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28 March 2024

Why Remedial is the best solution for those facing a debt-crisis

Theda Muller

Published
By Theda Muller

I’ve been quiet for a few weeks as I’ve been reviewing the debt-crisis situation with retail and SME customers and I can truly say nothing much has changed and why is that?

1. Many customer’s remedial requests for consolidations and/or restructures final outcome is delayed for weeks and in many cases, months with nobody taking responsibility for the initial request, no follow-up or feedback and no closure, negative or positive, regardless.

2. Finally after waiting for 6months or more, we escalate the case to senior management and we are informed that we are overstepping the line. Really?

Since when is continuous service for improvement unacceptable due to hierarchical status?

Everyone in any organization serving customers have an obligation to fully support those customers, to find a solution if the customer has approached them and requested the same.

As a remedial company we are shocked at such responses because firstly, our approach is not personal, it is purely a mediation process to ensure the customer is supported, avoids legal action and can repay their debt with peace of mind.

3. Even after customers have requested remedial consideration, they are requested to pay a ‘down-payment’ as a condition of approval where in some cases, once this is done, the case is allocated to another representative, mostly collections, and then new demands are the order of the day and the old promise has disappeared, with no recourse for the customer.

4. Customers are informed that ‘their DBR (Debt Burden Ratio) is too high for restructure or consolidation ‘and the question is who requests remedial with the normal 50-55% DBR?

I doubt anyone who can comfortably repay their EMI’s (Equated Monthly Installments) will be queuing up for remedial services as they don’t need it!

But the customers who are struggling regardless of whether the situation is self-inflicted or not, is turned away, so he/she continues their default pattern and finally, they must face legal.

So creditors are asking ‘How can we help? What mistakes did we make? What are the solutions?’ Very clearly, some have missed the boat and continues to do so.
I think the solution is crystal clear, it’s not rocket science.

5. Many customers who requested remedial consideration as long as January 2016 and who have not received any solution from their creditors, have now been terminated from their employment, so I would like to know what the solution is now.

Who is actually to blame for the creditors sincerely not being able to meet their original high EMI’s when just maybe, they could be in a position now to meet those intended reduced EMI’s?

Sad story I know, but it is realism and many of these creditors are not listening, their only intention is to achieve collection targets when very few have actually comprehended that by applying softer skills and techniques, you can secure your payments quicker than what you realise.

6. I heard feedback last week on a creditor informing me that they have now applied a very high interest rate for remedial because previously, debtors were afforded a lower interest rate, but again defaulted. Did anyone bother to inquire why or are they too busy bashing debtors for payments they are unable to meet?

Let me tell you why….. One plus one actually makes two….

A. When a debtor approaches your organization, their creditors for a remedial solution, then do not just assume that once you approve their request that they can actually afford that newly restructured EMI, even if it was reduced by 50%.

B. The reason is that in spite of many debtors being grateful for that specific remedial approval, the realism is they have 10-20 other possible debts, also in default for the same reason, the EMI is too high and therefore the DBR is way over the regulated 50-55%. So it is nearly impossible for them to meet your EMI.

C. This brings me to my next point, i.e. creditor collections representatives and middle management trying to convince debtors that they do not have to go to external remedial companies for help, they should come directly to them. Really?

So kindly advise me how you will resolve the customers other remedial requirements which are mostly very urgent.

D. Why is it necessary for collection employees and representatives to attempt to tarnish the name and reputation of a remedial company, when they are incapable of doing the job?

Not everyone is in business to just levy fees to customers as it is very obvious that customers facing a debt-crisis cannot afford to pay high fees to anyone, if that was the case, they could repay their debt.

It is best to concentrate on your job than perturb yourself about what other companies are doing as you have a responsibility towards your customer if he is standing in front of you.

There is no time for ego’s or personal opinions as your delay could mean the difference of life or destruction for the debtor because it’s not about you, actually, it’s about:

1. You serving the customer to the best of your ability with the outcome being a realistic amicable solution.

2. You protecting your organzation’s assets.

3. Protecting the growth and profitability of your organization and therefore;

4. Protecting and retaining your job; and;

5. Positively contributing to the country’s economy.

So I am baffled that collections employees take this personally as we are not in the personal business but in the business of serving communities to recover from a debt-crisis. In turn we all continue to work and live together in harmony, which is why we are here.

Therefore, for what it’s worth, remedial is the only solution from hereon.