• Debt Collection

Debt collection practices are subject to regulation under the Debt Collector’s Act. The activities of debt collectors are subject to a code of conduct issued in terms of the Debt Collectors Act. In terms of this code any debt collector (other than an attorney or an attorney’s employees) who collects debts owed to another for reward must be registered as such. A debt collector may only charge permissible fees.  The Code of Conduct for Debt Collectors can be located at http://cfdc.org.co.za. In terms of the code of conduct a debt collector may not -

  1. collect or attempt to collect for a creditor money in excess of the amount owing by the debtor to the creditor (except for interest and costs legally recoverable);
  2. misrepresent the true nature of his business, or threaten to institute legal proceedings (whether civil or criminal) if there is no intention to carry out such a threat;
  3. utilize a communication which simulates legal or judicial processes (for example the use of documents that would look like a court summons);
  4. communicate with a debtor when his or her legal advisor has notified the debt collector in writing to communicate with the legal adviser;
  5. abuse or intimidate a debtor in any manner, in order to induce a person to pay a debt (for example in the presence of the consumer (credit receiver) calling, or pretending to call a police officer, and then “informing” the police officer that the consumer is resisting payment). When goods – for example motor vehicles – are sold on credit and the consumer falls behind in his monthly instalments, the law will allow the credit provider to recover the vehicle from the consumer by means of a court order and attachment of the vehicle by a court sheriff. Debt collectors often ignore these requirements and endeavour to recover motor vehicles from the consumer without a court order. While there may be situations where such a return of the vehicle is in the best interest of both the credit provider and the credit receiver, consumers would be well advised to obtain legal advice when they receive a demand for the return of a motor vehicle from a purported debt collector or other agent of the credit provider. In certain circumstances a consumer may also voluntarily return goods;
  6. give, or threaten to give, whether directly or indirectly, to a debtor's employer information that may adversely affect the employment or employment opportunities of the debtor; and
  7. make a demand for payment of an account by telephone, personal call or in writing, without indicating the name of the creditor to whom the debt is owing, the balance of the account, and the identity and the basis of the claim of the person making the demand.

Consumers who are aware of improper conduct on the part of a debt collector may report such conduct to the National Council for Debt Collectors.