Most people don’t mind running into debt. It’s running into your creditors that’s embarrassing.
If you dodge them for long enough, however, they’ll hand your account over to a debt collection agency.
In many cases, this is much worse and way more discomforting. Anybody who has ever owed anybody money knows all about ignoring unknown numbers calling your phone. You’ve resigned yourself to it. You’re never going to answer a number with a funny-looking area code ever again.
Most of these agencies are willing to stoop lower than a snake’s belly to get what they want. They will hound you day and night and make your life absolute hell.
In this article, we have a look at the tricks these agencies employ, and what your rights are when it comes to dealing with them.
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What Are Debt Collection Agencies?
In their defense, these people are tasked with the daunting job of collecting the money you owe credit providers. Debt collectors are either attorneys, agents of an attorney or registered debt collectors.
They charge service fees for this, as well as receiving a percentage of the amount collected. They have no interest in your ‘hard-luck stories’ or circumstances, and have to be pretty tough on uncooperative consumers.
If a collector charges for their services, they must be registered with the Debt Collectors Council. The National Debt Collection Act 114 of 1998 regulates the process of collecting debts in South Africa. According to this act, collectors are prohibited from:
- Using force or threatening to use force against you or your family;
- Physically threatening you or your family;
- Giving, or threatening to give, information to the consumer’s employer that may affect their opportunities as an employee;
- Serving any false legal documents;
- Presenting themselves as police officers, sheriffs or officers of the court;
- Spreading, or threatening to spread, any false information about your credit worthiness;
- Charging more than the fees set down by the Council.
Though some of them play by the books, others are the absolute worst, most depraved human beings on earth.
Below is an actual example of a summons that was received as a threat to pay an outstanding loan
Some may employ scare tactics, such as sending you a falsified, un-issued ‘Summons To Court’ which has not been stamped.
The Tricks They Pull To Contact You
Once a debt has been handed over, collectors will use any means possible to try and collect the debt from you. Collectors will sometimes employ the good cop / bad cop technique. They will tell you that they’re going to put a manager on the line to speak with you. This is often just another collector masquerading as a stern manager. They do this with the hopes that another voice on the line will get you to open up your wallet.
- They will try to obtain the contact details of your work or spouse or next of kin. Often, when you sign a credit agreement, you’re asked to provide the details of at least one member of your family. Collectors will phone these contacts to try and recover the debt.
- They might try and contact you through your employment and some go as far as threatening to expose you to colleagues and employers. Some of them may even attempt to find out where your children attend school and approach them for details about your whereabouts.
- Collectors will also try and use your social media to track you.
There have been some cases where collectors sometimes manage to access your medical records. This is usually done fraudulently, to access your history. They will then pose as medical professionals and contact you or your loved ones to obtain information.
The point of trying to trace and contact you is in order to push you to acknowledge your debt. Once a consumer has acknowledged the disputed debt, or paid any amount toward it, their legal right to continue disputing this debt falls away.
Collectors don’t tell you this.
Prescribed Debt And How It Works
Debt prescribes when three years have passed and you have not acknowledged or paid anything. If the credit provider has not issued a summons or taken judgment against you, your debt expires. In other words, if you have a debt that the creditor has not contacted you about for three years, the debt prescribes and they are, thereafter, not allowed to send collectors after you for old debt.
However, prescription does not apply to mortgages, TV licenses and other government debt. While there are ways for creditors to still claim this amount, the amendments to the National Credit Act in March 2015 make it almost impossible for debt collectors to touch you after three years.
If any payments or promises of payments have been made in those three years, the debt is still valid and the consumer is liable for it. This is why collectors will try to push you into acknowledging the debt during communications, sometimes even years later. If you admit to knowing about it then they can hold you responsible.
They may, for example, spin the question by asking something like; ‘If you won the Lotto, would you pay your old debt?’ A ‘yes’ answer is regarded as an acknowledgement of debt.
While it isn’t right to avoid paying your bills, it isn’t right for collectors to chase prescribed debt either.
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Know Your Rights
In addition to the conduct of all collectors being regulated by the Debt Collector’s Act, it is also regulated by common law relating to harassment, intimidation and other criminal acts of a similar nature.
Legislations such as the Attorneys Act, the rules of the applicable Law Society, the National Credit Act and the Consumer Protection Act are also there to defend you from disreputable debt collection methods from attorneys.
You should never sign an admission of liability, or consent to judgement, an emoluments attachment or garnishee order. It is important to verify any and all claims made by collectors. For claims about consumer finance, including personal loans, credit cards and store cards, you have a legal right to a statement of the amount owed and how it was calculated. If a collector refuses to send you copies of loan documents or statements for an alleged debt, bring the matter to the attention of the Debt Collectors Council. You are entitled to refuse to pay anything until they give you details in writing and supporting documents to their claim.
Collectors are not allowed to contact customers on a Sunday or outside the period of 6 am – 9 pm on any day. Contact within these times constitutes unprofessional conduct in terms of the Debt Collectors Act.
If the same collector or agency contacts you repeatedly and makes the same threats but does not follow-up on them, this could be a sign that they never had the mandate or had any intention of taking further legal action to begin with. It is unlawful for a debt collector to threaten that legal proceedings will follow non-payment, if there is no true intention to carry out that threat.
So, what can you do?
- Ask the agent to identify themselves and take down their full details. Do not speak to them if they cannot identify themselves and their organisation;
- If they’re calling to collect debt that is more than three years old, make sure that the debt is not prescribed debt. As mentioned before, it is now illegal to collect prescribed debt;
- Do not sign any documents you do not understand;
- If a credit provider or debt collector is demanding payment for a prescribed debt, challenge them and report them to the Council for Debt Collectors;
- Seek professional legal counsel.
Of course, the proper and responsible way to deal with these situations is to not get into debt at all. If trouble is looming, contact your credit provider and be transparent with them. This could avoid you getting blacklisted, or being handed over to a debt collection agency.
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