Legal Insurance for Namibians

First printed in Consumer News Namibia magazine - Feb 2013 edition

The cost of taking legal action can be prohibitive. Could you afford to claim compensation if you were injured in an accident, unfairly dismissed from work or had a dispute with a business?

A friend of mine has had legal insurance for the past three years and believed he was covered. About a month ago, he was accused of being involved in a theft syndicate at his work. He immediately called his legal insurance company, but was informed they do not cover criminal cases. He was taken for a polygraph test (is that even legal in Namibia?), and informed that he had failed the test. This led to him leaving the job that morning to go speak to his legal insurer.

An guess what the legal insurance company tells him? They inform him they do not cover the expenses for a labour case either.

WHAT is it with insurance companies that do not want to pay claims? If you complain at NAMFISA they can do very little to help.

If I am going to buy legal insurance I expect:

Bail Assistance

•         Bail negotiations and applications on members’ behalf

•         Depositing of the bail amount/issuing of bail guarantee on behalf of arrested member

In other words, I must know that if I a accused of a crime that I have instant legal assistance when I am arrested and the legal representative shall do everything in their power to have me released on bail. In addition, my legal insurance will cover a ceratin amount – for example bail up to N$10,000.

Civil Law

•         Bank and insurance matters

•         Blacklisting

•         Building and construction matters

•         Contractual disputes

•         Debt collection

•         Letters of demand

•         Litigation

•         Personal injury claims, etc

I I should find myself in a case where I am accused of wrong doing by an individual (civil meaning between two parties), I hope my insurance company will cover all the types of cases, as well as assist when I wish to take another person or company to court in a civil case.

Criminal Law

•         Fraud, theft, robbery or assault

•         Arrests

•         Bail applications

•         Consumer issues

•         Driving under the influence

•         Reckless driving

•         Search warrants, etc.

This area is where most legal insurance companies are doing proper cover. This is of course the area that scares most citizens. But, in all probability, this is the area which legal insurance companies know are used the least – but do wonders for advertising.

Family Law

•         Ante-nuptial contracts

•         Custody disputes

•         Divorces

•         Family violence matters

•         Interdicts

•         Maintenance disputes, etc.

Being able to handle family affairs privately and confidentially is very important for every consumer. This area of law also calls for the ability to settle disputes within the family about legal matters.

Labour Law

•         Dismissals

•         Disciplinary proceedings

•         Pension payout disputes

•         Restraint of trade agreements

•         Retrenchments

•         Unpaid wages

•         Working condition

In the employment arena we are often caught out either not knowing our rights, or thinking that we actually do when we don’t. Our legal insurance should allow us to get quick assistance, especially in cases where we need advice before following any course of action that could be detrimental in the long run.

Surely this is not too much to ask from your legal insurance company?

Money to be made in helping consumers

The Namibian 5 Feb 2013

Shortly before Namibia gained its Independence, I was arrested along with around thirty students for a “public gathering without a permit”. We were protesting the establishment of army bases near schools as this was endangering the safety of especially the female learners. Upon our arrest I laughed at one of the police officers and he told me, “Lag vir jou gat en bid vir jou siel” (Laugh at your ass and pray for your soul).

Now you might be wondering what this has to do with consumer affairs. This past week I was enquiring about a consumer complaint regarding a second-hand car purchase. The company representative told me the car was sold “voetstoots” and the buyer should beware. I told the representative that soon we would have a law in place to prevent companies from this kind of business practice. He laughed in my face and told me I will wait a long time before the consumers would take up their rights in this country. I then felt like telling him exactly what that old apartheid era police officer had told me.

Unfortunately, the specific consumer has no recourse under the present law and is stuck with vehicle that is not roadworthy, and even worse, a lease agreement with the bank on this vehicle. However I could advise the consumer (and you the reader) when you purchase a second-hand vehicle you should first ask consumer assistance organisations like the Automobile Association (AA) for assistance. These organisations can assist you in getting a roadworthy test before you purchase your vehicle. The roadworthy test is basic - it involves checking that all major safety features of the vehicle are in working order. These features include the safety belts, brakes, steering, exhaust system, transmission, mirrors and the electrical system. The test also involves checking the vehicle’s documentation and serial numbers – this is to make certain you are not unwittingly purchasing a stolen car.

I was rather disappointed when speaking to the AA that they no longer provide this service themselves, but would be able to provide a referral to a trusted partner in the consumer place of residence throughout the country. And this led me to my brainwave. How many business opportunities are there for companies who can help consumer when they purchase a product, especially like a house or a car. Already, I had identified an opportunity for a potential entrepreneur to provide roadworthiness test and enable them to link with the AA, but what other opportunities might arise.

The idea I wish to share with you is a “house-worthiness” doctor. Many buyers (especially first-time buyers), are so impressed by the house and the fact they got approved for the loan, they do not enquire too deeply on the repairs and maintenance the house might require. As most buyers use their maximum amount they qualify for in payment, they are not able apply for a second mortgage to do these repairs to their property. Many buyers are also fooled into the thinking that the building compliance certificate is sufficient. It is not, The compliance certificate only applies to the building plan, municipal services and certain building codes, and not necessarily to checking the working condition of pipes or even (as I found out to my own detriment) the age of the electrical wiring in the house.

A person with experience in the building industry (perhaps even a retired person) should consider developing such a training institute. We have many artisanal workers who are looking for employment; maybe we can do something about this by providing training in checking the worthiness of the house for the consumer in the country.

By the way, I did have the last laugh on that police officer. We students were released and within six months we won the court case in Bloemfontein for wrongful arrest. And like all good stories go, this one ended happily – I used the money from the wrongful arrest to buy an engagement ring. But that’s another story.

The downside of Credit

First printed in Consumer News Namibia magazine - Feb 2013 edition

"Credit buying is much like being drunk. The buzz happens immediately and gives you a lift.... The hangover comes the day after." Joyce Brothers

Many consumers struggle to repay their debts. I have heard percentages as high as 70% of income is being used to repay debts. Many young people are ending up financing their lifestyle (which they cannot afford) through credit. Many consumers need help with restructuring their debts. The Namibian Financial Supervisory Authority (NAMFISA) is proposing a Financial Institutions Bill that will provide for debt counselling as part of the assistance to consumers.

Before discussing the new debt counselling I would like to add that there are other factors at work besides the servicing of debt; they include income volatility, legalised gambling, bigger medical bills and a cultural shift that has de-stigmatised bankruptcy and bad debts.

So what is the difference between the present administration order and the new debt counselling?

The idea behind Debt Counselling is to help clients reduce their overall debt with creditors in the most cost effective way. An Administration order can take a large part of your disposable income to offset the relatively high cost.

Debt Counsellors are proposed by the Financial Institutions Bill in order to specifically deal with people in trouble with their finances. These debt counsellors will have the support of and have to be approved by the Government. An administration order is presently used with the view to resolve an individual's over indebtedness. However this method can be very costly and with various limitations.

Unlike under an administration order, 95% of your monthly payment will go to your creditors under a debt counselling plan. A debt counselling plan will manage all your payments to creditors from a central distribution agency on a monthly basis on your behalf.

Under administration, distribution by Lawyers is only done once every three months after all their costs have been deducted (In some cases it can take longer than a year before your creditors' receive any form of payment).

Remember, that once a debt counsellor has accepted your application, they will inform all your creditors that you have applied for debt counselling. You will not be able to access any further credit until your debts have been repaid. You will even have to cut up your credit and store cards such as Edgars, Markhams, etc.

At present, there are no accredited debt counsellors in Namibia. This is a new occupation and training will have to take place to ensure the consumer gets the full benefit of this new law.

Training of Debt Counsellors

The new Act could become law within the next two years. Once enacted, there will have to be a process of training Debt Counsellors to assist consumers.

If we follow the proposed Bill (as it is copied from the Act in RSA) to become a debt counsellor, Namibians have to be over the age of 23 and have a minimum of two years experience in accounting, finance, legal, para-legal or credit fields.  Aspiring debt counsellors will also have to have a clean credit record - have no debt-related judgments against them at the time of applying and not be under administration.

A debt counselling course over five days covers general outcomes such as listening and communication skills, interviewing skills, as well as budgeting and personal financial management know-how.  It also requires specific outcomes regarding the debt counselling process as stipulated in the proposed Bill - from filling in an application for counselling to obtaining a clearance certificate.

Housing in Namibia

First printed in Consumer News Namibia magazine - Jan 2013 edition

All Namibians have the right to an adequate standard of living, including the right to food, clothing, and housing. It is the responsibility of the politicians to ensure the legal and policy framework is in place, while it is the duty of the civil servants and employees of State-Owned Enterprises (SOE) to implement these in practical terms. Unfortunately, this has not materialised in the form of housing for all. According to estimates, the Namibian housing shortage stands at over 300 000 units. Almost 280 000 of these houses are needed for the households earning N$ 5,000 a month or less.

In 2011, the Minister of Regional, Local Government, Housing and Rural Development, Honourable Jerry Ekandjo stated at the 13th Annual Symposium of the Bank of Namibia, “I would like to emphasise that the limited access to housing in Namibia is of great concern to us all. It is worrying that there is a backlog of about 300,000 houses and that 70 per cent of the population cannot access decent residential properties mainly due to issues of availability and affordability. This alarming situation calls for radical policy measures to restore the housing market.”

Existing Government Programmes

National Housing Enterprise (NHE)

The government created the NHE in 1993 with the objective of “.. financing of housing for inhabitants of Namibia and generally providing for the housing needs of such inhabitants”. In Vision 2030 it is expected that NHE should deliver 7 937 units though no deadline is given. This compares to figures supplied in the Institute of Public Policy Research (IPPR) housing report of 2011 that NHE has only been able to build an average of 253 houses per year since 2003.

Build Together

The Build Together Programme involves:

·         low-income households with incomes that do not exceed N$1250.00 per month

·         low-income households in squatter areas

·         low-middle income households without credit access

The programme was established to cover both rural and urban areas with a target of reaching an average of 1300 families per year.

Targeted Intervention Programme for Employment and Economic Growth (Tipeeg)

In addition to NHE and Build Together Programme, the government through Tipeeg, had as its aim to build 1 507 low-cost houses per year from 2011 until 2014. There are no results on how many of these units have been built to date.

The aim of delivering housing to all Namibians is not being met and we need to hold the management of the National Housing Enterprise (NHE) and Build Together Programme accountable.

New Developments

Not all is gloom and doom though. In September 2012, NHE announced it will establish two new components, one to service land and the second to build the houses rather than issuing tenders to companies to build the houses.

Further to this development, NHE and financial institution FNB Namibia, signed a partnership agreement in November 2012 to provide affordable homes and financing to support low-income earners to acquire housing. They will also assist customers in leveraging these assets to create wealth for themselves – or putting it plainly, using their homes for collateral to acquire credit.

As consumers we have to continue to fight for the recognition of our rights and get the knowledge about where we can access these rights. At Independence, the political and social rights were guaranteed through the Constitution. The fight for recognition of our economic, social and cultural (ESC) rights must continue until each and every Namibian has an adequate standard of living – including the assistance to own their own house.

New Year’s Resolutions to help Namibian Consumers

First printed in Consumer News Namibia magazine - Jan 2013 edition

At the beginning of every year it is common practice to make New Year’s resolutions. This is a commitment you make to one or more personal goals or objectives, or changing of a bad habit. When a person makes a New Year’s resolution they generally plan to do so for the whole of the year. It is generally accepted that these resolutions will make your life better if you follow them.

Consumer News Magazine offers the following ten resolutions to help you avoid becoming the victim of scams, prevent identity theft and save money in 2013.

1.    1.      Do your research. When making large purchases such as furniture, a car or a house, do some investigation on what various retailers and banks have to offer. It is also a good idea to get quotations from various businesses to be able to compare prices. When buying on credit you should shop around for the cheapest interest rate and beware of hidden costs such as insurance on furniture that you might already have covered under another policy.

2.      Keep your computer and mobile phone safe. Many Namibians are now using online banking as well as the mobile banking offers and should thus take extra care of these items. It is also important to keep your pin codes and account details in a safe place and not together with your phone or computer.

3.      Protect your identity. Tear up documents that might contain sensitive financial information and store all your personal documents such as Identity Document, Passport, Drivers Licence, etc. in a safe place. In addition, check your bank account regularly for payments you might not be aware of.

4.      Get everything in writing. Make sure that when you get a service from a company they put their offer in writing. This will prevent misunderstandings, and protect you if something should go wrong in the transaction.

5.      Don’t share everything on Facebook or Twitter (or other social media). A future employer or possible soul mate can see information you might prefer hidden. Do not post compromising photos, and check that others cannot tag you in photos either. Keep in mind too that the thieves can also use information about when you are on holiday to pay your house an unwelcome visit.

6.      Never send money to someone you do not know. Many scams want you to send them money before you receive your prize or whatever they are offering and one sent, you will not be able to get it back very easily.

7.      Beware of job offers that will let you make “easy money”. Unemployment in Namibia is high and crooks are now targeting the unemployed with job offers, work-at-home schemes or other business opportunities that promises big money for very little work and no experience required. If it is too good to be true, it probably is.

8.      Use a savings account. When you leave money in your savings account, you get interest on this amount. This is not always the case with cheque and credit card accounts.

9.      Budget, budget, budget. Every month you should prepare a budget to show your income, expected expenses and your savings. You must make an effort to follow this budget and you will be surprised how much you save when having a clear understanding of where your money is going.

10.  Nothing is free (except Consumer News Magazine). Beware of cash back or other free offers that encourage you to buy. There is always a price to pay, and you normally find out only later.

If you can stick to your resolutions you will be a much happier, wealthier consumer in 2013.