Debt, if not managed properly, can seem like a dark cloud looming. Not only does a large chunk of your salary go towards repayments, but you may feel hounded by debt collectors.
You do, however, have rights.
The debt collecting process
The National Debt Collection Act 114 of 1998 outlines the debt collecting process in South Africa.
Debt Collection refers to the pursuit of payments owed by an individual or organisation. It involves an attorney, a person who is an agent of an attorney, or a registered debt collector collecting on behalf of a credit provider. The collection is typically the outstanding amount plus lawful interest, admin costs and collection fees, which by law are capped to specified amounts.
Often you will hear the collector mention their “added fee”. While this is allowed, the collector must be registered with the Council for Debt Collectors (CFDC) if they are applying charges. To check if your debt collector is registered, click here.
Debt collection disallowances
Irrespective of their registration status, debt collectors are not allowed to:
- Physically threaten you or your family in any way.
- Serve falsified legal documents.
- Use force or threaten force against you.
- Charge more than the CFDC-outlined tariffs.
- Spread or threaten to spread any fake information about your creditworthiness.
“With rights come responsibility, and as a consumer, you should not pay money to any debt collector unless they are registered with us,” says the CFDC.
While debt collectors are within their right to contact you, should you feel that the collector is rude or is harassing you, you can report them to the CFDC.
“The council has the authority to investigate the matter and can act by closing down the company, or imposing hefty fines, if they find that the debt collector in question has gone against their code,” adds the CFDC.
If you are uncomfortable with the debt or repayment amount, you are well within your rights to challenge it and request full disclosure in writing.
Debt, for many, is inevitable. But if you feel harassed, make sure you know your rights.
TIP: For trusted guidance through the debt consolidation process, contact us. Click here for more information.