No need to deal with debt collectors on the phone

Two weeks ago in this column I stated that of the 26.5-million credit active South Africans, 62.73% are classified as being in good standing by the credit bureaus.

That’s revealed in the National Credit Regulator’s latest stats.

At the time, I was surprised that the percentage was that high, given how drastically consumers are being squeezed, financially, from all sides.

It turns out “in good standing” means not more than three months in arrears. So clearly the percentage of credit active South Africans who haven’t yet missed any repayments would be far lower.

That means, among other things, that a massive number of South Africans are currently getting — or dodging — calls from debt collectors. If you’re one of them, here’s the first thing you need to know: you do not have to engage with a debt collector on the phone. You are within your rights to insist the company sets out its demand in writing, via email. So instruct the caller to email you with the following information:

• The name of the debt collecting company, and proof of registration with the Council for Debt Collectors (CFDC);

• The name of the original creditor you owe, what the debt is for, and when it was incurred; and

• The total amount of the capital debt, including the interest and collection costs which have accrued since the debt was handed over by the creditor in question.

Apart from sparing you the unpleasantness of that “pay up” call — and the possibility of you divulging your personal and financial info to someone who is not, in fact, a registered debt collector — an email will provide both parties with a clear record of the engagement.

Right, so you’re off the phone and onto email. Here are some other rights you would do well to exert. You have the legal right, in terms of the Debt Collectors Act, to:

• Obtain legal advice before signing anything;

• Not to be contacted by a debt collector before 6am in the morning or after 9pm in the evening, or on a Sunday;

• Not to be harassed, humiliated, embarrassed or threatened;

• To refuse to pay anything until they give you details in writing and supporting documents to their claim; and

• If a debt collector refuses to send you copies of loan documents or statements for an alleged debt, you have the right to complain to the Debt Collectors Council.

And once you start paying, you have the right to ask for — and receive — a free statement every six months.

It’s bad enough being hounded relentlessly by debt collectors for a debt you do legitimately owe, but when you don’t owe the money — either because you’ve already paid it, or it has prescribed, or it was never your debt in the first place — the irritation factor is massive.

A colleague recently started receiving calls from a debt collecting company — several a day, from different numbers, which went on for almost two weeks. Every time she explained that shed ’ never contracted with the company in question, and that the money was owed by a former employee, and she pleaded for her number to be removed from the file. But the daily calls continued regardless.

Finally, she turned to the CFDC for help, emailing her complaint — certified by a commissioner of oaths — to info@cfdc.org.za.

The council immediately took up her case with the debt collector in question and within two days the calls stopped completely. Good to know!

Surely, I asked the CFDC, at some point it should become clear to a debt collector that they are barking up the wrong tree, thus wasting their time and call money?

There are a few possible scenarios behind what my colleague experienced, I was told: call centre staff didn’t make “wrong person” entries on the system; the system is too basic to allow every agent to make such entries, or the business is deliberately running up costs to the max. According to regulations under the Debt Collectors’ Act, debt collectors may charge debtors R21 for every email they send and R21 for every call they make.

Surely that encourages collectors to phone bomb debtors?

Not so, thanks to a crucial word in the regulations, says credit industry veteran Eugene Joubert, who drafted the Debt Collectors Act.

“The wording is ‘necessary’ phone calls, and ‘necessary’ emails,” he says.

So, for example, if someone is paying as they have agreed, repeated calls about the debt are unnecessary and the debtor should lodge a complaint with the CFDC.

If you are contacted by a collector to pay an old, prescribed debt — one which you have not paid in the past three years, nor acknowledged in that time, or been summonsed in respect of it — tell the collector to either prove that it has not prescribed, and issue summons, or close your file.