As 2023 winds down, we at VHT Attorneys reflect on a year marked not just by challenges but by our commitment to rebalance justice in the evolving landscape of debt review in South Africa.
It has become clear that the consumer credit industry is evolving and will continue to do so in response to economic changes, legislative developments and shifting consumer behaviour.
We wish to highlight some of the developments in the debt review industry this past year, such as the integration and development of technological systems, emerging court trends, the process, and different opinions on entering and exiting debt review as well as some of the interesting cases that VHT Attorneys has been involved in throughout the year.
1. Technological Integration
A noteworthy aspect that VHT Attorneys has traversed in the 2023 debt review landscape is the increased focus on technological integration. We’ve witnessed a significant shift in how consumers engage with their financial health, largely due to the development of systems that provide easy access to credit data and credit scores. This advancement has revolutionised consumer awareness, making them more informed and educated about their financial standings.
Furthermore, recognising the need for clear, consistent communication, we established a dedicated Consumer Communication Department. This specialised team focuses solely on liaising with consumers regarding their debt review legal applications to court. In 2023 alone, this department sent out over 25,000 WhatsApp messages, a testament to our commitment to maintaining open lines of communication. This initiative has been pivotal in updating consumers, answering their queries, and guiding them through the debt review process. Our aim is to demystify the legal proceedings and ensure that our clients feel supported and informed every step of the way.
Through these technological and communicative advancements, VHT Attorneys is not just streamlining legal processes; we are reshaping the way consumers interact with the legal system, making it more accessible, transparent, and user-friendly.
2. Court trends for 2023
In 2023, our statistics show that VHT’s reach across South Africa has been wide- ranging. Our involvement in matters across an impressive 491 courts countrywide signifies our scale and commitment to client service. This extensive presence reflects our engagement in a significant number of cases.
Throughout the year, we’ve observed and adapted to emerging court trends. A key development has been the court’s increasingly stringent approach, particularly regarding the need for updated documents and accuracy from the first court appearance. Many courts are now moving away from allowing multiple postponements in cases where consumers have been slow to providing necessary information.
Additionally, we’ve noted a trend where some courts require the filing of a confirmatory or consumer affidavit before allocating a hearing date. As the courts increasingly emphasize timely resolution of cases, it’s becoming crucial for consumer to adopt a proactive approach. Prompt and engaged participation are essential to prevent the dismissal of cases or the unfortunate necessity for debt counselors to instruct attorneys to withdraw court applications.
To address these evolving demands, VHT Attorneys has established a dedicated team as mentioned earlier, focused on enhancing communication between our offices and our clients. This team is committed to ensuring that all necessary documents are obtained promptly and that each matter is thoroughly prepared for court.
3. Addressing challenges with the National Credit Regulator
The NCR’s Stance and Its Implications
Recently, the National Credit Regulator (NCR) has been once again vocal about its views on legal fees and the role of attorneys in the debt review process. The NCR suggests that debt review applications with full consent from credit providers should be directly referred to the National Consumer Tribunal (NCT) for consent orders, bypassing attorney oversight.
This approach raises concerns, as it could leave room for credit providers to challenge debt review applications at critical junctures, potentially leaving consumers vulnerable.
The Question of Legal Fees and Regulatory Jurisdiction
While it’s true that excluding legal practitioners might reduce fees for consumers, the broader implications of such a move are concerning. This raises the question of whether the NCR is overstepping its authority, given that the regulation of legal fees is typically within the purview of the Legal Practice Council.
Furthermore, this could potentially open avenues for some credit providers to exploit the system, undermining the intent of the National Credit Act and the debt review process.
Trends Observed and the Need for Legal Involvement
Over the past year, our firm has observed a worrying trend:
Certain credit providers adopting an inflexible approach, resisting meaningful engagement in the negotiation process as outlined in the National Credit Act.
This not only disrupts the process but also underscores the necessity for attorney involvement, ironically counteracting the NCR’s intended changes.
Unanswered Questions and Future Considerations
In light of the anticipated amendments and proposed changes, a multitude of critical questions linger, underscoring the complexities of the evolving debt review landscape. One pressing concern is the position of a consumer facing a credit provider’s termination claim in the sixth month of the debt review process, especially when their debt restructuring proposal is awaiting confirmation as a consent order at the NCT.
In such scenarios, the withdrawal of the application seems inevitable, but this raises further issues. How should a debt counsellor fund the court application under these circumstances? Is it necessary to allocate a portion of the distributable amount towards legal expenses from this stage onward?
Moreover, if the amounts received are less than previously agreed upon, does this open the door for all credit providers to opt for termination? These unresolved issues highlight the complexities of the evolving debt review landscape and the critical role of legal guidance in navigating them.
4. Exiting Debt Review
In 2023, VHT Attorneys achieved a remarkable milestone: a 100% success rate in assisting consumers to successfully exit the debt review process. Exiting debt review marks a significant achievement for consumers, symbolising their regained control over financial matters and a return to financial stability. Our firm takes immense pride in this accomplishment, as it reflects our commitment to supporting consumers in reclaiming their financial independence and confidently re-entering the credit market.
However, we have observed an alarming trend among some legal practices and service providers…
There is a growing practice of attempting to prematurely remove consumers from debt review.
This often involves submitting applications to rescind past Tribunal rulings, aimed at lifting debt review flags from consumer credit reports.
While this may appear as an attractive shortcut for consumers eager to re-access the credit market, especially in the current economic climate, it presents significant risks.
5. Interesting Cases
Throughout the past year, VHT Attorneys has encountered a diverse range of unconventional cases that we have been entrusted to handle.Our engagements have encompassed a spectrum of legal issues, including navigating copyright infringements, delving into the intricacies of suretyship and debt review, and exploring the legal landscape surrounding credit life policies within the insurance framework to name but a few.
One of the most rewarding aspects of our work this year has been representing a diverse array of clients, ranging from large corporate entities to individual consumers taking on major financial institutions. Our commitment to going the extra mile for our clients is evident in our unwavering dedication to their causes.
Whether it’s navigating the intricacies of corporate litigation for a large conglomerate or providing personalized legal counsel to an individual challenging a financial giant, our firm stands as a beacon of support and advocacy. Our approach remains distinctly unconventional and creative, ensuring that we bring innovative solutions to the table while addressing the unique needs of those we serve.
Embracing Change and Continuing Excellence into the Future
As we stand at the cusp of a new year, we at VHT Attorneys are acutely aware of the ongoing economic challenges facing South Africa. In an ever-changing legal and financial landscape, the role of debt review and legal services becomes increasingly pivotal.
We recognize that as these dynamics shift, so too must our strategies and approaches to effectively meet the evolving needs of both consumers and our clients. Our firm takes pride in its ability to navigate this ever-evolving landscape with agility and foresight. We approach each case with a fresh perspective, understanding that no two situations are the same and that each client deserves a solution crafted specifically for their unique circumstances.
This innovative and client-centred approach not only distinguishes us but also drives us to develop bespoke solutions that truly address the individual needs of those we serve.
Reflecting on the successes and challenges of the past year, we are inspired to continue this trajectory. Looking forward, we are committed to building upon the momentum we have gained, continuing to deliver outstanding legal services. We eagerly anticipate the opportunity to face and adapt to the dynamic legal challenges ahead, always striving to uphold the highest standards of service and advocacy for our clients.
In doing so, we remain dedicated to contributing positively to the legal landscape of South Africa, fostering justice and equity in every endeavour.
