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Old debts don't always need to be paid & beware of fraudsters with your data

Consumer journalist Wendy Knowler’s 'watch-outs of the week'

29 July 2022 - 16:16
Despite it being illegal, some banks are continuing to hound their clients to pay old, prescribed debts, according to the ombudsman for banking services. File photo.
Despite it being illegal, some banks are continuing to hound their clients to pay old, prescribed debts, according to the ombudsman for banking services. File photo.
Image: Siphiwe Sibeko/Reuters

In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use:

Before you pay that bank debt, check that it hasn’t prescribed

The ombudsman for banking services (OBS) warned consumers this week that some banks are continuing to hound their clients to pay old, prescribed debts, despite the practice being illegal.

“The law which forbids creditors from collecting on prescribed debts — part of the National Credit Act — is well-known,” the OBS said in a statement.

“Its aim is to safeguard consumers against unfair and exploitive practices by creditors. But despite the legal requirements and the guaranteed protection they offer consumers, the OBS is still receiving, investigating and resolving complaints from bank customers relating to prescribed debts.”

Between January 2021 and July 2022, the OBS received and investigated 193 complaints alleging that banks were collecting on prescribed debts, and as a result more than R1m was either written off or repaid to complainants.

Of the 118 complaints received in 2021, in about a third of those cases, the OBS found that the banks had been unlawfully collecting or attempting to collect on prescribed debts.

“In 2022 so far, the OBS has received 75 of these matters. In 29% of them, banks have again been found to have transgressed the Prescription Act as well as the National Credit Act,” said banking services ombud Reana Steyn.

“In some cases the consumer complained to us about receiving demands to pay very inflated amounts, and when we investigated, we discovered that the debt had prescribed,” she said.

Just last week, an amount of R216,197 was written off in one case and the complainant was also refunded the R3,200 which he had already paid towards the prescribed debt.

According to the Prescription Act, read with section 126B of the NCA, a person’s liability to pay a debt to a creditor ends after a certain number of years — three years in the case of most debts. That’s provided they haven’t admitted to owing the debt, made a payment towards it or been issued and served a summons during that time.

A word of warning: in many cases, a person’s defence of prescription is cancelled by the discovery that the credit provider had obtained a court judgment against them, which is valid for 30 years.

Don’t assume a caller is not a fraudster because they have all your details

So often victims of fraud tell me they believed the person who called them, claiming to be from their bank or cellphone company, was telling the truth because they had so much of their information at hand.

Roxanne’s story is typical. In her e-mail to me she writes: “I received a call from a woman claiming to be from MTN’s legal dept.

Within five minutes of a call from a hoax 'legal department', fraudsters had made purchases to the value of R16,500 on her account 

“She said a man from Pretoria had requested a sim swap for my number and asked if I knew him.

“When I said I did not, she said that she had to reverse the request and to do so she needed the PIN number she had sent to my phone.

“I refused, but she continued to insist that the man had already accessed my account.

“I asked to speak to someone higher than her, but she said I'd lose access to my number if she didn’t reverse the request to swap right away.

“Then she provided all my details — my full name, ID number, cell number, and address to convince me that she was from MTN’s legal dept. That’s when I ... provided one of the pin numbers — I had received 4 OTPs.

“At that point my phone started receiving multiple SMSs confirming purchases for Checkers vouchers, airtime, a change in my credit limit to over R19,000, data purchases and data sharing. She then cut the call.”

She went straight to her nearest MTN branch but was too late to stop purchases to the value of R16,500 being made on her account within five minutes of that call.

Please know this — thanks to a series of data leaks, all our personal information is already out there.

What they don’t have are our bank account passwords and the automatically-generated one-time passwords from our banks, which we need when making an online purchase. That’s why the crooks need to make those calls to trick us into giving that information.

So don’t believe the caller is for real just because they have information you believe only a genuine bank or cellphone company would have.

Sale or not, you’re entitled to a cooling-off period when you buy online

One of the big perks of buying online is that you get to change your mind about your purchase when it arrives — for no particular reason — and send it back for a full refund. That “cooling off” period of seven days from the day of delivery is provided for in the Electronic Communications and Transactions Act (ECTA).

There are two “buts”, though — according to the act, the consumer must bear the cost of returning the unwanted item, and the online retailer has as long as 30 days in which to issue the refund.

I hear from a lot of consumers who have been denied refunds — requested within the seven-day cooling-off period — on the grounds that they bought the item on some kind of sale or promotion. Pauline’s case is typical.

“I bought sale items online — unfortunately the quality was very poor, but I have just been informed via e-mail that I cannot get a refund on sale items.

“What recourse do I have?”

The ECTA’s section relating to this cooling-off period is silent on the issue of sale items, so it applies whether an item is on sale or not. If that were not the case, all online retailers would have to do to deny their customers that cooling-off period is market all their merchandise as being permanently on sale.

So before you buy a product online which is marked as being sold at a discounted price, check out the company’s refund policy with regard to sale items. It’s much easier to avoid a retailer which isn’t complying with consumer-protecting laws than fight for your rights later.

 GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.

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