Debt collectors in South Africa accused of overstepping boundaries
Increasingly aggressive debt collectors in South Africa are facing growing scrutiny over their tactics. Here’s what they’ve been up to…
Credit reporting firm Experian has sounded the alarm on unscrupulous debt collectors operating in South Africa.
With the cost of living climbing steadily, many middle-class South Africans are feeling the squeeze.
Since the COVID-19 pandemic, the prime interest rate has jumped from 7% to nearly 11%, and some food prices have surged by 40%.
Electricity now costs around 450% more than it did 15 years ago, while fuel prices have also risen consistently. Meanwhile, salaries have failed to keep up with inflation, leaving many consumers struggling to stay afloat.
DEBT COLLECTORS IN SOUTH AFRICA
As a result, those who are unable to keep up with their monthly expenses now face the scourge of debt collectors in South Africa. However, the reality is many are being pushed around by unfair and often illegal collection tactics, reports The Citizen.
According to the credit rating firm’s report, 10 million South Africans are over three months behind on various repayments and now face intense pressure from aggressive debt collectors. However, several laws are in place to protect consumers from these unethical collection practices.
WHAT DEBT COLLECTORS WILL DO
Here’s a list of common tricks debt collectors in South Africa will use, that you should be wise to:
- Issuance of a Section 129 notice. They are often sent like a ‘final warning’ to scare people, when they are in fact merely the first step.
- Debt collectors will call late at night or on weekends, often making threats of extortion at the same time.
The number one thing to remember when dealing with debt collectors in South Africa is that you’re protected by the National Credit Regulator (NCR). As such, debt collectors must adhere to the following laws:
- You have 20 days to respond to a Section 129 before any legal action can be taken against you.
- Collectors cannot call you after hours or use intimidation tactics. If you feel you are being harassed, report it to the Debt Collectors Council HERE.
- The consumer has the right to negotiate repayment. You may ask for payment plans or apply for debt mediation.
- If you’ve not been contacted by a creditor for three years or more, the debt is no longer collectible. This is known as prescribed debt.
- All debt collectors in South Africa must be registered and be able to prove the debt. No proof, no payment.