More consumers accuse debt collectors of cheating

The number of consumers who have accused CA Schoeman Administrators of pocketing their money instead of paying their creditors is on the rise.

The number of consumers who have accused CA Schoeman Administrators of pocketing their money instead of paying their creditors is on the rise.

Three weeks ago Consumer Line wrote about two readers who claimed that the debt administrator had not paid their creditors in spite of having debited their monthly salaries since 2002.

Now Thoko Vilakazi, Angeline Ngetsane and Abigail Yonke also claim to be victims of CA Schoeman Administrators.

The women said that, collectively, R109000 was deducted from their salaries to pay their creditors, but the creditors claim they received no money.

Vilakazi said she suspects that someone at Pikitup, the employer, might have pocketed some of the money instead of forwarding it to CA Schoeman.

Ngetsane's pay-slip shows a R500 debit order to the adminis- trators, but the company could not trace her on its system.

The company asked for proof, which we faxed to the administrator.

Yonke owed creditors R35000, she has paid R46800 since 2005 and was shocked to find that she still owes R20000.

Leigh-Ann James of CA Schoeman Administrators said the company does not have Ngetsane on its system.

James acknowledged receipt of Vilakazi's money since March 2004, not 2002.

"During those two years the client enjoyed the protection of being under administration, but made no payments.

"Interest also accrued on the outstanding debt," said James.

"Since receiving payments, regular and prompt distributions were made to the creditors."

In the meantime the company has asked Margaret Matibidi and Thandeka Soko, who paid R26000 and R24000 respectively, to visit their offices to resolve their queries.

The women complained that CA Schoeman had not paid their creditors since 2001.

Soko has paid her debt, but the company still debits her salary.

Bonny Sago of Pikitup undertook to investigate why a portion of Vilakazi's money had not reached the administrators. She would also investigate what happened to Ngetsane's money.

Tips to remember

l Consumers in debt place themselves under administration because they are led to believe that they will have more cash to spare and no more letters of demand from creditors.

They are told that creditors cannot make direct deductions or demand any payments from them. But they are not told that they may end up paying much more than they believe.

For example, for the last five years, Matibidi paid R400 a month totalling R26800 - more

than double of what she owed.

Her creditors have not received a cent from CA Schoeman.

l Administrators charge a fee for court application which could be as much as R3500.

l Administrators deduct this amount before paying the creditors.

l The administrator also takes a commission on the money received before paying the creditors.

l Though the law says that an administrator may only charge 10percent, many administrators charge more.

l The administration order does not replace the original contract signed with creditors.

l Interest continues to be charged on all unpaid accounts. As a result of this, Vilakazi's balance of R15000 increased because of the interest that had accumulated. It included the interest for the year that the administrator collected from Vilakazi, but paid nothing to her creditors.

l Most administrators do not issue statements of account.

l Ask for copies of all distribution accounts in your file.

l Check with your creditors if they have received payment from the administrator.

For more information, call the National Credit Regulator on 086-062-7627.