Unlawfull attempts at collecting Prescribed Debt

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THE FACTS ABOUT PRESCRIBED DEBT

The effect of the Amendment to the National credit act that came into force on the 13^th day of March 2015 regarding prescribed debt.............

Prescription, in terms of debt, is when a debt expires after a certain period of time which is usually three years. The result hereof is that the debtor is no longer regarded as owing the debt and the creditor may not initiate legal action to collect this debt.  This is now specifically prohibited in terms of this amendment. In terms of the Prescription act 68 of 1969 consumers could raise the defense of prescription when a credit provider instituted legal proceedings after a period of three years had lapsed.

 (It was not uncommon for creditors to trick consumers into acknowledging their commitment in terms of the debt and then collect on the acknowledgement.  It is now totally illegal to do this)  The regulatory Compliance Amendment Act 9 (13 March 2015) has included an additional section in the Act that specifically deals with prescription and which has shifted the onus from the consumer to the creditor and has placed a restriction on credit providers or any other person who collects debt.  Section 126B of the Amendment Act provides that no person may sell any debt under a credit agreement to which the NCA applies, where such debt has prescribed. Furthermore, a person may not continue to collect such debt or proceed with the re-activation of such debt where the debt has prescribed and where the consumer has raised or would reasonably have raised prescription as a defense. 

Until the wording of the act is challenged in court and case law comes into force contradicting this the wording is very clear.  Even if you acknowledged a prescribed debt previously and made arrangements to pay on this and have been paying on this –  Creditors will be in default after 13 March 2015 to accept payment from you and I am sure that you will be successful in claiming such payments back if you now raise the defense of prescription.  

iN THE CASE OF KAKNIS v ABSA BANK LTD AND ANOTHER 2017 (4) SA 17 (SCA) IT HAS SINCE BEEN ESTABLISHED THAT THE ACT DOES NOT WORK RETROSPECTIVELY AND THAT THE ASSUMPTION I MADE ABOVE IS NOT APPLICABLE. iT WILL ONLY BE APPLICABLE AFTER THE DATE OF IMPLEMENTATION  WHICH IS 13 march 2015 .  ANY ARANGEMENT THAT WAS THUS MADE BEFORE THIS DATE WILL STAND AND IS STILL ENFORCEABLE 

The Amendment Act has provided protection to consumers in this regard due to a consumer most likely being unaware of the provisions of the Prescription Act No. 68 of 1969 and their rights in terms of this Act. Therefore, credit providers should be aware of the prescription periods of debt and ensure that debts are recovered before they prescribe. It should be noted that the prescription period of three years does not apply to mortgages as the prescription period for mortgages is 30 years. It also does not apply to license fees and payment for services to municipalities, tax and other payments to the state.

The actual wording in the act reads as follows:

The following section is hereby inserted in the principal Act after section 126A:
‘‘Application of prescription of debt - 126B. 

(1) (a) No person may sell a debt under a credit agreement to which this Act applies and that has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969).

(b) No person may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies— 

(i) which debt has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969); and 
(ii) where the consumer raises the defence of prescription, or would reasonably have raised the defence of prescription had the consumer been aware of such a defence, in response to a demand, whether as part of legal proceedings or otherwise.’’

How Bank Cards are stolen at ATM's

This article appeared on the 11th of July in My Broadband news letter

I post this on the blog for anyone who might need it later on -

It is imperative for anyone using an ATM and the following advice from the article is probably the most important:

(THESE ARE GOLDEN RULES !)

1. Never allow anyone to help you at an ATM.   NEVER

2.   ALWAYS PRESS CANCEL ON AN ATM BEFORE PUTTING YOUR CARD IN A MACHINE.

3.   IF THERE IS A SLIP IN THE MACHINE - REMOVE AND DESTROY IT IMMEDIATELY !


Here is the link to the whole article : 

How bank cards are stolen at ATM's


Here is the link to the card skimming article that is also a must read:

How Waiters skim your credit or debit card

High court ruling regarding previous owner debt - groundbreaking ruling!

New homeowner not liable for old electricity bill

Today’s South Gauteng High Court ruling gives property owners extra protection – Chantelle Gladwin – Schindlers Attorneys.

Hanna Ziady  |  27 June 2016 19:02

HANNA ZIADY:  The South Gauteng High Court today granted an order against Ekurhuleni Municipality, which covers Gauteng’s East Rand, ruling that the municipality cannot disconnect the electricity supply to a new owner’s property because of an outstanding debt owed to the municipality by a previous owner of that same property.

The judgment has been welcomed as a victory for property owners, and we are joined now by Chantelle Gladwin, who is a partner and registered tax practitioner at Schindlers Attorneys. Chantelle, it’s good to have you with us this evening, and welcome.

CHANTELLE GLADWIN:  Hi, and thanks very much.

HANNA ZIADY:  The High Court today ruled that it was actually unlawful for the Ekurhuleni Municipality to refuse to supply electricity to this particular premises on the basis that a prior owner had an outstanding electricity bill. Is this precedent-setting, Chantelle? How important is this judgment?

CHANTELLE GLADWIN:  A couple of months ago there was a judgment which everyone called the Mitchell judgment, and it created a hoo-ha in our law because it appeared to say that new property owners are liable for the debts of old property owners. Now that’s not actually what it said, but that’s what a lot of people think that it said.

The judgment that we got today makes it absolutely clear in no uncertain terms that just because you own a property that has a historical debt attached to it doesn’t necessarily mean that you can be held liable in the sense that that debt becomes your debt. It’s still the old owner’s debt and you can’t be turned off for it and you can’t have the municipality refuse to supply you for it.

What the municipality can do if it chooses to – which we’ve never seen happen –is bring an application to court to try and attach your property for the old debt which is owed and which was incurred by the old owner. But, as I say, municipalities don’t generally do that. We’ve never seen them do that.

So this goes a very long way to making absolutely clear what the law is and it gives property owners that little bit of extra protection because until now there wasn’t really anything that explained that distinction very nicely.

HANNA ZIADY:  You noted the Mitchell judgment, saying that really what people thought it said was not what it actually said, but also that this judgment today is perhaps a small step towards repairing any of the harm of that judgment and the Mathabathe judgment. Is this really just a point of clarity – that this judgment finally brings much-needed clarity to this area of law?

CHANTELLE GLADWIN:  Absolutely. Unfortunately the Mathabathe and the two Mitchell judgments have been entirely misunderstood by the greater public and many attorneys – and even the courts themselves. What’s happened is that everybody’s got caught up in the hype of this idea of a new owner being held liable for an old owner’s debt, and that’s not at all what the law contemplates.

So what’s happened is that we’ve had to, on a case-by-case basis, basically carve out a little bit of clarity in every test case that we get to make it 100% clear to municipalities and to the public at large what is okay and what is not okay.

HANNA ZIADY:  Just a quick one, Chantelle. When will more information on today’s judgment be forthcoming?

CHANTELLE GLADWIN:  You can expect an article to be published in the next week or two by my partner at Schindlers, and then a copy of the judgment will be available on our website as soon as I can get it from the court. It usually takes a couple of days, so let’s say in a week or so a copy will be available on our website.

SUCCESSFUL PERSONAL FINANCIAL MANAGEMENT

There are all sorts of financial management programs available that try and teach people financial management.  Some are more successful than others. BUT still people are struggling with debt and mismanagement of money.

Financial management cannot be taught, it can only be learned. Having someone or something to aid with the process is of great benefit. Find a guide, not an instructor.

I am going to start publishing the pages of an upcoming ebook on sound personal financial management in the coming weeks on this blog and if you need some guidance on the subject this is an ABSOLUTE MUST READ and you cannot afford to miss a single page!

To receive an email every time a new page is added  register by inserting your email in the space provided on this blog. (directly to the right of this)

This is totally FREE and will change your financial perspective forever ! 

FEEL FREE TO SHARE THIS WITH ANYONE OR ANY GROUP YOU THINK MIGHT BENEFIT FROM THIS.

Maximum interest rates on loans from 6 May 2016

Maximum interest rates and costs applicable to different types of credit transactions – applicable from 6 May 2016	Present repo rate 7%
Mortgage agreements	Repo Rate + 12% per year
Credit facilities	Repo Rate + 14% per year
Unsecured credit transactions	Repo Rate + 21% per year
Developmental credit agreements (i.e. small business, low income housing)	Repo Rate + 27% per year
Short-term transactions	5% per month on the first loan and 3% per month on subsequent loans within a calendar year
Other credit agreements	Repo Rate + 17% per year
Incidental credit agreements	2% per month

Source: Government Gazette, 6 November 2015

Initiation fees on credit agreements are also limited under the regulations.

Credit type	Maximum initiation fee
Mortgage agreements	(a) R1 100 per credit agreement, plus 10% of the amount in excess of R10 000 (b) Never to exceed R5 250
Credit facilities	(a) R165 per credit agreement, plus 10% of the amount in excess of R1 000 (b) Never to exceed R1 050
Unsecured credit transaction	(a) R165 per credit agreement, plus 10% of the amount in excess of R1 000 (b) Never to exceed R1 050
Developmental credit agreements –       for small business development –       for low-income housing	(a) R275 per credit agreement, plus 10% of the amount in excess of R1 000 (b) Never to exceed R2 600 (a) R550 per credit agreement, plus 10% of the amount in excess of R1 000 (b) Never to exceed R2 600
Short-term credit transactions	(a) R165 per credit agreement, plus 10% of the amount in excess of R1 000 (b) Never to exceed R1 050

Handling School fee debt collectors

Schools and Debt collectors

The above link refers to a recent article about actions of Schools to collect on arrear schoolfees.

It is with sadness that one take note of the financial position of schools. But it is even more sad to take note of the financial position of parents with no work or not enough money to be able to afford school fees. But I am a consumer activist and not the keeper of the schools finances and if the schools did their job in the first instance debt collectors should not be involved. Here, in a nutshell,  are the legal requirementse _ When a child is admitted to a public school the Principal MUST discuss the details of possible exemption with each and every parent in person and give him/her a letter signed by the Principal as to the parent's right to apply for exemption. This letter must also be signed by the parent and a copy of it handed to them. The school will need their copy should they start any collection process. This interview MUST be done again should a parent miss even one payment to determine if there was a deterioration in the financial position of the parent. 

Should you be in default of school fees and you could have applied for exemption and did not the first question that arises is :Why did you not apply ?

The law gives you the following rights:

1. To be informed of your right to apply for exemption - a form (Annexure A), contemplated in

    section 41(4)(c) of the Act,must be completed by the parent and signed by the principal 

    of the school and by the parent, indicating that the parent has been informed about the

    provisions of the Act.

2. To apply for such exemption if he/she qualifies and this must be granted - 

    the school does not have any right to refuse this if you qualify - it is as 

    simple as that. 

3.  There is no time limit on your right to apply - this can happen any time in the  

     year should your financial position change

4.  The ONLY qualifying criteria is your GROSS income - which includes 

      everything you earn - it is for this reason that the bank asks for bank statements

       - There is no requirement in the law

      that require of parents to go around at all banks and get letters to the effect

       that they do not havea bank account there -  No school can refuse anyone

       that qualifies for exemption if they refuse to do this - This is the Law !

5.  Should you miss a payment it is required that the Principal again arrange a meeting to determine

      your present financial position and again give you a letter as to your right to apply for exemption

      which must be signed by the Principal and you.  Before this has been done no legal action can be

      instituted by the school.

NOW HERE IS THE PROCESS WHEN A DEBT COLLECTOR PHONES YOU AND YOU KNOW YOU SHOULD BE ABLE TO QUALIFY FOR EXEMPTION:

1. Answer the phone politely

2. Ask for the debt collection agency's debt council registration number

3. Ask for the  debt council registration number of the actual person talking to you.

4. Ask for an email address - this is critical - do not engage on the phone with them any further. Inform them that you will send them an email - If they refuse just put the phone down. Do this everytime until you get an email address ( Emails are paper trails and you have proof of everything)

5. If you did get an email address send them an email along the following lines ( IF you did not get an email send the email to the school principal.

" Please supply me with a copy of the letter contemplated in the section 41(4)(c) which was given to me and which the Principal and myself have signed during the last interview with me to enable me to respond properly to your demands"

That is it - If that letter is sent to you, you are at fault and did not apply as you should - that does not preclude you applying now anyway.......................................

No income and debt to pay................

Take time to read this - there is light in the tunnel that is not the train !
The debt counseling industry is one of the industries that show a very nice growth. Unfortunately, their target market is people with an income and able to pay some debt. This market creates itself in that the main reason - and in my mind the only reason why people get into this type of trouble is........wait for it - Greed.  Greed by the lender and the borrower.  The lender wants to give you credit that you do not need at totally overinflated prices - the latest washing machine saga involving Lewis stores and a gardener  is resounding proof of this - Charging someone nearly 4 times the price of an article with all sorts of "advantageous bullshit add-ons" cannot be described as anything else than Greed.

The borrower's greed comes in where he wants to own stuff he cannot afford.  The word "budget" in their minds are for dummies - "I know what I do " -

The one consumer that is not catered for is the one with no Job.  He had a job and lost it for some reason or another and now is being haunted by collectors of all sorts

Their profile looks something like this and you might identify with this:

Age - Anywhere from around 20 to 50 - mostly
Race;  All - mostly White due to "corrective measures" of government.
Composition of family - mostly family with children in school
Property ownership: Yes and no
Rentals: I would say about 60 to 70% are renting their accommodation
Car:  In most cases - and being paid off and possibly in arrears.
Credit profile; Good going onto bad as a result of their financial position.
Other assets:  Furniture, some electronics.
Lifestyle - Classic middle income but also lower income.
Challenges: Surviving - keeping food on the table- children in school etc.

Whatever the reason you are not working the challenges are the same when it comes to Debt collectors:  They haunt you telephonically and schools harrass you about school fees.

Our seminars are going to cover (amongst other things) the following: ( These seminars are being sponsored and will be FREE OF CHARGE)

1.  How to handle telephone calls from debt collectors.
2.  How to negotiate with creditors.
3.  Your rights regarding school fees in state schools.
4.  Actions when confronted by threats of attorneys.
5.  Where and how to complain.
6.  What to do when you receive a summons.
7. Changing your mindset from negative to positive - why do you want to be an employee?
8. Discussion on real business opportunities.
9. Why Multilevel marketing is not an option

What you must do to attend a seminar:  Register on the right to receive follow-up emails on future posts about this