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Low-income earners who are unable to keep up their debt repayments seek the help of debt administrators to reschedule their repayments to affordable levels. But a lawyer has found that most of these administrators are exploiting the people they are supposed to be helping and trapping them further in debt. Administrators are charging fees of about 23 percent to 50 percent of the amounts they collect, while they may legally take a maximum fee of 12,5 percent.
lawyer Eduan Matthee, who has been taking on debt administrators that are over-charging, started his own debt administration company. He says debtors often do not see these liquidation accounts. Thus they have no idea where they are in the cycle of repaying their debts.
Five years ago, the Banking Council commissioned independent auditors to research 20 large debt administration companies.
Matthee says all he has succeeded in doing by taking to court administrators who charge more than 12,5 percent of the amounts they collect is removing a single client from that administrator. The administrator is free to continue charging its other clients more than 12,5 percent, although found unfit to be an administrator in one case, is appointed soon after as an administrator in another case, Matthee says.
Kathleen
2 opmerkingen:
It's typical for people to take advantage of the weaker one's. But I do not understand how they can do such a things while the people don't notice it. If you search for help and than you realise that you lose even more money, than you must know that there is something not right about it.
Els
I find it scandalous that people thake advantage of people who already have big financial problems. Those who are in debt don't have many choices, so they think that they have found an answer to their problems, while in fact their cases are getting even worse than they were before. The government should me more stict and take measures to go against this phenomenon.
Laura
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