‘Contagion in the ranks’

Our investigation so far has uncovered a connected circle of companies with close ties to the Aldum family in Pretoria who have become expert in extracting profits from the bottom-feeding sector of South Africa’s microlending industry – the defaulted debt sector.

On Friday, the companies identified so far are: Cambist, the finance provider, Bridge, the loan originator (the microlender), One Law, which tracks down defaulters, and Flemix, the debt collector. On Saturday, the Aldums deny their companies are deliberately linked and say they’re busy delinking several of their business practices as they head for the JSE with One Law. But there may be a critical error: Flemix’s procedures and routines built into their business model appear to contravene several consumer protection laws and are over-charging debt-strapped victims. Because all the businesses are linked, that means the contagion is spread right through the circle. Now, read on.

The Flemix revelations are critical as they implicate the entire lending and collections process established by the Aldums and it may be that tens, maybe hundreds of thousands of debt-strapped victims have been illegally fleeced of money.

BridgeWealth CEO Emile Aldum has previously attempted to distance Bridge from any allegations of malpractice at Flemix. Corne Aldum maintains that Flemix was not established to support Bridge but rather that it was approached to secure debt for the Group. However, C Aldum, admits that Flemix was the major legal collections firm initially used by Bridge. There are also clear personal and professional relationships between Flemix founder, attorney Clifford Coombe, and the wider Aldum network.

Due to the closeness of the companies, Bridge had provided Flemix with the majority of the debt it sought to recover through the garnishee process.

Flemix relied on One Law to trace the defaulters upon whom the garnishees would be imposed.

In essence the lending activities at Bridge have provided Flemix with its business, and this helped Bridge to increase its profits by minimising bad debts.

By securing the majority of Bridge’s garnishees Flemix also aided in the establishment of Cambist.

According to the Cambist website: “OneLaw enables members of the public to share in the returns derived from purchasing active debt contracts, which are collected within the company’s existing legal structures.”

“OneLaw, one of South Africa’s leading service providers to debt collecting attorneys, facilitates the purchasing of debt contracts from their original financial owners, and converts 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.”

C Aldum admits that Cambist had originally only sold Bridge debt which was garnisheed via a service level agreement between Bridge and Flemix.

The whistleblower’s description of mutual dependence between the Aldum-linked companies follows the University of Stellenbosch law clinic’s condemnation of Bridge’s apparent link to garnishee abuse in the Western Cape through its lending brand SA Multi Loans. The whistleblower account is further supported by evidence that key individuals in the network have served as directors of the various companies implicated.

Flemix is believed to have been the major debt collection law firm in the country with evidence that the majority of SA’s major financial institutions had contracted the firm for debt recovery and had then plugged into the Aldum recovery network.

According to the source, institutions’ debt books with as many as 30 000 cases for collection had been handed over to firms which relied on the OneLaw tracing system. Flemix was enforcing approximately 5 000 garnishee orders a month, according to the whistleblower.

The repayment of garnishees could take more than five years, depending on the severity of the debt. This would imply that tens, if not hundreds of thousands of defaulters may still be paying off incorrectly applied Flemix garnishee orders.




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