Even defaulters have rights - so don't give in to bullying

Bank collection agents who repossess vehicles from defaulting clients are operating illegally.

The South African Board for Sheriffs said this week that only sheriffs or their deputies, in possession of a valid court order, were allowed to remove a vehicle from a client who had defaulted on the repayments for his car.

However, if the client voluntarily handed over the vehicle, the sheriff did not have to be present.

"Members of the public have the right to refuse handing over their motor vehicles, goods or personal assets to the debt collectors, tracers, representatives or agents of the financial institutions," the board said.

Debt counsellor Darren Manikam said the agents "manipulated" section 127 of the National Credit Act, which states that the surrender of a vehicle must be attested to in writing, and that the person surrendering the vehicle could withdraw the surrender within 10 days.

Lawyer and debt expert Neil Roets said banks used agents instead of the courts because it was cheaper.

"It costs a lot of money to go that route and takes a lot of time to instruct the sheriff. So they appoint their agents or tracers to go to the consumer.

"These guys work on commission, so often we see that they bully the consumer ... Consumers hand over the vehicle fearing that they will be arrested," he said.

Roets said the repossession process was governed by section 129 of the National Credit Act. The act stipulates that:

The bank must inform a defaulter that it intends issuing summons;

The consumer is allowed to see a debt counsellor within 10 days of receiving the letter;

If the consumer does not respond to the letter of demand, the summons is served by the bank; and

Finally, if the defaulter does not contest the summons, the bank will have to secure a judgment in court. The bank will then get an attachment order, and will have to instruct the sheriff of the court to repossess the vehicle.

The Board for Sheriffs said that even if the financial institution or its agents had a court order, they could not repossess the vehicle.

Only a sheriff or his deputy may execute a court order.

However, according to Roets, banks often do not stick to the letter of the law.

"Where the problem comes in is whether the agent explains to the consumer that he has a choice [and does not have] to surrender the vehicle.

"These guys work on commission, so often we see that they bully the consumer into thinking they have no choice. Consumers hand over the vehicle fearing they will be arrested," said Roets.

Debt Collectors' Association of South Africa chairman Paul Slot said that many collection agents used "strong-arm tactics" to convince people that they should hand over the vehicles to avoid having to pursue the legal route.

"Some credit providers have assumed the powers of the sheriff, which they don't have," he said.

Jacqueline Boucher, legal adviser in the National Credit Regulator's complaints department, said it was "improper for a debt collector to collect or execute on a court order without the sheriff or a deputy sheriff being present".

She added that section 15 of the Debt Collectors' Act governed the behaviour of debt collectors.

One of its stipulations is that debt collectors are "not allowed to, among other things, use force, threats or intimidation against a debtor".

Only sheriffs have power to grab cars

The National Consumer Commission has urged people who believe their cars have been illegally repossessed to complain to it.

The commission said consumers who "are aggrieved by this method of collection may lodge complaints with the commission to investigate if the practice is in contravention of the Consumer Protection Act.

The commission said it would look into "how these repossessions are effected with respect to unconscionable conduct as outlined in the act and not necessarily the use of technology to identify the vehicles."

Meanwhile, WesBank's use of licence-plate recognition cameras in seizing customers' vehicles has been slammed by Business Against Crime South Africa.

The organisation, which leads the automatic number-plate recognition initiative that helps the police identify stolen vehicles, has distanced itself from the bank's methods.

Bacsa head Simi Pillay-Van Graan said information from the organisation's cameras was supplied to "the South African Police Service only" and that the organisation had no link "whatsoever" to WesBank's recovery activities.

Pillay-Van Graan said Bacsa would help banks repossess vehicles by providing information from its database to sheriffs of the court.

"We are prepared to help the banks seize their vehicles using a proper legal process [but] we will not give the information to the banks," Pillay-Van Graan said.

"The information will be given to the sheriffs who have warrants because they are the ones who are entitled to that information."

Police spokesman Solomon Makgale said it was illegal for anyone other than law enforcement personnel to stop a vehicle on a public road.

"However, where criminal offences are being committed, such as impersonating a police officer, which is in contravention of the South African Police Service Act, or the use of blue lights by a private person ... the SAPS has interest and any complaint in this regard will be investigated as a criminal offence," he said. - Suthentira Govender, Bongani Mthethwa and Matthew Savides

Breaking all records with technology

WESBANK specialised recovery unit head Willie Schoeman praised field agents for regularly breaking repossession records. He said the company's use of tracking technology minimised its losses.

Referring to figures from May, Schoeman wrote to staff in his department: "WOW what an outcome! A new recovery record has been set. A total of 292 vehicles sighted and finalised. The total accounting balance amounted to R50323672.23. Well done team! The technology applied plays a very effective and important role in the recovery of our assets, thus minimising our losses."

In September last year he complimented staff: "Well done on achieving 226 units on ANPR [automated number-plate recognition]. We are shifting the thinking on how things should be done."

Figures also showed that 151 vehicles were repossessed in May, 83 in June and 146 in July last year.

Asked if the repossessions made using ANPR were done in the presence of a sheriff of the court or their representative, WesBank spokesman Rudolf Mahoney said this was not necessary because the defaulting customers involved had "voluntarily" handed over their cars. - Staff Reporter