Two weeks ago in this column I stated that of the 26.5-million credit-active South Africans, 62.73% are classified as being in good standing by the credit bureaus.
That’s revealed in the National Credit Regulator’s latest stats.
At the time I was surprised the percentage was that high, given how drastically consumers are being financially squeezed.
Turns out “in good standing” means not more than three months in arrears.
So clearly the percentage of credit-active South Africans who haven’t missed repayments would be far lower.
That means, among other things, that a massive number are getting — or dodging — calls from debt collectors. If you’re one of them, here’s the first thing you need to know: you do not have to engage with a debt collector on the phone. You are within your rights to insist the company sets out its demand in writing, via email. So instruct the caller to do so with this information:
* The name of the debt-collecting company and proof of registration with the Council for Debt Collectors (CFDC);
* The name of the creditor you owe, what the debt is for and when it was incurred; and
* The capital debt amount, including interest and collection costs which have accrued since the debt was handed over by the creditor.
Apart from sparing you the unpleasantness of that “pay-up” call — and the possibility of you divulging personal and financial information to someone who is not a registered debt collector — an email will provide both parties with a clear record of the engagement.
Right, so you’re off the phone and onto email. Here are some other rights you would do well to exert.
You have the legal right, in terms of the Debt Collectors Act, to:
* Obtain legal advice before signing anything:
* Not be contacted by a debt collector before 6am, after 9pm or on a Sunday;
* Not be harassed, humiliated, embarrassed or threatened;
* Refuse to pay anything until you are given details in writing and supporting documents to the claim; and
* Complain to the Debt Collectors Council if a debt collector refuses to send you copies of loan documents or statements for an alleged debt.
And once you start paying, you have the right to ask for — and receive — a free statement every six months.
It’s bad enough being hounded relentlessly by debt collectors for a debt you owe, but when you don’t because you’ve paid it, it has prescribed, or it was never your debt, the irritation factor is massive.
It’s bad enough being hounded relentlessly by debt collectors for a debt you owe, but when you don’t because you’ve paid it, it has prescribed, or it was never your debt, the irritation factor is massive.
A colleague recently started receiving calls from a debt-collecting company — several a day, from different numbers, for almost two weeks.
She explained that she’d never contracted with the company in question, that the money was owed by a former employee and pleaded for her number to be removed from the file. But the calls continued.
Finally she turned to the CFDC for help, emailing her complaint, certified by a commissioner of oaths, to info@cfdc.org.za. The council immediately took up her case with the debt collector and within two days the calls stopped.
Good to know!
Surely, I asked the CFDC, it should become clear to a debt collector that they are barking up the wrong tree, thus wasting their time and call money?
There are a few possible scenarios behind what my colleague experienced, I was told: call centre staff didn’t make “wrong person” entries on the system, the system is too basic to allow every agent to make such entries or the business is deliberately running up costs.
According to the Debt Collectors Act, debt collectors may charge debtors R21 for every email they send and R21 for every call they make.
Surely that encourages them to phone-bomb debtors?
Not so, thanks to a crucial word in the regulations, says credit industry veteran Eugene Joubert, who drafted the act.
“The wording is ‘necessary’ phone calls and ‘necessary’ emails.” So if someone is paying as agreed, repeated calls about the debt are unnecessary and the debtor should lodge a complaint with the CFDC.
If you are contacted by a collector to pay an old, prescribed debt — one which you have not paid in the past three years, acknowledged in that time or been summonsed in respect of — tell the collector to prove it has not prescribed and issue summons or close your file.
Finally, here’s a scenario with an important message.
Alan wrote in to say he’d received a payment demand via SMS from a firm of attorneys on behalf of a medical practice.
“Upon investigation I was told that due to Covid, with fewer staff and shortened working hours, I was never sent a bill or statement and that the amount outstanding was two years old.
“I paid the account, but attorneys are now holding me liable for two years’ interest on the outstanding amount.
“Surely I can’t be held liable for this as it is due to the lack of attention to detail and shocking admin by the doctor’s practice for not alerting me to the account in the first place.
“Yes, he can,” Joubert says.
Consumers have responsibilities too. Knowing you received goods or a service, it’s your duty to ensure you pay for them. The absence of a payment demand does not make it a free service.
“The debtor must seek the creditor,” Joubert says.
I’m quite sure that will be unwelcome news to many.
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