South Africans are being urged to stay alert as a worrying financial scam continues to target unsuspecting consumers. The National Automobile Dealers' Association (NADA) has highlighted a sharp rise in unsolicited offers promising debt relief that could leave people trapped in debt review.
According to Brandon Cohen, NADA Chairperson: 'South Africans are increasingly receiving unsolicited calls from organisations offering debt relief services. By participating in a brief survey and answering a series of questions with a simple 'yes', consumers may find themselves enrolled in a debt-review programme without giving explicit consent.'
Debt review is intended to assist those who are over-indebted, involving debt counsellors who assess finances and negotiate with creditors. However, Cohen warns: 'The debt review programme, once approved, becomes a court order to which the applicant must adhere until debts are fully settled.'
This process can take years and prevents consumers from accessing any new credit. Even after completion, a debt review note on a credit report can affect affordability of future finance.
NADA has seen a surge in vehicle finance rejections for applicants under debt review. Cohen advises consumers to 'ensure that debt review is the right option by conducting independent research and only make use of the services of registered debt counsellors with a proven positive track record.'
He also suggests using caller identification apps to block unwanted calls and being cautious about what you agree to. 'Do not consent to anything you do not fully understand and until you have had a chance to think about it,' he adds.
