Falling behind on payments is stressful enough without the added pressure of aggressive debt collection tactics. In South Africa, debt collection is tightly regulated by law to ensure fairness and respect for consumers’ rights.
Debt collectors cannot act outside the law, and knowing your rights is crucial to protect yourself from intimidation and harassment. This article explores what debt collectors can and cannot do, how the National Credit Act (NCA) and Debt Collectors Act protect you, and what steps to take if you’re being harassed.
Who Are Debt Collectors?
A debt collector is anyone who collects debts owed to another person or company for a fee or commission. This includes:
- Attorneys and law firms acting on behalf of creditors.
- Collection agencies.
- In-house collections teams (for banks, retailers, or lenders).
Debt collectors must comply with the Debt Collectors Act 114 of 1998 and be registered with the Council for Debt Collectors (CDC). Attorneys are exempt from CDC registration but remain bound by legal ethics and regulations.
What Debt Collectors Can Do (Legally)
Debt collectors have certain powers under South African law, including:
- Contacting You: They can call, email, or send letters to remind you of unpaid debts.
- Negotiating Payment Plans: They can arrange settlements, instalments, or reduced balances.
- Charging Certain Fees: They can add interest and collection fees if allowed by law and the credit agreement.
- Issuing Summons: If negotiations fail, they can instruct attorneys to issue a summons to recover money owed.
- Taking Legal Action: With a court judgment, they can attach property, garnish wages, or enforce payment orders.
What Debt Collectors Cannot Do
Debt collectors cannot:
- Pretend to be law enforcement officers or threaten arrest.
- Harass, intimidate, or threaten physical harm.
- Contact you at unreasonable hours (generally outside 6 a.m.–9 p.m. without consent).
- Contact your employer or family to shame you into paying, unless required by law.
- Seize your property without a court order.
- Demand payment for debts you do not legally owe.
- Add excessive or unauthorised fees to your balance.
Legal Protections Under the National Credit Act (NCA)
The NCA (Act 34 of 2005) provides strong consumer protections:
- Affordability Assessments: Credit providers must assess your ability to repay before granting loans.
- Debt Review: If you’re over-indebted, you can apply for debt review, which legally prevents collectors from taking action while a repayment plan is in place.
- Section 129 Notices: Before legal action, creditors must send a notice giving you a chance to settle or restructure debt.
- Clear Information: Lenders must provide clear details about your debt and interest rates.
- No Reckless Credit: Courts can set aside loans granted recklessly without proper affordability checks.
The Debt Collectors Act: Registration and Oversight
Under the Debt Collectors Act:
- All collectors (excluding attorneys) must be registered with the Council for Debt Collectors.
- Consumers can file complaints with the Council if a collector acts unlawfully.
- The Council can investigate misconduct and impose sanctions.
Harassment and Intimidation: When It Becomes Illegal
Harassment can take many forms:
- Frequent, aggressive calls or messages.
- Threats of imprisonment or criminal charges for unpaid debt (non-payment of civil debt is not a crime).
- Verbal abuse or insults.
- Threatening to seize property without legal authority.
The Protection from Harassment Act 17 of 2011 protects consumers against stalking, harassment, and intimidation—even if by debt collectors. Victims can apply for a protection order through the courts.
Steps If You’re Being Harassed
- Stay Calm and Keep Records
- Document all calls, emails, and letters.
- Save voicemails and messages that show harassment.
- Request Written Proof of the Debt
- Ask for a written statement confirming the debt amount and creditor details.
- Verify Registration
- Check if the collector is registered with the Council for Debt Collectors.
- Know Your Rights
- You cannot be arrested for unpaid civil debt.
- You can request all communication in writing.
- Negotiate or Seek Debt Review
- Work with the creditor to settle or restructure your debt.
- Apply for debt review if you are over-indebted.
- File a Complaint
- Contact the Council for Debt Collectors, the Credit Ombud, or the National Credit Regulator (NCR) to report misconduct.
- Get Legal Help
- If harassment continues, an attorney can apply for a protection order and defend you against unlawful claims.
Practical Tips to Avoid Unlawful Debt Collection Practices
- Always read credit agreements before signing.
- Keep copies of all loan documents and receipts.
- Verify collection agencies before making payments.
- Avoid verbal agreements—get repayment arrangements in writing.
- Seek legal advice early if you anticipate debt trouble.
Conclusion
Debt collection is a legitimate process, but it must follow strict legal rules. South African law, through the NCA, Debt Collectors Act, and Protection from Harassment Act, shields consumers from intimidation and unfair practices. If you’re being harassed or treated unlawfully, you have the right to take action.
Knowledge is your greatest defence. Understanding what debt collectors can and cannot do empowers you to handle debt with confidence and dignity.
References
Council for Debt Collectors. (2023). Debt Collectors Act 114 of 1998: Code of Conduct. Pretoria: CDC.
National Credit Act 34 of 2005. Government of South Africa.
Protection from Harassment Act 17 of 2011. Government of South Africa.
National Credit Regulator. (2023). Consumer Rights and Debt Collection Guidelines. Pretoria: NCR.
Credit Ombud. (2024). Annual Consumer Protection Report. Johannesburg: Credit Ombud Office.