Terrorising, bullying or overcharging debtors are no longer options for debt collectors, thanks to a law enacted about three years ago.
If a debt collector does not follow strict rules meant to regulate his or her conduct, debtors can now take action under the Debt Collectors Act of 1998, which was only fully promulgated in 2003.
Action open to debtors includes laying complaints against registered debt collectors with the Council for Debt Collectors. Complaints must be in writing and made under oath.
Debtors can also lay a charge with the police against any unregistered debt collector that contacts them.
The act says it is a criminal offence for anybody who is not registered with the council to collect debts on behalf of someone else.
The act sets out a scale of fees a registered debt collector may charge. Anyone who is not registered as a debt collector is prohibited by law from charging any fees.
"Registered debt collectors cannot charge more than R600 on an account," Andries Cornelius, legal officer at the Council for Debt Collectors, said in an interview.
"If the capital amount owing is R600, you as the debtor could be liable to pay that much in fees to the debt collector if that is what it cost him to collect the debt from you.
"If the capital debt owed is smaller, you must be charged less. But the debt collector's fees cannot exceed R600, even if you owe more than that."
However, the act allowed the debt collector to take 10% as a collection commission from every debt repayment the debtor made, said Cornelius.
"The commission is limited to a maximum of R300 an instalment, which means if you pay a debt collector instalments of R3 000 a month on your debt, he will be entitled to R300 a month in commission, over and above the R600 he can charge once off for whatever it cost him in phone calls, correspondence and any court processes he may have had to complete to recover the principal debt."
Cornelius said the act did not allow registered debt collectors to charge fees for tracing and administration.
"There is provision only for fees for phone calls and letters and unforeseen expenses amounting to no more than R12."
The law also allowed debtors to ask for a statement of costs every six months, free of charge, said Cornelius.
"Any debtor wanting a statement more frequently than that will be charged R25 a statement. If the debtor does not agree with the debt collector's charges, he is entitled to have that bill taxed at a magistrate's court."
Cornelius advised debtors to ensure that any debt collector that approached them for payment was registered with the council.
"There are 10 000 registered debt collectors in the country. Make sure the person who contacts you is one of them. Ask to see a certificate and registration number from the council, and if you are still not sure, phone the council."
Cornelius said all registered debt collectors had to comply with a strict code of conduct.
"Among other things it forbids a debt collector from contacting a debtor on Sundays, or between the hours of 9pm and 6am on any other day, unless the debtor has asked the debt collector to do so.
"A debt collector is also not permitted to embarrass or harass a debtor. There are various other stipulations in the code which a debt collector must adhere to."
Reach the Council for Debt Collectors by phoning 012 804 9808, or go to the website www.debtcol-council. co.za for more information.