The Africa Initiative for a Sustainable Economy has set is eyes on large retailers like Edcon and TFG using Debt Collectors to harass consumers in default of Incidental Credit Agreements by adding costs to the debt balance for sms and emails sent as frequent as three times a week.
In an email sent to some of the suspected culprits, AISE has issued a warning that it intends to approach the Minister of Trade & Industry, demanding an investigation of the debt collection industry via the National Credit Regulator.
This will affect the most retailers and any other business associated with debt collectors pretending to be “law firms”. In some cases, legal practitioners have set up separate companies for the purpose of collecting debts.
One of the most frequently asked questions is however who “owns” the debt? When a retailer hands over its long-outstanding debt book, it often sends it to more than one debt collector. Those who are willing to start the collection process then start calling and texting the debtor. Each sms is charged and each call made is added to the “account”. Then the Debtor is also billed for the “commission” which legally speaking is supposed to be paid by the retailer.
In some cases the debt book is actually sold to the collector, which means that the debt (YOUR DEBT) has been paid by someone else. These fraudulent companies then harass you for the debt “still owed” to the retailer, when in fact, it was settled by themselves. The debt is no longer yours to settle.
AISE intends to set up a Bad Business Risk Register to name and shame all these Debt collectors, and further warned that they will campaign for the stricter regulation of legal practitioners operating collection agencies on the side. They also intend oppose the National Credit Amendment Act, to increase the thresholds currently set in the draft Bill. But their activism is also aimed at the Debt Collection industry as a whole and want the courts to get involved prior to the collection process being started.
How to deal with debt collectors
Armand Rinier shared his advice on Acts.co.za:
- Use Truecall (or similar App) to block calls.
- When they manage to get through to speak to you, insist on dealing only with them in writing. (email is admissible)
- Deny, deny, deny. They are accusing you of owing money. They must prove – you don’t have to prove anything.
- Ask for copies of agreement they rely on and a breakdown of the debt they are claiming.
- Refuse to discuss anything with them until they have answered your above request, in writing.
- Refuse to confirm your id number. (POPI Act)
- Check your credit record at least once a year (credit bureaus are obliged to provide you a free copy once a year). If you see a debt you think is prescribed, you must lodge a dispute and have it removed.