00:00:02
Speaker 1: Masterclass masterclass time on seven o two afternoons. Today's masterclass is on dead collection businesses and agencies. The backstory is we were in a conversation with Wendy Nola and our Consumer Rights feature, and in that particular conversation, feel free to go to primarierplus dot com.
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Speaker 2: It's the week before last, not this past one.
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Speaker 1: But in the conversation, we were dealing with a case that was presented to Wendy where a woman had an account that was handed over to a dead collection agency and then she was paying only for another dead collection agency to get in touch with her, and Wendy then started to explain that actually that is the norm, and we were then curious how exactly do dead collection agencies work? What are the rules? The issue got resolved. The problem was where the woman was paying back. It was the old bank account I think of the first dead collection agency and the clothing store account. Then got settled and they apologized after Wendy intervened. But we thought this is a great opportunity, especially because in our Consumer Right feature we and Finance Future we have many conversations around debt review being handed over, which process comes when, at what point does it impact your credit score? And so on and so forth. So I'm so happy that joining us in this conversation as we delve into dead collection businesses and agencies. We're joined by Steerfan Ferrera, CEO and co founder of Bridel Ferrera, which is a dead collection and credit management company.
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Speaker 2: Welcome to the show. Thank you for joining us.
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Speaker 3: Thank you very much.
00:01:52
Speaker 2: So I am so.
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Speaker 1: Fascinated the story that I just shared is that something that is common where you can have more than one debt collection agency getting in touch with.
00:02:04
Speaker 2: You for a debt that they have.
00:02:09
Speaker 1: Because I also recall Wendy mentioning that a company can buy debt and start to chase and we were like, what does that happen quite often?
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Speaker 3: Well, in out of my experience, it doesn't really happen that often, but it is possible. You know. This is this is due to really, you know, bad negligence and bad administration from credit providers. You know. So what credit providers do you know, specifically large companies or banks, they'd have more than one debt collector on their panel, you know, and they will rotate some of the accounts between the different debt collectors. Oh, you see that Okay, you know this is how that happens. So how this would have happened? Now, this is what should happen, is they should withdraw the account and then hand it over. This is the right procedure, so you know. So in this specific case, possibly it wasn't withdrawn or the withdrawing instruction was not followed before it was handed abit the following debt collector.
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Speaker 2: I got you.
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Speaker 1: I think also they mentioned that after a certain period, if they have not collected, then they can move on to another agency, something along those lines.
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Speaker 2: I got you.
00:03:17
Speaker 3: They have quite tit rules.
00:03:19
Speaker 1: Yes, yes, I was actually wondering when Wendy was explaining. I had said to her, is it like the toe truck guys, where it's the first word on site? Wait, it's me, you know. But he was explaining, it's not quite like that. It's not a first come, first serve. But maybe take us a little bit back. For a person to even run a debt collection or a credit management company, what does it take to get to that point where you now own one? What does it take to be a debt collector? Are there certain qualifications one needs to have? Are there certain bodies one needs to belong to maybe share with us, especially if somebody is listening that's like.
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Speaker 2: I would love that job.
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Speaker 3: Well, you know, to to there are different types of debt collection, so you get pre legal debt collection and then you get legal debt collection as well. You know, so pre legal debt collection, which is a large fear and the largest areas of business in South Africa for debt collection comes in the pre legal phans. You know, this is trying to resolve matters before it goes to court because when when when matters are handled over to court, you know, you're dealing with a lot of additional legal fees, You're dealing with the risk of things are not being recovered, you know, and obviously you're dealing with the South African legislation service or system that is not you know, on the same level as some of the European countries, which makes processes take very long, you know to collect debt. So what we've done and what debt collection companies do is they really try to collect before things go to court. And for you to do that, you don't need any qualifications. You need to register as a registered as a depth collector at the National Council for the DEPP collectors. So the National Food Council for DEPP Collectors is the regulatory body in South Africa and they put down the laws and the legislation. So there is a Depth Collectors Act number one one four of nineteen ninety eight which regulates what DEPP collectors can and cannot do. And then also there's a code of conduct stipulated by the Council for DEPP collectors that also you know, you have to adhere to and to follow. And then if there are any complaints from a consumer or from a data or in fact from a client from a credator against the death collector, it can be can be you know, handled through them. So then you go through them and they investigate the case and they guide you and you know, help you to stay in line in terms of the regulations to respect the South African laws and respect consumer rights.
00:05:56
Speaker 1: Is collection quite a high risk industry. I'm curious because for many of us, a dead collector is the image of like the scary Masha, which I know does not apply because is the lone guy, but he alsoes the loan shock and he's collecting his money. But you imagine the scary character that's going to threaten your kids, and.
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Speaker 2: You know, is it quite a boring picture?
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Speaker 1: Is like a Hollywood action film?
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Speaker 3: Well, I guess, I mean, I guess. You know, that's the biggest misconception that people have abound about dead collectors are there, you know, they're all these bold guys, you know, and you know, excuse the pun.
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Speaker 2: He really.
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Speaker 1: I was looking at you wondering, I wonder if he's carrying a piece.
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Speaker 3: Not go that far.
00:06:54
Speaker 2: But it's more a boring office job.
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Speaker 3: No, not at all. I mean, it's not it's not boring at all, you know. I mean, it can be boring. It depends on how that you make it, you know. So you know, we for example, at our company, we have different teams, you know, and then we have competitions between the teams, you know, and we have certain things that we implement and we write, and we're quite creative in terms of what we're doing. You know, that is majoritatively a telecommunications job. To make that fun and interesting, you know, and obviously you're dealing with a lot of fun. You're dealing with a lot of jokes, you know, You're dealing with theaters and people coming up with crazy excuses, you know, like listen, to what this guy just said, you know, like he said his teeth fell out and he's going to send us the teeth, you know, or you know, it's quite there's a lot of interesting, small little things about this, and you know, we definitely make it interesting to do that.
00:07:43
Speaker 1: You are in one of the industries that I'm trying to find the most politically correct and kind way to say this that can benefit from hardship of people, like now with the industry being in the tough time it is.
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Speaker 2: And it's no shade to the industry.
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Speaker 1: It's the same as funeral businesses thrive when people die, toad truck companies thrive when their car accidents.
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Speaker 2: Are dead collectors.
00:08:11
Speaker 1: Making more money now with the crash of the economy because now you probably have more people being handed over or is it tougher now because fewer people are honoring and they end up being passed on to the next step.
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Speaker 3: Well, you know, I think it goes both ways. Definitely, Like obviously, dead collectors benefit from from hardship, but it's not always necessarily hardship. It's you know, individuals that don't act with integrity. A lot of the people that we are collecting from are not always, you know, in in financial hardship. People that are with in financial hardship, you know, and are really true and honest people and good South Africans, they try to they try to make arrangements, you know, so they stand with hand in hand and they say, okay, I'm sorry, I'm in a difficult situation, you know. So, I mean, you do get those debt collectors that contact you and like, hey, you've been handed over, you know, pay your way blacklist you, you know, but like having another approach like hey, what's the situation, why didn't you pay? You know, taking that type of protocol, you're really trying to understand what is the person, what is their situation, and then navigate with them to do the right thing at the end of the day, which is being your account. You know. But the dep collection industry doesn't only stop with collections itself, you know. There are other associated services with dep collection as well. For example, we have a product we we do credit white label credits control, so we act on behalf of companies before this thing goes to debt collection, you know, just to ensure that they have you know, good cash flow as well. And then you get other products as well like credit checks, you know a lot with with with risk management and these these type of things. Protocol, so a lot of other things in the sphere that that that help us or you know, in companies in our industries you know, navigate risk, stay in good communication with with with clients, and a good customer relationship between credit providers and customers.
00:10:04
Speaker 1: Please help us understand because I know when it comes to your industry, you deal with the rands and scents to the random scent. So I know there was a day I went to get my post, which you can tell how long ago that was, and I'd received a check for like one rand and seventeen cents from I don't know, a doctor or whatever that they said I overpaid, And I remember thinking to myself, it's so insignificant for me to even go and cash this check and the petrol it's insignificant. But I also know that there are people who've been handed over for seventeen cents. So do you guys ever have a below this amount? We won't go into hard or is it like you treat whether you owe hundred thousand rand or seventeen cent? Exactly the same was even with the traffic cops. You know, with the speeding I think you get like a percentage grace. So if you're at sixty three kilometers per hour in a sixty zone, they.
00:11:09
Speaker 2: Give you grace.
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Speaker 1: But then over a certain amount is like you're definitely getting something. Doesn't work the same way with the numbers.
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Speaker 3: Yeah, I think usually it does. Like we we don't take, for example, any accounts below two hundred rand, you know, on practice, but if there's for example, a large Dais book that has one hundred rands, we would you know, try to collect on that as well, you know, not not not much, but anything under that. Like it depends on the amount of communication that you do in the amount of work that you put in to try to collect seventy rand, you know. But a lot of companies and a lot of internal policies like we don't hand over something below this amount. Yes, I mean, we have had those requests from our clients to do this. You know, we try to help our clients. And then what we do we send out an SMAs and we send out a reminder, you know, we trace the person, you know, can you pay because sometimes maybe they couldn't get hold of someone or there. Oh yeah, listen, you still owe this, but yeah, not seventeenth cents. You know that sounds a little bit absurd.
00:12:07
Speaker 1: I mean, I was even wondering if in your career you've ever been tempted to just pay someone's debt for them, because you're like, this is such an insignificant not insignificant, but.
00:12:18
Speaker 2: It would be quicker if you just did it yourself.
00:12:20
Speaker 1: Have you ever thought, as I thought, ever crossed your mind early on in your career?
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Speaker 3: Well no, not really, but I mean, like we have like written off people's date. You know. For example, there was a there was a it was an ambulance account. This old lady of eighty two years old was picked up by the ambulance. You know, someone called the ambulance. It was a private ambulance service. And now she got handed over. And she was living in the old age home on a sassa grant, you know. So now you know, and and this this, this woman sent a handwritten letter. Right listen to this. She sent a hand written.
00:12:53
Speaker 2: Don't make me cry. This, don't make me cry with the story. My eyes are getting theory. Okay, I'm listening.
00:13:00
Speaker 3: So she she seemed a handwritten later and requested us to pay us, and she said she would pay she would skip one meal a week to pay us twenty rand a week off on the account, you know, And I mean, how can you do that, you know, like I mean written off, Like listen, let's let's stop this type of stuff. You know.
00:13:23
Speaker 1: So my heart, I knew the story was going there, she was going to skip a meal, h.
00:13:32
Speaker 3: But I mean, you know this, this is this is the type of stuff, you know, And this is what shows real integrity in some people, you know, and I mean people like that you'd really try to help, you know, And this is this is something that a lot of people you know, should you know, can come to understand as well. And you know, should really that trial that if they are in hardship, all these these type of things, the best thing to do at the end of the day is to really communicate open and honestly, like I said, this is this is my situation, you know, like I didn't plan this, like I had some issue, I lost my job. Here's here's the supporting documentation, you know, And then a lot of the times you can really listen to someone like this. I mean, I'm not saying that everybody will do that. You get some day, you really do get some dead collection companies that are outdate like age.
00:14:09
Speaker 2: Don't need that meal that's our twenty round. Oh my gosh. And and I mean, maybe help us.
00:14:18
Speaker 1: Understand if you write off the date, who's carrying that cost your business or your client?
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Speaker 3: Well that that really depends. Like I mean, we obviously like they will be usually a split. So I mean in a case like this, and what happened in the situation, like I contact the ar, contact the client. I'm like, listen, look at the situation, like it's not right for us to continue with this. Can we just can we just write this off? You know, we can just help this woman. And you know we obviously we've invested in you know, some amount and some of the collection fees, you know, and some of our own money's in terms of these collections. So and then you know, obviously the client's wretting that also both of us take that knock at the end of the day. You know a lot of other times people like they would come with settlement proposals and stuff like that. Then so most you know, a lot of the times it's a shared it's a shared thing.
00:15:03
Speaker 1: Now, can you talk to us about the basic ecosystem that you operate in. So from the time that I go and take a loan, let's say I go and open a clothing account, and then once so you've got the customer, You've got the creditor, yeh, the creditor, yeah, thank you. I just got confused left or right? And then from there that period of at what point do then the dead collection coming because I'm assuming from there it goes from their finance maybe to their legal to you, and then from there it.
00:15:42
Speaker 2: Would go to the next step.
00:15:43
Speaker 1: Can you talk to us about that ecosystem and how many days it takes for you to be handed over according to the law.
00:15:51
Speaker 3: So I mean, according to the law, you can be handed over the moment that your amount becomes due and payable and you have not paid it.
00:15:57
Speaker 2: So that's thirty days.
00:15:59
Speaker 3: No, that's like it's twenty four hours. Oh. If you say that you're going to pay an account or your terms and conditions state that your account should be paid, you know within you know, on the let's say on the sex of of of August, it should be paid on the sixth of August, like the seventh of August. You know, you already pass due so you can start taking action, you know.
00:16:18
Speaker 1: So.
00:16:19
Speaker 3: But however, you know, different companies have different policies in terms of when do they handover, how much do they handover. You know, some people handover quicker like usually you know, there's an internal policy that they fall they have telephone calls, a SMA says internal letters that goes out and then you know, anything between thirty and one hundred and twenty days, mostly on ninety days, between nineteen one hundred and twenty days, you can you can expect handover.
00:16:44
Speaker 1: Any question the one hundred and let's say it gets to the ninety days. At this point, has interest already started being charged or it depends on how the business does thing.
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Speaker 3: Yes, it definitely depends on the credit provider. I mean that is so much bigger than just clothing accounts or lank accounts. I mean you're looking at medical accounts, you're looking at school accounts. You know, you you the data industry is so vast, you know, so looking at these obviously you get like you know, the big clothing brands, they that's how a portion I think I make about five percent of their income from from interest, five to ten percent of their income is purely interest. So it's it's quite a substantial revenue stream for them as well. So but yeah, they do charge that, you know, in terms of what's permitted to them. And if the company, for example, like a doctor, is not registered for interest you it's something you call incidental credit. So you would place a person what you call in moora some fancy Latin term. I can't remember the full one, but they see they should send you a notice. There's a notice would say that you're overdue and I'm going to charge your interest within the applicable interest rates according to African legislation, you know, which is relative irrelevant. It changes from time to time, and then you can charge them interest as well. So yeah, it can accumulate anything from usually thirty days.
00:18:11
Speaker 1: Okay, so back to the ecosystem in that period, so the moment the money is owed, they can come to you. How do you usually get that information? I mean, let's assume it's not a complicated, massive business. Would that be an email or it's a software where this it automatically goes in and then it comes with obviously the details.
00:18:35
Speaker 3: Yeah, I mean it depends on the size of the of the of the client or outline or the credator. Large large corporations have like drop files. They share the files through a secure FDP link. I mean, you know, confidentiality is is really important as well, you know, you're dealing with a sensitive consumer information. And then it will also be you know, the files. You know, so we for example, we request the files the actual invoices, ohh, so that we can under you know, so that wherever we're talking to that they can understand this is legitimate business. You know, we are legitimately representing client X, and you are owing this amount and this was for example, a mist payment for June, July and August, and this is the situation you know where you're in.
00:19:15
Speaker 1: Yeah, and then do you ever have situations in that part of the process where the creditor got it wrong? So for example, I've had doctor's rooms. I'll get an SMS which is like we're going to hand you over, and I'd be like, what are you talking about? They're not phone and they'd be like, we've been emailing you and now you haven't paid. And then only to find out that they've been emailing the wrong address, as in like they just made one letter mistake. And then afterwards, I'm like, so what happens now? So do you ever find that there are errors in their system when it comes to.
00:19:56
Speaker 2: Handing over people to you as a dead collector?
00:19:59
Speaker 3: Oh? Y is for sure? You know this this this happens all the time, you know, specifically with the smaller institutions. You know, now it's getting better because of the technology and everything, but you know, you do get human errors, you know, typos or whatever that fact might be. You know, we we we have internal protocols just to ensure that whenever, for example, a legal agent or a debt collection agent gets a new new file that they you know, confirm all the information is correct.
00:20:28
Speaker 4: You know.
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Speaker 3: Sometimes it happens, seldomly that you would look at on the doctor's patient form and then you can't read the person's handwriting.
00:20:35
Speaker 1: You know.
00:20:36
Speaker 3: So this is honest mistakes, you know, and then you just you just happen.
00:20:39
Speaker 2: And it's only fair.
00:20:40
Speaker 1: Our writing is illegible at the doctor's rooms.
00:20:44
Speaker 2: It's only fair, okay. And I think.
00:20:48
Speaker 1: When we come back from the break and we delve a little bit into how far you can take it, and maybe some tips as to which are the kinds of phone calls that are not true dead collected versus the others and the things to look out for. So we'll continue with our masterclass when we come back O double one double A three oh seven oh two and the WhatsApp line oh seven two, seven oh two one seven O two.
00:21:11
Speaker 2: Seven two Masterclass.
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Speaker 1: Twenty minutes two three o'clock. We continue with our master class on dead collection Businesses and agencies with Steerfan Ferrera, CEO and co founder of Brudell Ferrera, a dead collection and credit management company. OH double one double A three oh seven oh two, the WhatsApp line oh seven two, seven oh two and seven oh two. So we've touched on some of the players in the industry. We've also touched on when debt is handed over at what point now does in the process and in this ecosystem, what are the rules and is it client specific as to at what point do you say we can't recover or you know, does your clients say you have three months to solve this elsewhere handling it like, how does that whole part of the process work before it needs to be at the next part, which is handing over to the courts.
00:22:09
Speaker 3: Well, I think that that really depends on the credit provider or the client, what they do, and other factors that play are all is the size of the debt, the age of the debt. So it's quite it's quite. It could be quite intricate. However, majority ofly, you know, you you take it through a stage of notices, so you know, you get a formal notice. Would it be a notice or a section one twenty nine which is a letter that states that we afford you twenty one days to pay, and then if you don't pay within twenty twenty one days, it could adversely affect your credit record, which you could for example list someone on the credit bureau you're blacklisting, or then you know, take it further.
00:22:53
Speaker 1: So this process, that letter is that before you do the phishing expedition, that as in, does the letter go when the thing is handed over or does that go after you've established that this email is working, we've got the right person, blah blah blah.
00:23:11
Speaker 3: Well, usually it depends on campaigns. Usually we send that out like in bulk, and you know, then we send our telephone call campaigns you know, and speak to everybody as well. We send out formal legal you know, just handover notices as well via SMAs and you know VI via email to say like listen, we you've been handed over and you know we administering this case. We're acting on behalf of this client and you know, just as a notice, so that will be your first communication. And then what we would do is we would send out the letter and the company and buy a telephone call usually at the same time. If we would not get hold of the person you know, at the specific point in time, then we would send out the letter and you know, a notice for you know to call us as well, because legally you have to send out this notice, you know, to proceed to further possible state you have to formerly in writing notify the person of the debt and you know and read them their rights as well. You know, you have a right to approach a dead counselor you you have the right to dispute the account. You have the right to make an arrangement which is acceptable. So there's specific things that needs to be in this letter according to South African legislation.
00:24:21
Speaker 2: So what happens if.
00:24:26
Speaker 1: The person you just don't get hold of them, does the twenty one days start counting?
00:24:31
Speaker 2: Or what happens?
00:24:32
Speaker 1: And I asked this, because let's assume the person didn't you didn't get hold of them. I'm in a situation where a former domestic worker had me as her reference on an account she got handed over, and I told them multiple times that she's died and given the family details that I could find. But it was probably on there from long ago, because long before she passed away, she was not longer no longer working for me.
00:25:01
Speaker 2: But I still see the SMS is now, and I said, well.
00:25:04
Speaker 1: There's nothing I can do about it of them still asking for this debt to be paid, So I'm assuming they haven't gotten hold of anybody. And it's still the time just keeps ticking away and the messages keep coming for this person that's handed over. Is there an internal process where I don't know, death certificates are checked, or an internal process where they say, guys, it's been three years and we haven't gotten hold of this person. We're writing it off like what happens, Because even for me, the dead collection comes with a reference, a number and whatever.
00:25:39
Speaker 2: I'll call, hey, guys, this person has died.
00:25:42
Speaker 1: I don't have the death certificate because I'm not the family, but I would assume something in your systems should be able to show you that this is not going to happen.
00:25:52
Speaker 3: Yeah, for sure. I mean what you're talking about is absolute language and some bad administration from a dead collector. Yeah, Like the moment that you understand that a person or even hear the word that a person has been deceased, you have you as a depth collectors have the right and access to consumer information through the information and credit bureaus, so you can run a trace on that person and confirm whether or not that person's deceased. But I mean there are there are you know, odd cases here and there, you know, where there's administration problems as well, you know, usually not, I mean, we don't really have problems with that. Like I don't even know of one case with us where we've found out that the person has been deceased and we've traced and the person has not been been deceased. Because if a person has deceased, home a phase you know, processes this information that the person is deceased, and the credit bureaus are directly linked linked with the with home affairs. So I mean this is this is more or less live information that they're getting. So in this case that you're having, you've you've been working with somebody that doesn't probably doesn't have you know. I mean it could be for a depth collector that they are not associated with one of the bureaus. But I find that highly unlike.
00:27:00
Speaker 1: But I so out of interesting the link between home affairs and that information. Is it to protect from fraud or was it so that you guys cannot chase off the people who are dead, because I would imagine that the moment somebody has deceased, everything needs to get frozen. Is that why there's a direct link to home affairs? No?
00:27:22
Speaker 3: No, well, I mean we we have access to a lot of information as well, you know, and this is this is to protect you know and uphold the law in South Africa. So we have access to contact details, possible other contact details, uh, home addresses, ID numbers, telephone numbers, property interests. So for example, if you own a house, it'll it could you know it would it would display there if you're a director at a company, you know other telephone linkages as well. So I mean you get a lot of information that is available to you as a debt collector, and you know, when you get a license to to handle this information. You can use this information to help to collect deb and I mean this this is this is a tool that helps us uphold you know, and assist creditors because I mean you're looking at creditors, you know, and credators pray play an important part in the South African economy. You know, they assist people to to ascertain goods, you know, on credit and then therese you know, there's a flowing economy through that. You know, when when people don't have bias confidence, you're looking at your economy falling. So they do play an integral part, you know. But these credators as well, you know, they they they you know, they need to to understand their cashal and monetor their risks as well, you know, so credators would use dep collectors to assist them with these because dep collectors have have infrastructures to do massive volumes of of of communication as well. So it's to protect the the the ecosystem of our economy and the tegral part of our economy, to ensure and to help that as much that gets paid as possible.
00:29:01
Speaker 1: All right, we need to take another break when we come back. I see your questions on the whatsap line O dodible one double a three oh seven oh two in the WhatsApp line oh seven two seven oh two and seven.
00:29:09
Speaker 2: O two Masterclass ten minutes two three o'clock.
00:29:15
Speaker 1: As we are continue with our masterclass on dead collection Businesses and Agencies O double one double a three oh seven oh two the WhatsApp line oh seven two seven oh two one seven two. We're with Steerfan Ferrera, CEO and co founder of Bridal Ferrera and uh, we are going to your question, so.
00:29:33
Speaker 2: Let me see hire le Brilla.
00:29:39
Speaker 1: It may be a side story, maybe more sort suited to a Ninja Noless situation or consumer rights journalist. But I've been getting a lot of calls to consolidate your debt which are really masquerading as dead relief traps. I did a deep dive and it is a proper scheme, and the call center agents become quite aggressive as they were confronted, saying that I elected to be on this system. This is from Robert in Houghton. Is that standard industry practice?
00:30:08
Speaker 3: I mean they you're looking at the debt consolidators debt what do they call themselves? A debt debt review.
00:30:16
Speaker 1: Like something like their counselors, counselors what I was looking for.
00:30:20
Speaker 3: Thank you, you get debt counselors, you know, and these guys have these guys are basically selling to you that they will you know, you can you can pay you can pay less money on your debt, and I mean that that's not the case, you know. And then you sign up with them and you need to pay them additional fees and all of these things. So now you're getting somebody to to consolidate your your your debt for you, your to counsel your debt for you. And what they do is they they break your debt up into into into every creditor and then they contact the creditors you know, and make arrangements, and then they go to court and they get like a court order so that you can't be you know, they can't take further legal action against you, you know. So I mean, like I guess in some cases it could be helpful as well, you know, if you have a debt collector that really wants to come after you and really hasn't tend to to, you know, to collect against you. But I mean, and in a vast majority of the cases, you know, if you as a consumer can speak to your debt collectors and really make proper arrangements and forthcoming and saying like, listen, I know like I'm in debt or I had the situation. Can I make an arrangement all these things? You know? Then then you know it could It could work as well. You don't need to go to a dead counsel or something to consolidate council to consolidate your debt. If you if you're own three or four, five, six, seven people, you can really with honest and open communication, you can do with yourself.
00:31:47
Speaker 2: All right.
00:31:47
Speaker 1: The next one says, I paid I paid Elite for multiple months by my previous sympt I'm not sure what the late is.
00:31:59
Speaker 2: So please can recent this.
00:32:00
Speaker 1: Message because I think it's going to change the context of the question that you're asking. Okay, please can you get clarity on the sale of dbate from one data to another hours arrested by a famous collection company for years, the data is paid and it just never decreases, In fact, it increases.
00:32:18
Speaker 2: This is from.
00:32:18
Speaker 3: Tim Well, you know debt that increases would really depend on the interest rate for the creative provider that you you are. You know that you are owing. So if you are, for example, you're owing two hundred thousand rand on your credit card and you're paying two hundred and a month, I mean, of course that's your interest rates or your interest accumulated into some of the account is going to be more. So, I mean that would be that. But if you if you think that things are fishy and strange, you know to do the account and you really want to understand that if these fees are legitimate, you are welcome to contact you look at your credit provider, look at your contract, and you can contact the National Credit Regulator to understand what is the right interest fees that can be charged, you know, on this specific account. And as well, if the depth collector is charging you specific fees, you can see if these fees are are in fact in accordance with the Annexure B of the Depth Collectors Act. So the dep collectors are allowed to charge a specific fee for example for telephone calls consultations. But these are not large fees, you know, these are small fees, so you know, unless you've been handed over to an attorney, which could be another case as well. You know, so really look at you know, your creditor and look at the legislation from the person collecting from you, because it's not only depth collectors that can collect in South Africa. Attorneys can do that as well. You know, their fees are substantially higher when it comes to it. But then again they also need a court order to collect these things from you, so you know, yeah, just look at the contract and you can speak to the National Careiod Regulator as well to see if all applicable fees are with in accordance with the law.
00:34:12
Speaker 1: All right, we've got your voice notes on seven two, seven o two and seven oh two.
00:34:16
Speaker 4: Could they real level here, Sebastian, yet, could you please ask your guests to explain the title of when an account has not been collected on prescription as they call it, and when can people stop collecting if you're telling your account has been prescribed and they keep phoning and keep poning because you haven't acknowledged the debt, but they keep phoning. Sebastian, your thanks, have a great day, by thank.
00:34:45
Speaker 2: You, Sebastian.
00:34:48
Speaker 3: Yebastian. Yeah, according to South African legislation, debt automatically prescribes after three years, so unless that you've made a payment on that account within the next three years. Then there's another period of three the years that you can legally collect on that. Another thing that stops prescription or prelong subscription is is if you've acknowledged it in some way, you know that that you are out. So I mean if the data is within three years, they cannot legally collect from you.
00:35:21
Speaker 1: So yeah, all right, now the voice notes.
00:35:25
Speaker 3: I've got a question for the debt collector.
00:35:28
Speaker 4: Any business is allowed to invest the services of debt collection or do you have to be a national credit provider?
00:35:36
Speaker 3: Thank you? Now, I mean any business can can do debt collection. You don't need to be a credit provider. You need to be registered with the Council for Debt Collectors. So I mean not all debt in South Africa comes from credit providers. You get incidental credit. This is for example, you know, you go to the doctor and uh, you know, you get your teeth fixed and they the medical pays out a portion and then there is a portion that is not not not covered. No, this is this is not the doctor is not credit provider, the doctor. This is incidental credit. It wasn't intended to be credit, but the credit you know, and the loop in the in the in the in the business model you know, ends up in you know, debt being created, you know, which is basically created, so they become a creditor.
00:36:25
Speaker 2: Is that why.
00:36:25
Speaker 1: Some some doctors and hospitals will expect the payment to be done before the procedure.
00:36:31
Speaker 3: Oh yeah, that's that's a growing trend.
00:36:33
Speaker 1: Yeah, yeah, all right, we are going to have to leave it there, folks, if you are worried about so many of your other questions. So a person is saying if they haven't touched the debt of the five years, you're saying it's three years, then it's rich of But what Wendy did adviser is if you acknowledge, if you answer the phone and say yes, this and this has happened, the three years is over. So the acknowledgment part is what can kick it back and.
00:36:57
Speaker 2: Not even a payment. Yeah, we have a lot to learn.
00:37:02
Speaker 1: Sia Fan, thank you so so much for coming through, and I do hope we can have more conversations like this again, because it does sound like an industry where they are, like you say, loopholes for being unethical and.
00:37:16
Speaker 2: Other types of things.
00:37:17
Speaker 1: But it really really helps just empower us having these kinds of conversations.
00:37:21
Speaker 3: Thank you so much, thank you
Speaker 1: Masterclass masterclass time on seven o two afternoons. Today's masterclass is on dead collection businesses and agencies. The backstory is we were in a conversation with Wendy Nola and our Consumer Rights feature, and in that particular conversation, feel free to go to primarierplus dot com.
00:00:23
Speaker 2: It's the week before last, not this past one.
00:00:27
Speaker 1: But in the conversation, we were dealing with a case that was presented to Wendy where a woman had an account that was handed over to a dead collection agency and then she was paying only for another dead collection agency to get in touch with her, and Wendy then started to explain that actually that is the norm, and we were then curious how exactly do dead collection agencies work? What are the rules? The issue got resolved. The problem was where the woman was paying back. It was the old bank account I think of the first dead collection agency and the clothing store account. Then got settled and they apologized after Wendy intervened. But we thought this is a great opportunity, especially because in our Consumer Right feature we and Finance Future we have many conversations around debt review being handed over, which process comes when, at what point does it impact your credit score? And so on and so forth. So I'm so happy that joining us in this conversation as we delve into dead collection businesses and agencies. We're joined by Steerfan Ferrera, CEO and co founder of Bridel Ferrera, which is a dead collection and credit management company.
00:01:48
Speaker 2: Welcome to the show. Thank you for joining us.
00:01:50
Speaker 3: Thank you very much.
00:01:52
Speaker 2: So I am so.
00:01:55
Speaker 1: Fascinated the story that I just shared is that something that is common where you can have more than one debt collection agency getting in touch with.
00:02:04
Speaker 2: You for a debt that they have.
00:02:09
Speaker 1: Because I also recall Wendy mentioning that a company can buy debt and start to chase and we were like, what does that happen quite often?
00:02:21
Speaker 3: Well, in out of my experience, it doesn't really happen that often, but it is possible. You know. This is this is due to really, you know, bad negligence and bad administration from credit providers. You know. So what credit providers do you know, specifically large companies or banks, they'd have more than one debt collector on their panel, you know, and they will rotate some of the accounts between the different debt collectors. Oh, you see that Okay, you know this is how that happens. So how this would have happened? Now, this is what should happen, is they should withdraw the account and then hand it over. This is the right procedure, so you know. So in this specific case, possibly it wasn't withdrawn or the withdrawing instruction was not followed before it was handed abit the following debt collector.
00:03:05
Speaker 2: I got you.
00:03:06
Speaker 1: I think also they mentioned that after a certain period, if they have not collected, then they can move on to another agency, something along those lines.
00:03:16
Speaker 2: I got you.
00:03:17
Speaker 3: They have quite tit rules.
00:03:19
Speaker 1: Yes, yes, I was actually wondering when Wendy was explaining. I had said to her, is it like the toe truck guys, where it's the first word on site? Wait, it's me, you know. But he was explaining, it's not quite like that. It's not a first come, first serve. But maybe take us a little bit back. For a person to even run a debt collection or a credit management company, what does it take to get to that point where you now own one? What does it take to be a debt collector? Are there certain qualifications one needs to have? Are there certain bodies one needs to belong to maybe share with us, especially if somebody is listening that's like.
00:04:01
Speaker 2: I would love that job.
00:04:04
Speaker 3: Well, you know, to to there are different types of debt collection, so you get pre legal debt collection and then you get legal debt collection as well. You know, so pre legal debt collection, which is a large fear and the largest areas of business in South Africa for debt collection comes in the pre legal phans. You know, this is trying to resolve matters before it goes to court because when when when matters are handled over to court, you know, you're dealing with a lot of additional legal fees, You're dealing with the risk of things are not being recovered, you know, and obviously you're dealing with the South African legislation service or system that is not you know, on the same level as some of the European countries, which makes processes take very long, you know to collect debt. So what we've done and what debt collection companies do is they really try to collect before things go to court. And for you to do that, you don't need any qualifications. You need to register as a registered as a depth collector at the National Council for the DEPP collectors. So the National Food Council for DEPP Collectors is the regulatory body in South Africa and they put down the laws and the legislation. So there is a Depth Collectors Act number one one four of nineteen ninety eight which regulates what DEPP collectors can and cannot do. And then also there's a code of conduct stipulated by the Council for DEPP collectors that also you know, you have to adhere to and to follow. And then if there are any complaints from a consumer or from a data or in fact from a client from a credator against the death collector, it can be can be you know, handled through them. So then you go through them and they investigate the case and they guide you and you know, help you to stay in line in terms of the regulations to respect the South African laws and respect consumer rights.
00:05:56
Speaker 1: Is collection quite a high risk industry. I'm curious because for many of us, a dead collector is the image of like the scary Masha, which I know does not apply because is the lone guy, but he alsoes the loan shock and he's collecting his money. But you imagine the scary character that's going to threaten your kids, and.
00:06:22
Speaker 2: You know, is it quite a boring picture?
00:06:27
Speaker 1: Is like a Hollywood action film?
00:06:31
Speaker 3: Well, I guess, I mean, I guess. You know, that's the biggest misconception that people have abound about dead collectors are there, you know, they're all these bold guys, you know, and you know, excuse the pun.
00:06:42
Speaker 2: He really.
00:06:44
Speaker 1: I was looking at you wondering, I wonder if he's carrying a piece.
00:06:52
Speaker 3: Not go that far.
00:06:54
Speaker 2: But it's more a boring office job.
00:06:57
Speaker 3: No, not at all. I mean, it's not it's not boring at all, you know. I mean, it can be boring. It depends on how that you make it, you know. So you know, we for example, at our company, we have different teams, you know, and then we have competitions between the teams, you know, and we have certain things that we implement and we write, and we're quite creative in terms of what we're doing. You know, that is majoritatively a telecommunications job. To make that fun and interesting, you know, and obviously you're dealing with a lot of fun. You're dealing with a lot of jokes, you know, You're dealing with theaters and people coming up with crazy excuses, you know, like listen, to what this guy just said, you know, like he said his teeth fell out and he's going to send us the teeth, you know, or you know, it's quite there's a lot of interesting, small little things about this, and you know, we definitely make it interesting to do that.
00:07:43
Speaker 1: You are in one of the industries that I'm trying to find the most politically correct and kind way to say this that can benefit from hardship of people, like now with the industry being in the tough time it is.
00:08:00
Speaker 2: And it's no shade to the industry.
00:08:02
Speaker 1: It's the same as funeral businesses thrive when people die, toad truck companies thrive when their car accidents.
00:08:09
Speaker 2: Are dead collectors.
00:08:11
Speaker 1: Making more money now with the crash of the economy because now you probably have more people being handed over or is it tougher now because fewer people are honoring and they end up being passed on to the next step.
00:08:26
Speaker 3: Well, you know, I think it goes both ways. Definitely, Like obviously, dead collectors benefit from from hardship, but it's not always necessarily hardship. It's you know, individuals that don't act with integrity. A lot of the people that we are collecting from are not always, you know, in in financial hardship. People that are with in financial hardship, you know, and are really true and honest people and good South Africans, they try to they try to make arrangements, you know, so they stand with hand in hand and they say, okay, I'm sorry, I'm in a difficult situation, you know. So, I mean, you do get those debt collectors that contact you and like, hey, you've been handed over, you know, pay your way blacklist you, you know, but like having another approach like hey, what's the situation, why didn't you pay? You know, taking that type of protocol, you're really trying to understand what is the person, what is their situation, and then navigate with them to do the right thing at the end of the day, which is being your account. You know. But the dep collection industry doesn't only stop with collections itself, you know. There are other associated services with dep collection as well. For example, we have a product we we do credit white label credits control, so we act on behalf of companies before this thing goes to debt collection, you know, just to ensure that they have you know, good cash flow as well. And then you get other products as well like credit checks, you know a lot with with with risk management and these these type of things. Protocol, so a lot of other things in the sphere that that that help us or you know, in companies in our industries you know, navigate risk, stay in good communication with with with clients, and a good customer relationship between credit providers and customers.
00:10:04
Speaker 1: Please help us understand because I know when it comes to your industry, you deal with the rands and scents to the random scent. So I know there was a day I went to get my post, which you can tell how long ago that was, and I'd received a check for like one rand and seventeen cents from I don't know, a doctor or whatever that they said I overpaid, And I remember thinking to myself, it's so insignificant for me to even go and cash this check and the petrol it's insignificant. But I also know that there are people who've been handed over for seventeen cents. So do you guys ever have a below this amount? We won't go into hard or is it like you treat whether you owe hundred thousand rand or seventeen cent? Exactly the same was even with the traffic cops. You know, with the speeding I think you get like a percentage grace. So if you're at sixty three kilometers per hour in a sixty zone, they.
00:11:09
Speaker 2: Give you grace.
00:11:10
Speaker 1: But then over a certain amount is like you're definitely getting something. Doesn't work the same way with the numbers.
00:11:15
Speaker 3: Yeah, I think usually it does. Like we we don't take, for example, any accounts below two hundred rand, you know, on practice, but if there's for example, a large Dais book that has one hundred rands, we would you know, try to collect on that as well, you know, not not not much, but anything under that. Like it depends on the amount of communication that you do in the amount of work that you put in to try to collect seventy rand, you know. But a lot of companies and a lot of internal policies like we don't hand over something below this amount. Yes, I mean, we have had those requests from our clients to do this. You know, we try to help our clients. And then what we do we send out an SMAs and we send out a reminder, you know, we trace the person, you know, can you pay because sometimes maybe they couldn't get hold of someone or there. Oh yeah, listen, you still owe this, but yeah, not seventeenth cents. You know that sounds a little bit absurd.
00:12:07
Speaker 1: I mean, I was even wondering if in your career you've ever been tempted to just pay someone's debt for them, because you're like, this is such an insignificant not insignificant, but.
00:12:18
Speaker 2: It would be quicker if you just did it yourself.
00:12:20
Speaker 1: Have you ever thought, as I thought, ever crossed your mind early on in your career?
00:12:25
Speaker 3: Well no, not really, but I mean, like we have like written off people's date. You know. For example, there was a there was a it was an ambulance account. This old lady of eighty two years old was picked up by the ambulance. You know, someone called the ambulance. It was a private ambulance service. And now she got handed over. And she was living in the old age home on a sassa grant, you know. So now you know, and and this this, this woman sent a handwritten letter. Right listen to this. She sent a hand written.
00:12:53
Speaker 2: Don't make me cry. This, don't make me cry with the story. My eyes are getting theory. Okay, I'm listening.
00:13:00
Speaker 3: So she she seemed a handwritten later and requested us to pay us, and she said she would pay she would skip one meal a week to pay us twenty rand a week off on the account, you know, And I mean, how can you do that, you know, like I mean written off, Like listen, let's let's stop this type of stuff. You know.
00:13:23
Speaker 1: So my heart, I knew the story was going there, she was going to skip a meal, h.
00:13:32
Speaker 3: But I mean, you know this, this is this is the type of stuff, you know, And this is what shows real integrity in some people, you know, and I mean people like that you'd really try to help, you know, And this is this is something that a lot of people you know, should you know, can come to understand as well. And you know, should really that trial that if they are in hardship, all these these type of things, the best thing to do at the end of the day is to really communicate open and honestly, like I said, this is this is my situation, you know, like I didn't plan this, like I had some issue, I lost my job. Here's here's the supporting documentation, you know, And then a lot of the times you can really listen to someone like this. I mean, I'm not saying that everybody will do that. You get some day, you really do get some dead collection companies that are outdate like age.
00:14:09
Speaker 2: Don't need that meal that's our twenty round. Oh my gosh. And and I mean, maybe help us.
00:14:18
Speaker 1: Understand if you write off the date, who's carrying that cost your business or your client?
00:14:24
Speaker 3: Well that that really depends. Like I mean, we obviously like they will be usually a split. So I mean in a case like this, and what happened in the situation, like I contact the ar, contact the client. I'm like, listen, look at the situation, like it's not right for us to continue with this. Can we just can we just write this off? You know, we can just help this woman. And you know we obviously we've invested in you know, some amount and some of the collection fees, you know, and some of our own money's in terms of these collections. So and then you know, obviously the client's wretting that also both of us take that knock at the end of the day. You know a lot of other times people like they would come with settlement proposals and stuff like that. Then so most you know, a lot of the times it's a shared it's a shared thing.
00:15:03
Speaker 1: Now, can you talk to us about the basic ecosystem that you operate in. So from the time that I go and take a loan, let's say I go and open a clothing account, and then once so you've got the customer, You've got the creditor, yeh, the creditor, yeah, thank you. I just got confused left or right? And then from there that period of at what point do then the dead collection coming because I'm assuming from there it goes from their finance maybe to their legal to you, and then from there it.
00:15:42
Speaker 2: Would go to the next step.
00:15:43
Speaker 1: Can you talk to us about that ecosystem and how many days it takes for you to be handed over according to the law.
00:15:51
Speaker 3: So I mean, according to the law, you can be handed over the moment that your amount becomes due and payable and you have not paid it.
00:15:57
Speaker 2: So that's thirty days.
00:15:59
Speaker 3: No, that's like it's twenty four hours. Oh. If you say that you're going to pay an account or your terms and conditions state that your account should be paid, you know within you know, on the let's say on the sex of of of August, it should be paid on the sixth of August, like the seventh of August. You know, you already pass due so you can start taking action, you know.
00:16:18
Speaker 1: So.
00:16:19
Speaker 3: But however, you know, different companies have different policies in terms of when do they handover, how much do they handover. You know, some people handover quicker like usually you know, there's an internal policy that they fall they have telephone calls, a SMA says internal letters that goes out and then you know, anything between thirty and one hundred and twenty days, mostly on ninety days, between nineteen one hundred and twenty days, you can you can expect handover.
00:16:44
Speaker 1: Any question the one hundred and let's say it gets to the ninety days. At this point, has interest already started being charged or it depends on how the business does thing.
00:16:55
Speaker 3: Yes, it definitely depends on the credit provider. I mean that is so much bigger than just clothing accounts or lank accounts. I mean you're looking at medical accounts, you're looking at school accounts. You know, you you the data industry is so vast, you know, so looking at these obviously you get like you know, the big clothing brands, they that's how a portion I think I make about five percent of their income from from interest, five to ten percent of their income is purely interest. So it's it's quite a substantial revenue stream for them as well. So but yeah, they do charge that, you know, in terms of what's permitted to them. And if the company, for example, like a doctor, is not registered for interest you it's something you call incidental credit. So you would place a person what you call in moora some fancy Latin term. I can't remember the full one, but they see they should send you a notice. There's a notice would say that you're overdue and I'm going to charge your interest within the applicable interest rates according to African legislation, you know, which is relative irrelevant. It changes from time to time, and then you can charge them interest as well. So yeah, it can accumulate anything from usually thirty days.
00:18:11
Speaker 1: Okay, so back to the ecosystem in that period, so the moment the money is owed, they can come to you. How do you usually get that information? I mean, let's assume it's not a complicated, massive business. Would that be an email or it's a software where this it automatically goes in and then it comes with obviously the details.
00:18:35
Speaker 3: Yeah, I mean it depends on the size of the of the of the client or outline or the credator. Large large corporations have like drop files. They share the files through a secure FDP link. I mean, you know, confidentiality is is really important as well, you know, you're dealing with a sensitive consumer information. And then it will also be you know, the files. You know, so we for example, we request the files the actual invoices, ohh, so that we can under you know, so that wherever we're talking to that they can understand this is legitimate business. You know, we are legitimately representing client X, and you are owing this amount and this was for example, a mist payment for June, July and August, and this is the situation you know where you're in.
00:19:15
Speaker 1: Yeah, and then do you ever have situations in that part of the process where the creditor got it wrong? So for example, I've had doctor's rooms. I'll get an SMS which is like we're going to hand you over, and I'd be like, what are you talking about? They're not phone and they'd be like, we've been emailing you and now you haven't paid. And then only to find out that they've been emailing the wrong address, as in like they just made one letter mistake. And then afterwards, I'm like, so what happens now? So do you ever find that there are errors in their system when it comes to.
00:19:56
Speaker 2: Handing over people to you as a dead collector?
00:19:59
Speaker 3: Oh? Y is for sure? You know this this this happens all the time, you know, specifically with the smaller institutions. You know, now it's getting better because of the technology and everything, but you know, you do get human errors, you know, typos or whatever that fact might be. You know, we we we have internal protocols just to ensure that whenever, for example, a legal agent or a debt collection agent gets a new new file that they you know, confirm all the information is correct.
00:20:28
Speaker 4: You know.
00:20:28
Speaker 3: Sometimes it happens, seldomly that you would look at on the doctor's patient form and then you can't read the person's handwriting.
00:20:35
Speaker 1: You know.
00:20:36
Speaker 3: So this is honest mistakes, you know, and then you just you just happen.
00:20:39
Speaker 2: And it's only fair.
00:20:40
Speaker 1: Our writing is illegible at the doctor's rooms.
00:20:44
Speaker 2: It's only fair, okay. And I think.
00:20:48
Speaker 1: When we come back from the break and we delve a little bit into how far you can take it, and maybe some tips as to which are the kinds of phone calls that are not true dead collected versus the others and the things to look out for. So we'll continue with our masterclass when we come back O double one double A three oh seven oh two and the WhatsApp line oh seven two, seven oh two one seven O two.
00:21:11
Speaker 2: Seven two Masterclass.
00:21:13
Speaker 1: Twenty minutes two three o'clock. We continue with our master class on dead collection Businesses and agencies with Steerfan Ferrera, CEO and co founder of Brudell Ferrera, a dead collection and credit management company. OH double one double A three oh seven oh two, the WhatsApp line oh seven two, seven oh two and seven oh two. So we've touched on some of the players in the industry. We've also touched on when debt is handed over at what point now does in the process and in this ecosystem, what are the rules and is it client specific as to at what point do you say we can't recover or you know, does your clients say you have three months to solve this elsewhere handling it like, how does that whole part of the process work before it needs to be at the next part, which is handing over to the courts.
00:22:09
Speaker 3: Well, I think that that really depends on the credit provider or the client, what they do, and other factors that play are all is the size of the debt, the age of the debt. So it's quite it's quite. It could be quite intricate. However, majority ofly, you know, you you take it through a stage of notices, so you know, you get a formal notice. Would it be a notice or a section one twenty nine which is a letter that states that we afford you twenty one days to pay, and then if you don't pay within twenty twenty one days, it could adversely affect your credit record, which you could for example list someone on the credit bureau you're blacklisting, or then you know, take it further.
00:22:53
Speaker 1: So this process, that letter is that before you do the phishing expedition, that as in, does the letter go when the thing is handed over or does that go after you've established that this email is working, we've got the right person, blah blah blah.
00:23:11
Speaker 3: Well, usually it depends on campaigns. Usually we send that out like in bulk, and you know, then we send our telephone call campaigns you know, and speak to everybody as well. We send out formal legal you know, just handover notices as well via SMAs and you know VI via email to say like listen, we you've been handed over and you know we administering this case. We're acting on behalf of this client and you know, just as a notice, so that will be your first communication. And then what we would do is we would send out the letter and the company and buy a telephone call usually at the same time. If we would not get hold of the person you know, at the specific point in time, then we would send out the letter and you know, a notice for you know to call us as well, because legally you have to send out this notice, you know, to proceed to further possible state you have to formerly in writing notify the person of the debt and you know and read them their rights as well. You know, you have a right to approach a dead counselor you you have the right to dispute the account. You have the right to make an arrangement which is acceptable. So there's specific things that needs to be in this letter according to South African legislation.
00:24:21
Speaker 2: So what happens if.
00:24:26
Speaker 1: The person you just don't get hold of them, does the twenty one days start counting?
00:24:31
Speaker 2: Or what happens?
00:24:32
Speaker 1: And I asked this, because let's assume the person didn't you didn't get hold of them. I'm in a situation where a former domestic worker had me as her reference on an account she got handed over, and I told them multiple times that she's died and given the family details that I could find. But it was probably on there from long ago, because long before she passed away, she was not longer no longer working for me.
00:25:01
Speaker 2: But I still see the SMS is now, and I said, well.
00:25:04
Speaker 1: There's nothing I can do about it of them still asking for this debt to be paid, So I'm assuming they haven't gotten hold of anybody. And it's still the time just keeps ticking away and the messages keep coming for this person that's handed over. Is there an internal process where I don't know, death certificates are checked, or an internal process where they say, guys, it's been three years and we haven't gotten hold of this person. We're writing it off like what happens, Because even for me, the dead collection comes with a reference, a number and whatever.
00:25:39
Speaker 2: I'll call, hey, guys, this person has died.
00:25:42
Speaker 1: I don't have the death certificate because I'm not the family, but I would assume something in your systems should be able to show you that this is not going to happen.
00:25:52
Speaker 3: Yeah, for sure. I mean what you're talking about is absolute language and some bad administration from a dead collector. Yeah, Like the moment that you understand that a person or even hear the word that a person has been deceased, you have you as a depth collectors have the right and access to consumer information through the information and credit bureaus, so you can run a trace on that person and confirm whether or not that person's deceased. But I mean there are there are you know, odd cases here and there, you know, where there's administration problems as well, you know, usually not, I mean, we don't really have problems with that. Like I don't even know of one case with us where we've found out that the person has been deceased and we've traced and the person has not been been deceased. Because if a person has deceased, home a phase you know, processes this information that the person is deceased, and the credit bureaus are directly linked linked with the with home affairs. So I mean this is this is more or less live information that they're getting. So in this case that you're having, you've you've been working with somebody that doesn't probably doesn't have you know. I mean it could be for a depth collector that they are not associated with one of the bureaus. But I find that highly unlike.
00:27:00
Speaker 1: But I so out of interesting the link between home affairs and that information. Is it to protect from fraud or was it so that you guys cannot chase off the people who are dead, because I would imagine that the moment somebody has deceased, everything needs to get frozen. Is that why there's a direct link to home affairs? No?
00:27:22
Speaker 3: No, well, I mean we we have access to a lot of information as well, you know, and this is this is to protect you know and uphold the law in South Africa. So we have access to contact details, possible other contact details, uh, home addresses, ID numbers, telephone numbers, property interests. So for example, if you own a house, it'll it could you know it would it would display there if you're a director at a company, you know other telephone linkages as well. So I mean you get a lot of information that is available to you as a debt collector, and you know, when you get a license to to handle this information. You can use this information to help to collect deb and I mean this this is this is a tool that helps us uphold you know, and assist creditors because I mean you're looking at creditors, you know, and credators pray play an important part in the South African economy. You know, they assist people to to ascertain goods, you know, on credit and then therese you know, there's a flowing economy through that. You know, when when people don't have bias confidence, you're looking at your economy falling. So they do play an integral part, you know. But these credators as well, you know, they they they you know, they need to to understand their cashal and monetor their risks as well, you know, so credators would use dep collectors to assist them with these because dep collectors have have infrastructures to do massive volumes of of of communication as well. So it's to protect the the the ecosystem of our economy and the tegral part of our economy, to ensure and to help that as much that gets paid as possible.
00:29:01
Speaker 1: All right, we need to take another break when we come back. I see your questions on the whatsap line O dodible one double a three oh seven oh two in the WhatsApp line oh seven two seven oh two and seven.
00:29:09
Speaker 2: O two Masterclass ten minutes two three o'clock.
00:29:15
Speaker 1: As we are continue with our masterclass on dead collection Businesses and Agencies O double one double a three oh seven oh two the WhatsApp line oh seven two seven oh two one seven two. We're with Steerfan Ferrera, CEO and co founder of Bridal Ferrera and uh, we are going to your question, so.
00:29:33
Speaker 2: Let me see hire le Brilla.
00:29:39
Speaker 1: It may be a side story, maybe more sort suited to a Ninja Noless situation or consumer rights journalist. But I've been getting a lot of calls to consolidate your debt which are really masquerading as dead relief traps. I did a deep dive and it is a proper scheme, and the call center agents become quite aggressive as they were confronted, saying that I elected to be on this system. This is from Robert in Houghton. Is that standard industry practice?
00:30:08
Speaker 3: I mean they you're looking at the debt consolidators debt what do they call themselves? A debt debt review.
00:30:16
Speaker 1: Like something like their counselors, counselors what I was looking for.
00:30:20
Speaker 3: Thank you, you get debt counselors, you know, and these guys have these guys are basically selling to you that they will you know, you can you can pay you can pay less money on your debt, and I mean that that's not the case, you know. And then you sign up with them and you need to pay them additional fees and all of these things. So now you're getting somebody to to consolidate your your your debt for you, your to counsel your debt for you. And what they do is they they break your debt up into into into every creditor and then they contact the creditors you know, and make arrangements, and then they go to court and they get like a court order so that you can't be you know, they can't take further legal action against you, you know. So I mean, like I guess in some cases it could be helpful as well, you know, if you have a debt collector that really wants to come after you and really hasn't tend to to, you know, to collect against you. But I mean, and in a vast majority of the cases, you know, if you as a consumer can speak to your debt collectors and really make proper arrangements and forthcoming and saying like, listen, I know like I'm in debt or I had the situation. Can I make an arrangement all these things? You know? Then then you know it could It could work as well. You don't need to go to a dead counsel or something to consolidate council to consolidate your debt. If you if you're own three or four, five, six, seven people, you can really with honest and open communication, you can do with yourself.
00:31:47
Speaker 2: All right.
00:31:47
Speaker 1: The next one says, I paid I paid Elite for multiple months by my previous sympt I'm not sure what the late is.
00:31:59
Speaker 2: So please can recent this.
00:32:00
Speaker 1: Message because I think it's going to change the context of the question that you're asking. Okay, please can you get clarity on the sale of dbate from one data to another hours arrested by a famous collection company for years, the data is paid and it just never decreases, In fact, it increases.
00:32:18
Speaker 2: This is from.
00:32:18
Speaker 3: Tim Well, you know debt that increases would really depend on the interest rate for the creative provider that you you are. You know that you are owing. So if you are, for example, you're owing two hundred thousand rand on your credit card and you're paying two hundred and a month, I mean, of course that's your interest rates or your interest accumulated into some of the account is going to be more. So, I mean that would be that. But if you if you think that things are fishy and strange, you know to do the account and you really want to understand that if these fees are legitimate, you are welcome to contact you look at your credit provider, look at your contract, and you can contact the National Credit Regulator to understand what is the right interest fees that can be charged, you know, on this specific account. And as well, if the depth collector is charging you specific fees, you can see if these fees are are in fact in accordance with the Annexure B of the Depth Collectors Act. So the dep collectors are allowed to charge a specific fee for example for telephone calls consultations. But these are not large fees, you know, these are small fees, so you know, unless you've been handed over to an attorney, which could be another case as well. You know, so really look at you know, your creditor and look at the legislation from the person collecting from you, because it's not only depth collectors that can collect in South Africa. Attorneys can do that as well. You know, their fees are substantially higher when it comes to it. But then again they also need a court order to collect these things from you, so you know, yeah, just look at the contract and you can speak to the National Careiod Regulator as well to see if all applicable fees are with in accordance with the law.
00:34:12
Speaker 1: All right, we've got your voice notes on seven two, seven o two and seven oh two.
00:34:16
Speaker 4: Could they real level here, Sebastian, yet, could you please ask your guests to explain the title of when an account has not been collected on prescription as they call it, and when can people stop collecting if you're telling your account has been prescribed and they keep phoning and keep poning because you haven't acknowledged the debt, but they keep phoning. Sebastian, your thanks, have a great day, by thank.
00:34:45
Speaker 2: You, Sebastian.
00:34:48
Speaker 3: Yebastian. Yeah, according to South African legislation, debt automatically prescribes after three years, so unless that you've made a payment on that account within the next three years. Then there's another period of three the years that you can legally collect on that. Another thing that stops prescription or prelong subscription is is if you've acknowledged it in some way, you know that that you are out. So I mean if the data is within three years, they cannot legally collect from you.
00:35:21
Speaker 1: So yeah, all right, now the voice notes.
00:35:25
Speaker 3: I've got a question for the debt collector.
00:35:28
Speaker 4: Any business is allowed to invest the services of debt collection or do you have to be a national credit provider?
00:35:36
Speaker 3: Thank you? Now, I mean any business can can do debt collection. You don't need to be a credit provider. You need to be registered with the Council for Debt Collectors. So I mean not all debt in South Africa comes from credit providers. You get incidental credit. This is for example, you know, you go to the doctor and uh, you know, you get your teeth fixed and they the medical pays out a portion and then there is a portion that is not not not covered. No, this is this is not the doctor is not credit provider, the doctor. This is incidental credit. It wasn't intended to be credit, but the credit you know, and the loop in the in the in the in the business model you know, ends up in you know, debt being created, you know, which is basically created, so they become a creditor.
00:36:25
Speaker 2: Is that why.
00:36:25
Speaker 1: Some some doctors and hospitals will expect the payment to be done before the procedure.
00:36:31
Speaker 3: Oh yeah, that's that's a growing trend.
00:36:33
Speaker 1: Yeah, yeah, all right, we are going to have to leave it there, folks, if you are worried about so many of your other questions. So a person is saying if they haven't touched the debt of the five years, you're saying it's three years, then it's rich of But what Wendy did adviser is if you acknowledge, if you answer the phone and say yes, this and this has happened, the three years is over. So the acknowledgment part is what can kick it back and.
00:36:57
Speaker 2: Not even a payment. Yeah, we have a lot to learn.
00:37:02
Speaker 1: Sia Fan, thank you so so much for coming through, and I do hope we can have more conversations like this again, because it does sound like an industry where they are, like you say, loopholes for being unethical and.
00:37:16
Speaker 2: Other types of things.
00:37:17
Speaker 1: But it really really helps just empower us having these kinds of conversations.
00:37:21
Speaker 3: Thank you so much, thank you
