The thing which really gets me about telesales calls is the power imbalance. The caller, the telesales agent, holds most of the power, in that they have a carefully worded script, along with your name and other personal details, and they’re recording every word you say.
You, on the other hand, have been ambushed — called up out of the blue by a stranger who is trying to sell you something — and you don’t know anything about them. And when you end that call, you have no record of what was said and agreed to, or not.
If you agree to the deal by saying yes in the appropriate place, even if the crucial question is intentionally vague, as in “May we send you a welcome pack?”, it’s legally binding. But there’s a good chance that you won’t know what you’ve got yourself into. You need a recording of the phone call for that, and gaining access to it is often made very difficult, because they’re not keen for you to have it. The only easy “out” to be had is within five business days of agreeing to a cellphone deal over the phone — or any other form of direct marketing.
This “cooling off period”, in terms of the Consumer Protection Act, requires you to cancel in writing, and you don’t have to provide any reason for doing so. But often the telesales target only realises that they really, really want to be free of the deal when that cooling-off window has been slammed shut.
Enter Naeem, a self-employed resident of Cyrildene, Johannesburg. He is not over-indebted, but he was talked into agreeing to going under debt review anyway by someone who called him in December from a Durban-based debt counselling company called Debt Mate.
Don’t be bullied into agreeing during that call — that’s always a red flag.
Debt counselling was introduced in the National Credit Act back in 2007, as a debt relief measure intended to help over-indebted consumers struggling to keep up with repayment commitments. Debts are restructured by the debt counsellor in a negotiation process with the creditors — reduced interest, among other measures — leading to a single amount which the person under debt review must pay monthly to an appointed agent, who then divides it up between the various creditors for however many months or years it takes to pay all the debts off.
And during that time the creditors can’t take any legal action against you. As long as you pay according to the agreement. So the Debt Mate caller told Naeem that the company could offer him some relief on his bond, car loan, retail store accounts and other loans by reducing the amount of interest he’s paying “by 30 to 50%”. He said the word “over-indebted” once or twice, but never directly in relation to Naeem’s situation.
Not once was Naeem asked if he was over-indebted, or whether he was battling to honour his monthly repayment obligations, or was in arrears.
More importantly, he was never told, in the course of the half-hour conversation, that going under debt review meant he wouldn’t be able to get any new credit until all his debts were cleared.
The truth is Naeem is perfectly able to pay what he owes his creditors. In fact, he revealed to the Debt Mate guy that he settles his credit card balance in full every month; hardly the behaviour of someone drowning in debt. Naeem thought he was agreeing to have his credit agreements restructured to reduce his interest rates; that’s it.
By the time he found out what going under debt review entails, he was committed to the process; his credit card account had been frozen and all his debit orders stopped.
When he tried to back out of the process, Debt Mate told him that would cost him a cancellation fee of R6,750. He claimed he’d been misled, and asked for the call recording, which he was sent via e-mail — a thumbs-up to the company for that, but it didn’t help Naeem. His misrepresentation claim was ignored.
I took up the case with Debt Mate’s Sudeer Joseph, who was registered with the National Credit Regulator as the company’s debt counsellor in October 2019. I asked if he conceded that his agent had misled Naeem, in that he did not make the nature and purpose of going under debt review crystal clear to him; he did not establish whether he was over-indebted, and he did not disclose that while under debt review, no further credit could be obtained.
Responding, Joseph said Naeem had been referred to the Ts and Cs of debt review on his company’s website, which doesn’t excuse the lack of disclosure during that long sales call.
Given Naeem’s earnings and expenses, he said, “my staff member may have thought he was over-indebted”.
Assumption doesn’t cut it here — Naeem’s presumed over-indebtedness was never discussed, nor whether he had other forms of income, which he does.
But Joseph undertook to refund Naeem the R6,750 cancellation fee and to look at rewording the company’s sales script.
As always, be VERY wary when phoned out of the blue and offered some kind of deal.
If it sounds promising, make sure to say, for the recording, that you are not agreeing to anything on the spot: you want to see the offer in writing and do some research first.
Don’t be bullied into agreeing during that call — that’s always a red flag.
And remember, if you did agree to a direct marketing deal on the phone, you have a five business day cooling off period in which to cancel for no penalty.
CONTACT WENDY:
E-mail: consumer@knowler.co.za
Twitter: @wendyknowlerFacebook: wendyknowlerconsumer
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