Don’t let a debt collector bully you

As consumer debt grows in South Africa, so does the debt-collection industry. However, as difficult as retrieving unpaid debt may be, debt collectors are not above the law. They’re bound by regulations and consumer-protection principles.

We spoke with Benay Sager, the executive head of DebtBusters, a leading debt counselling company, about consumers’ legal rights and problems with debt collectors.

Tip: Outstanding debts may jeopardise your financial security. Evaluate your credit score to assess your current standing.

What debt collectors may not do

Debt collectors put pressure on people to pay what they owe. However, the National Credit Act is clear on what is, and isn’t, acceptable.

Prohibited activities are noted on the DebtBusters website. These include:

• Harassment or intimidation. “If a debt collector calls, messages, or emails you multiple times a day, especially during odd hours, this is considered harassment,” the website notes. The debt collector may also not intimidate you by making false or exaggerated legal threats.
• Threatening violence. You should never be made to fear for your safety. “No one should ever feel physically threatened over a debt,” the website states.
• Verbal abuse. If a debt collector is disrespectful or shouts at you, using insulting or hurtful language, you don’t have to stand for it.
• Coercion. You may not be coerced into signing anything you’re uncomfortable with, or don’t fully understand.
• Overcharging. Debt collectors must adhere to the regulations stipulating what they can charge you. “All charges should be transparent, fair, and justifiable,” DebtBusters emphasises.

A “demand” for their services

South African consumers have a justifiably negative view of the debt-collection industry, says Sager. However, he adds, there is a demand for their services.

“They’re not all bad people doing bad things,” he notes.

The debt collected is not confined to banks and other credit providers. It may, for example, include arrears on cell phone accounts, satellite television subscriptions, or municipal bills. 

It’s common for companies to outsource their debt collection or sell their debt to an agency, which may even sell it on to another party, Sager adds.

When debt becomes detached from the original creditor, it adds layers of costs for consumers and creates administrative headaches for debt counsellors.

When to consider debt counselling

If you’re overindebted, debt counselling offers many advantages – one being that you may no longer be approached by debt collectors.

“In theory, once you’re in debt counselling, all communication should be channelled through the debt counsellor,” Sager advises.

Where to complain

Debt collectors must be registered with the Council for Debt Collectors (CFDC) and are bound by its code of conduct.

If you have problems with a debt collector, you can complain to the CFDC via its website.

Tip: Struggling to manage your repayments? Determine your eligibility for debt consolidation.