OneLaw, one of South Africa’s leading service providers to debt collecting attorneys, recognised both the challenge and opportunity this situation presented. Consequently it set about facilitating the purchasing of debt contracts from their original financial owners, and converting these into good debt via court enforced emolument attachment orders (EAOs) against the debtors’ employers. This legally ensures that the debtors repay their debt in fixed monthly instalments. These active and performing debt contracts are then made available to be purchased by members of the public on the Cambist online platform. The buyers thus become the new debt contract owners. This means they are entitled to recover the full amount outstanding on the ADCs which allows the buyers to make a profit or return of 19.5% per year on the ADCs.
“A lot has been said in the media of late about our sector and the role that companies like OneLaw and Cambist play,” reveals van der Merwe. “A lot of it is frankly rather sensationalist, many of the creditors for whom attorneys collect debts, happily sell the future income streams that they have against the debtors to third parties at discounted amounts. The Cambist platform gives ordinary individuals an opportunity to participate in a market where large institutional financing houses regularly buy debts such as these as a matter of course.”
She stresses that the position of the debtor is not changed at all where a sale on the Cambist platform takes place. In terms of the judgment debt the debtor pays an amount, agreed to by himself, in instalments. These instalments are subtracted from the debtor’s emoluments and paid to the collecting attorneys. Instead of the collecting attorneys paying the amounts to the original creditor, they pay those amounts to the Cambist buyer, who is now the new owner of the debt. There is nothing unlawful or unethical about the Cambist platform. The great benefit of the platform for the ordinary man in the street is that he or she is now also able to buy debt at a discount and directly reap the benefit of the capital outlay, just as any bank, factoring house, or discounting house does where exactly the same transaction is conducted every single day.
Expansion and Innovation
Cambist currently has some 3000 registered clients with approximately R300 worth of contracts in the market. The company is experiencing steady growth in terms of registered buyers on its platform – this is in part driven by the growing awareness of the solid returns that ADCs offer to buyers. Van der Merwe states that any individual or entity who complies with the terms and conditions and has minimum capital available of R6000, can purchase a contract. “We are also busy incorporating other contracts on the platform and soon interested parties will be able to buy a variety of other products, such as cell phone contracts.”
The drive towards the development of innovative products comes as no surprise, since Cambist is a product that has been developed and is maintained by OneLaw (Pty) Ltd, which has earned for itself a reputation as an innovator in the field of debt collection. “The technological underpinnings are important elements in our success,” notes Van der Merwe. “The system is cloud based and we have a highly skilled IT department that understands the needs of the business and ensures that things are always running smoothly. “This technological base is complimented by an important human element – customer service. We place a very high premium on this. In fact, the testimonials we have received from customers reveals both the importance and success of our approach to customer service. “The Cambist team pride themselves on responding immediately to all enquiries, combined with the stability and user friendliness of the system, most enquiries can be solved, either by the user self, or a member of our team.”
How it works
Where a creditor obtains a judgement against a debtor and an EAO has been issued, the judgment debts are fairly secure sources of future income. The value of the future income stream is sold for a discount to the purchaser. The discount given away by the seller is then the profit that the purchaser will in time gain from the contract. Cambist is a virtual market place where the ‘owners’ of debts can offer them for sale at a discount to ‘buyers’. Through a series of cessions the rights against the debtors are transferred to the buyers and the creditors get a fair present day value for the debts owing to them.
This presents a win-win scenario for everyone involved. The debtor’s position remains unaffected while the original financial owner of the debt contracts enjoys an immediate cash-flow benefit by earning the outstanding capital faster, albeit at a discount. OneLaw enjoys the benefit of immediately earning fees on the services it renders to the financial owners of the debt contracts. Similarly attorneys benefit from immediately earning their professional fees. Finally, a market is created where Cambist buyers enjoy the opportunity to earn an income from the range of available ADCs.
EAOs play an important part in our economy,” concludes van der Merwe. “They are an instrument whereby debts are recovered and debtors are forced to control their level of indebtedness – without these orders, the cost of doing business will increase and this will impact the ordinary man in the street, as he will pay more for goods and services as companies will look to find ways to recoup their losses.”
Invitation to the Public
OneLaw, through Cambist, enables members to share in the returns derived from purchasing active debt contracts. Some of the benefits include:
Low-risk and steady monthly income
There are no specific skills or experience in finances required
Earning a 19.5% annual return from anywhere in the world
The entire process managed through a secure online system and
Monthly payments are safeguarded.
Cambist - Where Business and Opportunity Meet
Uncertainty in global financial markets and the continual search for reasonable returns based on innovative business models has been a persistent theme within economic circles during the last few years.
Many individuals have cast the net wider than usual and considered alternative business opportunities. One of the avenues that is increasingly being utilised is the purchasing of active debt contracts (ADCs). “Various practices of buying and selling debt are employed in South Africa,” explains Magda van der Merwe, Manager, Cambist. “When a creditor obtains judgment against a debtor - after months of effort - and the debtor is obliged to pay the debt in instalments by the court order, the creditor has to wait for its money, and is out of pocket for a long time.”
CASE IN POINT | Cambist
by Valdi Pereira