Problems related to the receipt and distribution of payments

Problems related to the receipt and distribution of payments by consumers:

a) The payment distribution agents who are involved in the distribution of payments by consumers to creditors once the consumer’s repayments have been restructured are not provided for in the NCA.

b) Payments intended to reduce the indebtedness of consumers are often rejected or end up in the credit providers’ suspense accounts and are not allocated because the incorrect account numbers have been provided or used;

c) Debit orders set up to draw payments from consumers’ accounts to reduce their indebtedness fail because pre-existing debit orders and salary deductions are not cancelled;

d) There is no provision in the Act or in practice for interim payment arrangements between the consumer and credit providers pending resolution of a case. Payment interruptions are treated as defaults by credit providers and cases are terminated after 60 business days.

e) There is no effective collection mechanism to make sure that consumers continue to make monthly payments to meet their obligations in terms of restructured payment plans.