Sibusiso* owed money on a clothing account. When he was retrenched, he could no longer pay off his account on a monthly basis as he had been doing. Eventually, the clothing store handed his debt over to a debt collection agency. Sibu struggled to make the repayments, but eventually, his account with the debt collectors was paid up. Then one day, when he went to check on the status of his account at the clothing store, it said that he still owed money. AZIKHIPHI! That’s not on! Sibu has paid his dues! Scorpion Legal Protection discusses the process of debt collection and what Sibu can do in this situation.

Scorpion Legal Protection’s advice

Step one is to get in touch with the complaints or accounts department of the store and lodge an official complaint against them. Sibu needs to provide the store with proof that he’s paid what he owes them to the debt collector. Following this, he should ask for a paid-up letter from the debt collector. When it comes to debt, as with any other legally binding agreement, anything you discuss should be put down in writing.

The National Debt Collection Act 114 of 1998 regulates the process of collecting debts in South Africa. If a debt collector charges for their services, they must be registered with the Debt Collectors Council. Make sure that the person you’re paying money over to is actually registered and legit – there are a lot of scammers out there! A legitimate debt collector will always be able to provide you with information about who they are, the company they represent and the debt they’re collecting. If they withhold this information or can’t give it to you, watch out – they might not be legit! If you can’t get clarity, you have every legal right to hold off on discussing the debt further until the collection agent sends a written confirmation, within 5 working days, which clearly explains who and how much you owe. Once a debtor has paid up the debt, the debt collector has 2 months to submit the paid-up letter to the credit bureaus and have the listing cleared from the debtor’s credit profile.

If the above is not done by the debt collector, then Sibu can send the paid-up letter to all the credit bureaus himself so they can update his credit profile. This usually takes 20 working days. If a debt collector refuses to send you copies of the statement of the alleged debt, you have the right to complain to the Debt Collectors Council.

Tips:

• Always get your agreement in writing. If you agreed to something over the phone, send an email directly afterwards to confirm the agreement in writing so you have proof if any problems arise later.
• Want to lodge a complaint at the Debt Collectors Council (DCD)? You can contact them here: http://www.cfdc.org.za/contact-us/

If you have a query, follow the Scorpion Legal Protection Facebook page and ask your question during the next Live Q&A (every first Thursday of the month).

* This is only basic advice and cannot be relied on solely. Names have been changed to protect identity.