Acknowledgement of debt

Banks and other creditors make extensive use of  " Acknowledgement of Debt " and most of these are standard company printed documents - Clients tend to sign these documents out of fear of "Attorney Actions"   

There is no way that any creditor can claim that this document is not regulated in terms of the NCA and  the "permission for summary judgment" clause contained therein (it is always there) this document is totally illegal.  The problem is that banks - for one execute on this and get judgment and to be able to take them on about the judgment is a massive legal cost for the debtor - 

Some very clever lawyers thought they might get around this: 

Renaming AOD's crafty or downright stupid?

Banks (apparently on legal advice from their brilliant legal teams) are now changing the scenario of AOD’s by calling it “Merely a settlement agreement” containing the following clauses:

“For purposes of executing in terms of this Settlement Agreement the parties agree that this settlement is not subject to the National Credit Act 34 of 2005 as this agreement merely amounts to a Settlement Agreement and no credit is granted to defendants”

And then they drive a nail straight through their own argument with this little gem:

“This Agreement shall not create any novation of the cause or causes of action in terms whereof the defendant owe their indebtedness to the plaintiff”

If the “merely settlement agreement” is not a novation it is then part of the original agreement and it cannot then be outside of the NCA. Trying to get a client to sign this document would then be in contravention of art 90(2) a (ii) of the NCA A provision of a credit agreement is unlawful if its general purpose is to deceive the customer and 90 2(b)(i) it directly or indirectly purports to waive or deprive a consumer of a right set out in this act”