If you have debt and you are not paying back that debt who can hound you for it? The creditor themselves obviously, so can attorneys. The third person who you may hear from is a debt collector. In terms of the Debt Collectors Act 114 of 1998 [8.(1)] ….. no person, excluding an attorney or an employee of an attorney, shall act as a debt collector unless he or she is registered as a debt collector in terms of this Act. It is the stated position of Ryts that if you have debt and you are able to, then you should repay that debt. But everybody must play fair. The Minister of Justice [14(1)(a) must approve a code of conduct for debt collectors which has been done.
[15. ( 1)] A debt collector may be found guilty by the Council of improper conduct if he or she ……..makes use of fraudulent or misleading representations, including-
(i) the simulation of legal procedures;
(ii) the use of simulated official or legal documents;
(iii) representation as a police officer, sheriff, officer of court or any similar person; or
(iv) the making of unjustified threats to enforce rights;
[19.] refers to the recovery of money – A debt collector shall not recover from a debtor any amount other than-
- the capital amount of a debt due and interest legally due and payable thereon for the period during which the capital amount remains unpaid; and
- necessary expenses and fees prescribed by the Minister in the Gazette after consultation with the Council.
Further, a debt collector shall deliver to a debtor, upon request and against payment of a prescribed fee, a settlement account containing a complete exposition of all debits and credits in connection with a specific collection: Provided that a debtor shall be entitled to request a settlement account free of charge once in every six months.
Taking the above into consideration, if you have dealings with a debt collector, assuming that they are registered, you might want to consider the following;
They may not make unjustified threats to enforce rights – so when they sms you and say something like “legal action pending” please invite them to carry on. The majority of the time it is just bluster. If they do take legal action you can deal with it at the appropriate time. We have mentioned in an earlier article that many times the debt collector is acting for their own commercial gain and going to court is not an option for them. Clause 5(3)(b) of the Code of Conduct notes that a debt collector may not misrepresent the true nature of his or her business, or threaten to institute legal proceedings, whether civil or criminal, if there is no intention to carry out such a threat;
Collection costs – the costs for collection are noted in Annexure B of the Regulations Relating to Debt Collectors 2003. You should get the know them. You may wish to try and pay the creditor directly without the associated debt collector costs. Many times you will get away with it.
Quite often if you ask what is owed to the creditor the debt collector will give you a lump sum amount. You are entitled to a breakdown. Make sure you get it.
Finally, and this is very important, if you read the Debt Collectors Act it refers to the recovery of monies owed. It says nothing about repossession of goods or vehicles. If you hand the keys of your motor vehicle to a debt collector, you do so at your own risk. Repossessions have to go through a court process and, where applicable, comply with the National Credit Act.
Be aware – it’s a jungle out there.
