Debt Collection in South Africa
Our team at i-Check Data Solutions have put together this article about what is debt collection in South Africa all about and how does the process work and what are your rights as a consumer.
WHAT IS DEBT COLLECTION?
Debt collection is regulated by the National Debt Collection Act 114 of 1998 which regulates the process of collecting debts in South Africa. Debt Collection is defined as a situation when an attorney; a person who is an agent of an attorney; or a registered debt collector collects, on behalf of the client, the capital amount plus lawful interest and the debt collectors fee.
WHO IS ALLOWED TO COLLECT DEBTS?
Section 8 of the National Debt Collection Act clearly states that an attorney, or his or her agent, or a registered debt collector may act as a debt collector. A registered debt collector is a person registered with the Council for Debt Collectors.
WHAT DEBTS CAN THEY COLLECT?
A debt collector can only collect the capital amount of the transaction; lawful interest; and his or her administration fee and expenses. The fees are structured by the National Council for Debt Collectors.
DO DEBT COLLECTORS HAVE TO FOLLOW A CODE OF CONDUCT?
YES! Section 15 of the National Debt Collection Act tells us what conduct would be considered “improper” or unethical. A debt collector is NOT allowed to:
- Use force or threats against a debtor or any other person who has ties with the debtor;
- Use intimidation against a debtor or any other person who has ties with the debtor;
- Make fraudulent or misleading representations including:
- Making or using fraudulent legal or official documents;
- Represent themselves as a police official, sheriff, officer of the court or any person other than a debt collector.
- Practice as a debt collector if he or she is convicted of an offense that has an element of violence, dishonesty, extortion or intimidation;
- Spread or threaten to spread false information concerning the creditworthiness of a debtor;
- Violate the provisions of the code of conduct.
HOW DO I DEAL WITH AN UNETHICAL DEBT COLLECTOR?
You must report any unethical behavior to the Council for Debt Collectors which is obliged to investigate any charge (as stipulated under section 15 of the Act).
If the Council finds the debt collector guilty of misconduct, then one or more of the following sanctions will be applied:
- He or she may have their registration withdrawn;
- he or she may be suspended;
- he or she may receive a fine;
- he or she may be reprimanded;
- he or she may be ordered to reimburse the person for an amount set by the council.
CAN I BRING A CRIMINAL CHARGE AGAINST A DEBT COLLECTOR?
YES! Section 15 of the Act provides for a procedure to deal with unethical behavior or misconduct which does NOT exclude criminal prosecution
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