Debt collection is the process when either and attorney, their agent or a debt collector takes it upon themselves to recover outstanding debts from a consumer on behalf of a creditor. The practice is regulated by The National Debt Collection Act 114 of 1998. In terms of section 8, debt collectors should be registered with the Council for Debt Collectors. This means that if a consumer is contacted by a debt collector, they can verify that the debt collector is authorised to collect debts legally. Illegal debt collection actions should be reported to the NCR.
Debt collection is no longer the shady industry that it is stereotypically portrayed as. Debt collectors are legally required to identify themselves as debt collectors, as well as the client they are collecting debt for. Secondly although they are required to identify themselves, when inquiring about the whereabouts of a debtor, they may not divulge why they are looking for them. By telling anyone other than the consumer about the nature of their inquiry, they are guilty of invasion of privacy and can be reprimanded for it.
If a consumer is contacted by a debt counsellor it is imperative that they know their rights in dealing with these individuals.
First of all a written notice stating the exact amount owed should be sent to the consumer within five days after the first contact.
They may not threaten or intimidate the debtor, or anyone associated with the debtor, nor may they use misleading tactics when engaging with the consumer.
Debt collection should follow the code of conduct drawn up for it, and should always remain ethical and respectful of the privacy of the consumer. Although it is never pleasant for a consumer to receive a call from a debt collector, knowing your rights can allow a consumer to deal with them effectively and fearlessly.
Article written by: Andrea van Tonder 06-2013