Welcome to Scorpion’s Legal Tips! Every week we’ll share stories of injustice
and show you how you can strike back legally.
Pearl loves to shop. She loves it so much that she opened up a store account when she could no longer afford to pay cash, so she could continue to shop. But when she failed to repay her debt with them, she got into trouble. The debt was handed over to debt collectors, and in 2005, they started to deduct R180 monthly from her salary.
She owed R1 500 but since the debt collectors have been debiting money from her account since 2005, it means she has probably paid back far more than what she owes. She tried to talk to the store’s attorneys about stopping the deductions and refunding her what she overpaid, but they refused. Who’s in the wrong here, and what can Pearl do about her situation?
Scorpion Legal Protection’s advice
The National Debt Collection Act 114 of 1998 regulates the process of collecting debts in South Africa. So what is debt collection, and who can do it? Debt collection is when an attorney, a person who is an agent of an attorney or a registered debt collector collects, on behalf of the credit provider, an outstanding amount plus lawful interest, admin costs and collection fees, which is capped to a certain amount by law.
If a debt collector charges for their services, they must be registered with the Debt Collectors Council. A debt collector is not allowed to:
When a debt is handed over for collection, additional costs like interest and other charges may be added over and above the amount of debt which is owed, thereby increasing the amount significantly.
Pearl needs to contact the creditor's attorneys and request a complete breakdown of her balance, including their bill of costs in the matter to justify their fees.
There are times where a debt does not reduce due to the fact that payments were not received, thereby attracting interest, or that payments were made late to the creditor's attorney. Pearl will need to approach her employer for a further breakdown of the payments already made in order to make a comparison and determine whether there are any discrepancies between the statement from the attorney and her employer, as this might explain the time period it took her to repay the money.
Scorpion members have access to our 24-hour Legal Contact Centre and can call us anytime, anywhere for legal advice and assistance. They have peace of mind knowing that, when trouble strikes, they’ve got access to lawyers to represent them in court and help them strike back legally.*
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* Terms, conditions, limitations and exclusions apply (click here to view the Legal Policy Document). This is only basic advice and cannot be relied on solely. Names have been changed to protect identity.
Date added: 01 November 2018