News in South Africa 2nd August:
1. Visa processing delayed:
Visa processing delays are frustrating South Africans who are looking to travel abroad, with appointments for interviews with the United States (US) consulate only available from February 2023.
“Visa availability continues to be a struggle for travellers,” warned corporate and online travel management company Rennies BCD Travel in a notice to clients on Friday.
A massive backlog of visa applications, emanating from the pandemic-induced lockdown, which effectively halted travel and closed embassies, coupled with a resurgence of international movement in the past six months, has led to longer processing times. Like the airports experiencing chaos amid Europe’s summer holiday, staffing deficits are also impacting embassies.
Back in January, VFS Global, the world’s largest visa outsourcing firm, confirmed longer waiting times and limited appointment slots. The US warned “that it may take several months to schedule an interview appointment”, while the UK High Commission in Pretoria, in May, confirmed “longer processing times” and urged travellers to “apply in good time”.
Visa appointment and processing times for some European destinations, like Austria, Denmark, Italy, and Spain, range from two weeks to six weeks. Although Germany is taking appointments in August, the total processing time listed by Rennies is up to four weeks, while the earliest date for an appointment with the Dutch embassy in Pretoria is 1 September.
Wait times for an appointment for those wishing to travel to the UK aren’t as long – estimated between one and two weeks according to Rennies – but the processing time could take up to two months.
The long wait for US visa appointments cited by Rennies is confirmed by the US department of consular affairs. Getting an appointment for a visitor visa in Johannesburg is estimated to take 240 days, or eight months, while the waiting period for “all other non-immigrant visas” is marginally shorter, at 210 days.
There may, however, be some relief for those who’ve had a US visa in the past.
“If you have had a previous USA visa that expired in the last 48 months, you may qualify for an ‘appointment waiver’. This option takes anything from four to 12 weeks to be returned,” explained Rennies.
“There is no option for an earlier appointment unless the traveller has a compassionate case or can demonstrate an urgent or compelling need for business travel.”
2. Medical aid price increase cap:
The Council for Medical Schemes (CMS) recommends that increases to medical aid contributions for 2023 stay at or below inflation (5.7%).
The association’s latest circular found that in the context of the current economic climate – characterised by surging inflation and a rising interest rate – above inflationary contribution increases are simply unaffordable for most members of medical schemes.
The proposed 5.7% increase follows a 4.2% recommendation for 2022.
The CMS is a statutory body established by South African legislation. It provides set requirements that must be adhered to by medical schemes when determining annual medical scheme contribution increases and benefit changes for the 2023 benefit year.
To estimate price increases in the health sector, the CMS relies on the consumer price index (CPI), as South Africa does not have an official medical price index, said the CMS.
According to the latest inflation forecast of the SARB, as outlined in the July Monetary Policy Statement (MPC), headline inflation is expected to average 5.7% in 2023 before moderating to 4.7% in 2024.
“While the CMS encourages the industry to implement contribution increases that are affordable to members, CMS is also cognisant that due to unique industry-specific cost-push factors such as the impact of the weaker rand exchange rate, the burden of diseases, etc., some schemes may require contribution increases above inflation,” said the CMS.
The CMS requires schemes to approach the council for approval. If an increase greater than 5.7% is proposed by a scheme, then the council will need to be provided with adequate reasoning as to why.
3. Banks collecting expired debts:
One would think the banks would know what debts they are legally entitled to claim, and those they are not. But apparently many of them are still collecting on debts they are not legally entitled to – known as prescription debt.
Most consumer debt lies in contractual credit agreements such as gym memberships, store accounts, overdrafts, personal loans, payday loans and cellphone contracts.
If, as explained by Debt Rescue here, the credit provider has made no effort to secure payment, communicate with the client, or take legal action, the money owed becomes prescribed debt; it is regarded as having expired and can be legally written off.
It’s important to note that legal action can be served even if the person has not physically received notification of such action being taken; this can happen if, for example, a person changes their address and neglects to update their details with the credit provider.
Between January 2021 and July 2022, the OBS received and investigated a total of 193 complaints relating to allegations of collections on prescribed debts by banks, resulting in more than R1 million being written off or repaid to complainants.
The OBS says it received 118 complaints in 2021, about a third of which involved banks flouting the law by collecting or attempting to collect on prescribed debts.
“In 2022, the OBS has to date received 75 of these matters. In 29% of these cases, banks have again been found to have transgressed the Prescription Act as well as the NCA [National Credit Act]”, says Steyn.
She adds that as recently as last week, an amount of R216 197 (the outstanding balance) was written off in one case and the complainant was also refunded the R3 200 which he had paid towards the prescribed debt.
Is it legal or illegal for creditors to collect on a prescribed debt?
This depends on whether the debt falls under the NCA or not. Credit agreements falling under the NCA include overdrafts, mortgage loans, personal loans, credit card debt and vehicle finance agreements.
If you default and do not acknowledge the debt for three years, this debt is prescribed. Your correct response to anyone phoning you for a prescribed debt is: “What are you doing phoning me for a debt you know is prescribed? What you are doing is illegal and I will report you and your company to the Banking Ombud.” Put down the phone without any further discussion. And then file a report with the Banking Ombud.
Prescription was written into the NCA, making it illegal for banks and other creditors to collect or sell a debt that has prescribed. That was a big leap forward for consumers, since this meant debtors no longer had to be aware of the law of prescription, nor did they have to raise this as a defence to be absolved from paying old debts.
“It is important for consumers to be aware of the fact that once they have acknowledged owing the debt, even if they have not made payment, they will not be able to successfully raise the defence of prescription in court should they be sued by creditors on prescribed debts,” says Steyn.
4. Department of Defense in disarray:
South Africa’s Department of Defence is in such a mess that contracts worth hundreds of millions of rands cannot be properly audited, and compliance with procurement laws is in serious question.
Making matters worse, in 90 of the completed 122 investigations into alleged fraud in the past financial year, no appropriate action was taken as per the recommendations of the investigations.
R8.5 billion worth of fruitless and wasteful expenditure wasn’t even investigated.
5. Energy plan for Eskom:
President Cyril Ramaphosa’s energy plan, which embraces the private sector in resolving South Africa’s perennial electricity crisis, is set to add nearly 2,000 megawatts (MW) over the next three months, which is not enough to make a dent in or alleviate crippling bouts of Eskom power cuts.
At worst, Eskom faces a shortage of up to 6,000MW of electricity as many of its creaking power stations are susceptible to breakdowns – as seen in early July when rolling blackouts were pushed up to Stage 6 due to workers of the power utility downing tools.
The interventions made by Ramaphosa to deregulate the energy sector and include the private sector to play a major role in ending the 14-year-old electricity crisis are set to yield an energy supply of about 1,950MW in the next three months. This, arguably, still creates an energy supply shortfall of about 4,000MW (on the worst days of power cuts), placing South Africa in the precarious position of facing further bouts of rolling blackouts that cripple the economy and stunt investment potential.
Most of the energy interventions proposed by Ramaphosa are likely to start making a dent in rolling blackouts by 2023, implying that they are here to stay for another 12 months.