as if they are dealing with these type of companies. My questions I have:

1. What if they have 5-10 companies they registered themselves and claim they have submitted the applications to these companies who all declined the application. (Do they ever tell you where the applications are sent? Does anyone follow up?)

2. Did anyone ever get an actual loan through this service? Can they confirm which company gave the loan?

I don't know about this. I think this is an easy way to get a fast R399 - and even more in a few months time.
 
Humberto said:
Does the amount in the in duplum principle not include lawyers' fees?
Click to expand...

Noxibox how can you call it a scam? You are naive! Can't you READ. It clearly says they going to charge you R399 for submitting your loan and giving legal advice and you have to give them your bank account details.
Yes, you can submit your loans yourself. Do that and see how long it's going to take you to fill in all those forms. It is well worth it in my opinion. I'm not sure what legal advice they offer, as I have not studied that yet.

In duplum means they can charge you interest up to where it is double the capital amount.

This is what a debt collector can charge you on a R399 debt:
1)Interest: R399
2)Communication Fees: R 399
3)Collection Commission: R 39.90
4) Vat on point 2 & 3: R 117.30
So in total the debt collector can charge you R955.20, bringing the total to R 1354.20.
However if they continue into legal, the attorneys can charge you whatever they want, there is no ceiling to what they can charge you!
 
great said:
Noxibox how can you call it a scam? You are naive! Can't you READ. It clearly says they going to charge you R399 for submitting your loan and giving legal advice and you have to give them your bank account details.
Yes, you can submit your loans yourself. Do that and see how long it's going to take you to fill in all those forms. It is well worth it in my opinion. I'm not sure what legal advice they offer, as I have not studied that yet.
Click to expand...
1. It is as good as a scam catching out naive people.

2. I still don't think it is worth the money using a company like that. I have banks and all kinds agencies trying to sell loans to me, with the latest one from Sanlam being a so called elite black card. That said, I refuse to take out loans, except for property.
 
great said:
Noxibox how can you call it a scam? You are naive! Can't you READ. It clearly says they going to charge you R399 for submitting your loan and giving legal advice and you have to give them your bank account details.
Yes, you can submit your loans yourself. Do that and see how long it's going to take you to fill in all those forms. It is well worth it in my opinion. I'm not sure what legal advice they offer, as I have not studied that yet.

In duplum means they can charge you interest up to where it is double the capital amount.

This is what a debt collector can charge you on a R399 debt:
1)Interest: R399
2)Communication Fees: R 399
3)Collection Commission: R 39.90
4) Vat on point 2 & 3: R 117.30
So in total the debt collector can charge you R955.20, bringing the total to R 1354.20.
However if they continue into legal, the attorneys can charge you whatever they want, there is no ceiling to what they can charge you!
Click to expand...

This is incorrect. In duplum means that they can add fees up until as much as the capital/handover amount, it may not exceed the capital amount, not double that amount.

Regarding the legal fees, that is correct, legal fees do not get capped on in duplum rule.
 
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