Nicky Lala Mohan Credit Ombud - PowerPoint Presentation

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Nicky Lala MohanCredit OmbudPresentation to the Select Committee on Finance National Council of Provinces (NCOP)14 February 2017

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Mission Statement and ValuesIntroduction to the Office of the Credit OmbudBackground & What we do StatisticsComplaint TrendsWhat are the challenges for consumersAreas of greatest concern & how should industry address these issues

Agenda

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The Credit Ombud Will:Effectively resolve disputes between members of the credit industry and credit receivers (consumers and businesses) with regard to credit and credit information matters.Act as an educator of the public in matters pertaining to the credit industry.At all times act honestly, independently and fairly; balancing the rights of all parties.Mission Statement and Values

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ValuesFairWe will act in the best interests of all parties, taking both sides into consideration and considering the merits of each case carefully.Independent We will not take sides and will remain impartial at all times. No individual or organisation will be in a position to unduly influence us.

HonestWe will openly deal with any issues brought before us, asking the relevant questions and communicating clearly and transparently.

Mission Statement and Values

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Voluntary association of members to provide independent, fair, fast and cost effective dispute resolutionIt is an alternative to the CourtsIt is NOT a formal, legalistic approachFree to consumersConstitution and Terms of ReferenceAccountable to an Independent Council Quarterly Council meetings as well as Council subcommittee meetings for HR; Finance, Risk and Compliance and Corporate Governance Introduction to the Office of the Credit

Ombud

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Consumer BodiesWoman's National Coalition SA National Consumer Union Black Sash Independent Members

Siva Naidoo – Consumer ActivistTefo Raditapole - Attorney

Thuli

Zungu - JournalistPatricia McCracken - JournalistHassen Lorgat – Consumer Activist

Credit ConstituencyBanking AssociationConsumer Goods Council

South African Credit and Risk Reporting AssociationNational Clothing Retail FederationMotor Vehicle Finance AssociationMicro Finance South AfricaCredit Bureau AssociationNon Bank Large Lenders Association

CO

Council

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The Credit Ombud is a “Ombud with Jurisdiction” in terms of the Financial Services Ombud Schemes Act The Credit Ombud is a registered Public Benefit Organisation with SARSCredit information operations started in 2004 focusing only on credit bureau information disputes. Since 2012 we also accept non-bank credit complaints.We also act as an educator of the public in matters pertaining to the credit industry

Background of the CO & What we do

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At the CO’s sole discretion to determine whether complaint falls within its jurisdictionAct independently and objectivelyHave regard to fairness, justice and equityBalance the rights of consumers on the one hand and the rights of subscribing members on the other handMembers are bound by decisionsConsumers are not bound by decisions and can take further legal action or report to NCR (Regulator)Terms of Reference

& Jurisdiction

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Summary of Statistics - 2016

Complaints &

Enquiries

14 343

Disputes

Opened4 123

Calls to Call Centre

32 095

Amounts

Saved

For consumers

R 10.6 million

Average days

to close

52.47 days

Media Equivalent

Advertising Value

R 25.1 million

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Issues around statements of account, e.g. incorrect/disputed balances, payments not reflecting, disagreements over interest charges;Incorrect information reflecting on credit bureaus;Service issues e.g. copies of documents, paid-up letters;Emolument attachment orders- issues include consumers unable to obtain statements of account, balances, overcharging of interest (in duplum) and NB non-compliance with procedural requirements;Prescribed debt.Complaint Trends

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Too many consumers do not know:Their rights in relation to credit agreementsWhere to turn when they experience financial difficultiesHow to budget or handle their financial affairs to their benefitThe legal implications of the contracts that they signCo-ordinated financial education for consumers from a young ageBetter information and explanations provided at time of contractingOngoing communication & building relationships with clients so that they know where to turn when in trouble

Challenges/Areas of concern & how to address same

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More should be done to assist consumers with historical debt problems to rehabilitate themselves,More education to assist all consumers to become financially independent e.g.Assisting consumers to save/invest rather than using creditFinancial educationGeneral financial counselling for consumers in needAppropriate and affordable debt consolidationAffordable settlements on accounts in debt collectionEfforts to curb the escalation of a debt due to high interest and legal fees

How to address the problems

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Thank you

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