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Creditors Harrassing You?

QUICK TIP The National Credit Act was introduced to protect you from dishonest and over-zealous creditors. Make sure you know your rights in terms the Act.

My creditors are chasing me for money – what do I do?

Debt Collectors are governed by the Debt Collectors Council and have to comply with a Code of Conduct. Unfortunately, with every profession, there are bad eggs and they should be reported and have disciplinary action taken against them. Fortunately there are many debt collectors who appreciate the need to deal with debtors in a responsible way and will respond appropriately.

The first point is to appreciate what the role of the debt collector is. They are tasked with the job of collecting the money. Full stop. They are not interested in your circumstances. They just want your money. Your account has been handed over to them to take legal steps to recover the money you owe the credit provider. They usually get paid a percentage of the amount collected and it is essential to their collection business that they recover as much as possible from you.

You need to start by verifying any claims by debt collectors
For claims about consumer finance, including personal loans, credit cards and store cards, you have a legal right to a statement of the amount owed and how it is calculated under the Credit Agreements Act (No 75 of 1980) and the Credit Agreement Amendment Acts (No 9 of 1985 / No 53 of 1987 / No79 of 1995)) as well as under the National Credit Act (Act 34 of 2005).

If a debt collector refuses to send you copies of loan documents or to account for an alleged debt, complain to the Debt Collectors Council on Tel : (012) 804 9808 or (012) 804 3402 or the Association of Debt Recovery Agents ((011) 333-4335 or (011) 787 3838 Fax: (011) 333-6960, or lastly to the Consumer Affairs Provincial Department or agency in your province. For more information, go to www.debtcol-council.co.za.

Next ask yourself, are they very old debts?
Generally, if a creditor does not start civil proceedings in a court to recover a debt within three years from the last transaction, you have a complete defense against any claim. The Courts will not enforce the debt. This is because the claim may well have prescribed (meaning the claim has lapsed in terms of the Prescription Act (No 68 of 1969).

Beware! If you acknowledge your indebtedness either by making payment of an old debt or otherwise agreeing that you owe the money, you may start the three-year clock running again from scratch. If someone demands payment of a debt going back several years:
demand to see either proof of judgment or evidence that an acknowledgement of debt has been made in the last three years; and make sure you get legal advice before you make any payment at all or otherwise acknowledge the debt. Should the collection attorney issue summons it is critical that you defend the matter based on the claim having prescribed. Should you fail to do so, judgment may be awarded against you as the court will not necessarily know that the claim has prescribed.

Debt collectors must act reasonably
Under the law, debt collectors must behave in a business like way, without misleading, abusing, threatening or harassing you.

Creditors, businesses that buy unpaid debts, and debt collectors may take reasonable steps to:

contact you, on more than one occasion;
remind you firmly (but politely) of your obligation to pay;
make arrangements to enable your debts to be repaid;
warn you about what may happen if you do not pay: including their right to sue you, to recover costs of enforcement action, and to record a judgment debt on your credit file which may reduce your ability to get credit in future.
This is another way that debt collectors use to get money from you
They ask (or threaten) you to sign a form, called an Admission of Liability or Acknowledgement of Debt or Consent to Judgment. If you sign this form, it gives the debt collector the right to demand money from you on new terms without any need to check on the original loan or purchase.


By signing such a form you also agree that you owe the debt-collecting company all the extra administrative charges of the debt-collecting company. The original amount that was owed to the credit grantor can be easily doubled once all the administrative fees of the debt-collecting company such as letters, notices and so on are added on.

If you sign this form and then refuse to pay the debt collectors, they can refer the debt to their lawyers. Then you will have to pay the debt-collector's lawyers the original debt, the debt-collector's fee and any legal costs.

Remember you do not owe money to the debt-collecting company. You may owe money to the shop you bought from.
Seek Advice Before Signing anything!

Unacceptable debt collection practices
You have a legal right to complain about harassment and other unacceptable debt collection practices. However, you are still obliged to repay your debts, so try to reach an agreement with your creditors regarding repayment.

Here are examples of illegal and unacceptable conduct:
Assault, intimidation, trespass and harassment
Using physical force against you or to enter your property. Contact the police immediately.
Intimidating, frightening or 'stand over' tactics.
Blocking access to your premises.
Trespassing on your premises after you tell them to leave, or returning after you tell them they are not permitted on your premises. Trying to tire you out or exhaust you, for example by phoning more than 2-3 times per week, or late at night or very early in the morning, unless you agree.
Abusive language
Abusive, racist, or obscene language designed to demoralise or humiliate you.
Embarrassing or intimidating you through other people
Sending demands for payment through uninvolved neighbours or people at work.
Threatening to tell other people about your situation.
Contacting you at work even if you ask them not to do so and give them another way to contact you.
Talking to your children about your situation or threatening you through your children.
False and misleading conduct
Pretending unpaid debts are a criminal offence involving the police or possibly jail. This is false.
Pretending your children can be taken from you because you cannot pay your debts.
False notices designed to look like Court documents when they are not.
(If you get a letter like this from a debt collection firm or attorney, report them to the Law Society of South Africa (Tel (012) 362-1729 Fax (012) 362-0969 or the appropriate provincial law society.)

Verify claims by debt collectors
If you are unsure about the amount being claimed by a collections' department or agent, consider refusing to pay anything until they give details in writing and supporting documents such as a copy of the contract, statements and invoices.

Repossession of cars, mortgaged goods
The Credit Agreements Act No 75 of 1980 grants certain rights to consumers, but not business borrowers, concerning repossession of your car, furniture or other property that secures a loan. For instance, you must be given written notice and a reasonable period in which to make up any arrears before your vehicle can be repossessed. Contact your provincial Consumer Affairs Department.
Please Click Here For A More Detailed Article relating to repossession.

Debt recovery through the courts
Creditors may recover money in court by suing you. This is a civil, not criminal, matter. Depending on the amount claimed, proceedings may occur in either a Small Claims or Magistrates' Court or usually for very large amounts in the High Court.

If you receive a court summons or statement of claim, you must respond within the time set out in the legal documents, usually 5 days. Never ignore them as more action will follow.

For help, contact:

Any Debt Counsellor On Our Site
An attorney - an online list of attorneys is available at the Law Society of South Africa's website www.lssa.org.za
Court staff who can give you basic information;
the Government's Legal Aid Board will usually not assist with civil matters such as these but you can request assistance from them. (To find the nearest office call (012) 481 2700 or Fax: (012) 341 8747).

If you owe the amount claimed, but are unable to pay in full, consider acknowledging the debt on a without prejudice basis (or at worst by signing an Acknowledgment of Debt) and agreeing to pay by installments. If you do not owe the amount claimed, or only owe part of it, file a Notice of Intention to Defend the claim.

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