Prescription of debt South Africa in layman's terms.

Application of Prescription.     CONSUMERS can do themselves a favour and save the following somewhere for future reference:  On the 13th of March this year the amendments to the NCA came into force.  Apart from anything contained therein the following paragraph is of PARAMOUNT IMPORTANCE :       "Insertion of section 126B in Act 34 of 2005
31. The following section is hereby inserted in the principal Act after section 126A:
‘‘Application of prescription on 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 Prescrip- tion 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.’’.
This is applicable from 13 March this year and should you already have acknowledged prescribed debt before this date this does not apply.  It also does not apply if you are already paying on these previously acknowledged debt..........BUT ANYTHING you did after the 15th of March if the debt has prescribed can be undone.  I am not going to go into a massive debate here -  Just read the portion carefully and you will understand - especially the last portion : " 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.’’.

Handling bullies-For Dummies................

One of the dictionaries define a bully as:

A blustering, quarrelsome, overbearing person who habitually badgers and intimidates 

smaller or weaker people. 

Let us disect some of these very discriptive words :

Blustering: Loud, arrogant speech, often full of empty threats.   Quarrelsome :  ready or likely to argue or disagree.  Overbearing: often trying to control the behavior of other people in an annoying or unwanted way. Habitually badgers and intimidates smaller or weaker people ...............

How discriptive is this ?   This is stunning !    

Now there is a little known fact that everyone must take congnisance of: 

A bully cannot stand to be bullied - Once you stand up for yourself there is a 99% chance they will back off ! 

Now let us apply this definition to the real world.  On one of the facebook pages I frequent people post problems they encounter in life regarding debt, renting of property and all sorts of other issues.   And in practically every one of these there is a bully lurking in the background.

let us discuss a few of these.  

Someone posted about a landlord that is bearing down on a widow because her husband died and he feels she cannot afford to pay the rent. There is still quite a long time left on the original rental contract.  A bully in disguise ? He is not even disguising anything - he is a freaking bully. 

What does the victim do ?   She is so intimidated by this guys action that she might just accept that he is right and she must move.  What can she do ?  She can stand up and tell him in no uncertain terms that he is harrassing her, that if he feels he has the right to do what he is trying to that he must send her a lawyers letter to enforce his right and she will get her lawyer to answer his lawyer and that she will keep him responsible for her costs.  I am prepared to bet anyone 10 to one that he will back off.

Sometimes bullies only apply one of their mean traits:  "Blustering" comes to mind.  Debt 

collectors are masters at this.  The more obtrustive they are the easier they scare the person on the other end of the telephone line.   How do you handle them ?   Stand up and be counted.  Get their name, their company name and telephone number.  In a calm voice you tell them that you do not know what they are talking about and that you need everything they say in writing. "Send me and email"   "Sorry I did not hear you - you cannot send me an email ?"   "Sorry that is the only way you will communicate with me - I need to be able to identify you"...............Click.........Either they will put the phone down or you do so.    You have taken away his only weapon : The telephone. Do not engage with them on the phone- do not respond to sms's.    Any creditor must send you a notice required by law in terms of the National credit act before they can issues summons.  You are awarding them the opportunity to communicate with you via email.  If they refuse you are within all your rights to refuse to speak to them.  

To conclude :   Change your role from Victim to aggressor.    

Accept that you are dealing with a bully - they will back down if you stand on your rights

Do not feel intimidated because you are speaking to a debt collector - there are reasons for you situation and the other party must either understand that or leave you alone.  That is why you must insist on everything in Writing !   Everything does not mean something - It means everything .

Human Error vs Malicious Intent

Some recent events have highlighted the shortcomings of various systems regarding the money of debtors.  Debtors are given debt based upon their ability to repay.  Or would I rather say that is what is supposed to happen.  Creditors should ask themselves a few questions before extending credit :
Is the state of the economy such that debtors will be able to sustain their repayments by keeping their jobs.   Can the debtor pay?  This is where afforability assessments are crucial. Will the debtor pay ? Checking of credit records and credit profile are applicable. If all else fails - will the creditor have security that can be monetized to recover some damages ?

It is recognized that a proper credit industry will have all these things in place.  Unfortunately they do not - Not by a long shot.

So what happens in practise ?

Creditors do not have an ethical code of conduct. If you ever find one please send me a copy.

They will do anything to make money.  Greed is the word . Need I quote more than the recent Lewis stores debacle, & the recent court case regarding the salary emoluments in the Cape ?

If you follow court cases regarding debt recovery you will find more often than not that banks issue required notices in terms of the NCA to the wrong addresses  They always claim this as human error just like Lewis is now claiming human error in their wrong doings with clients. How do you spell "human error"  - I spell it "malicious intent"

Just remember that most judgments about debt are by default. That means that the action was not defended.  I am prepared to bet you a fine dollar that in most cases the notices and summonses were intentionally sent to the wrong address knowing full well that if the client does not know of the impending action they will not respond and will not defend.

Here is a scenario that proves what I am saying.  I changed my chosen domicilium address in writing in October 2010.   The bank acknowleges the change by stamping a copy of the letter at a branch. Standard operating procedure apparently requires of them not to do anything about this.
In 2014 they sent a 129 notice to a 10 year old address - not the previous one on record - actually not on record at all.  They issue summons at the same address.  They send the Sherrif to the same address and get a nulla bona ( no loose assets to attach) They get a judment and put the house up for auction.
They claim "Human error"  I claim Malicious intent. ( a friend saw the sales advertisement in the newspaper and informed me )

This case proves beyond any reasonable doubt that there are systems and standard operating procedures in place with (especially banks) creditors to ensure that they get their judgments by hook or by crook with the emphasis on CROOK.

(P. The judgment was rescinded by the bank - costs for their account)

An open letter & a challenge to Johan Burger

Johan,  You are the heir apparent to the throne of  the FirstRand group. In October you are taking over the reigns and everything will change. Or apparently not. According to press reports you will not bring about much change to the success formula of the group.  That is fine and will most probably see them growing better than the banking fraternity in South Africa as has happened over the past 5 years.  It will however not propel the company from mediocre to great  

You are most welcome to stop reading right here and now. Or you might just want to take note of some points I am trying to make:

A while back I wrote an article on one my blogs called Life lessons : From mediocrity to greatness. and I listed the following :

•         Mediocre says   “Do it Someday” Greatness says “Just do it and do it Now”

•         Mediocre says  “There are Things to do and They must do it”   Greatness says:      "This is what needs to be done and I will do it". 

Banking I believe is the core business of FirstRand.  I have a small business account with FNB and I would like to stress this very clearly here: My personal experience with the Bank can only be descibed as stunning !.  Maybe because I do not owe the bank any money. I only contribute a measly R200 per month to your gross income.  I recently went into my local branch and was served with a smile and I was on my way in 2 minutes. Stunning !  Living up to the slogan "How can we help"  I told them and they helped me.

If this was the experience of all your clients it would be absolute bliss and can propel the bank into the Greatness arena overnight.  Unfortunately this is not the case.  Clients owing the bank money and coming under financial stress does not find solutions to their challenges when walking into a branch let alone trying to sort out a problem over the phone.  Heaven forbid.  

Imagine this scene :  The client walks into a branch - pick up a ticket to see a consultant and (sometimes) are being ushered into a seat in front of one of them.  Big smile......Good morning sir, how can we help - stunning - living up to the slogan.  HI there, I am Joe Soap and have a home loan with the bank and I am currently 3 months in arrears.  I have had these unfriendly phone calls from, I presume a call centre agent and I would like to see your manager about this. - Do you think that is possible?   Sudden change in smile quality. (We are not here to help these fools ).......No we do not see clients for that in the branch...................You have to call.............XYZ at this call centre number......................

This is the basis of why I am writing this letter to you.   Would you take the challenge to become a modern day Gengis Khan ?  One that think outside the box.  Do things no one has dared before? Do some things everyone says is doomed and will not work ?  At the time of his death Gengis Khan controlled an area larger than Africa whilst all he started off with was a group of nomads. - pretty much like the nomads you have in your collection departments.

What are these things I am talking about ?   Finding a way of assisting clients in distress within a system that recognize their human existence.  Come up with a solution that will see them through this difficult time. Offer possitive encouragement and guidelines. All in an evironment that is in line with your slogan "how can we help?"   We as concerned consumers have been trying to talk to the banks about this but the only thing banks are interested in is their archaic collection systems utilizing call centres, attorneys and selling off bad debt to unscroupelous debt collectors.  

As a group of concerned consumers we would like to talk to you PERSONALLY about our suggestions which we will offer to you free of charge .  All we ask is that you TALK TO US. And just maybe You and I (referring to the concerned consumers group) will work out a world class solution .

IT IS A NEW DAY – HELP IS ONLY A PHONE CALL AWAY !

IT IS A NEW DAY – HELP IS ONLY A PHONE CALL AWAY !

The institute of Debt Management

The institute is up and running.    

Watch out for our interactive website that will soon be available

Our team consists of the Chairman (an ex banker with more than 40 years banking service)

A firm of expert lawyers that are prepared to take on any bank and experts in the field of sequestration and insolvency.

An expert debt counsellor

A team of financial advisors ( registered with the FSB)

A team of training experts in the field of budgeting ( this is where it all begins – proper financial education) watch the press for details for upcoming seminars.  Interactive courses soon on our website

For now direct all enquiries to johnbrandow@mweb.co.za   Tel  082 222 5002 

Consumers guide to Prescribed debt and what to do when confronted with a threat of collection.

SEE ALSO : HOW TO HANDLE DEBT COLLECTORS ON THE RIGHT HAND SIDE OF THIS BLOG

The national credit act 34 of 2005 governs the processes and legal issues and rights of credit providers and consumers alike.  On 13 March 2015 an amendment was implemented to this act that has far reaching implications for Credit providers and consumers alike.  The following paragraph is the most crucial relating to this discussion of prescribed debt:

 No person may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies— which debt has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969); and (ii) where the consumer raises the defense of prescription, or would reasonably have raised the defense of prescription had the consumer been aware of such a defense, in response to a demand, whether as part of legal proceedings or otherwise.’’.

This in effect makes a criminal offence should a debt collector try to collect on this debt

Getting back to the Prescription act the following needs to be noted : ( for the purpose of this discussion I am not going into legal arguments about the act and this will suffice for now to initially determine the actions of CONSUMERS in cases where they are hassled by debt collectors. )

The act describes the specific debt that prescribes after specific time. The ones that we are not going to discuss here are debt covered by a mortgage bond, debt owed in terms of a judgment, debt owed to state departments and tax

The ones that create the most problems are amongst others the following:

1.    Personal loans and other forms of loans

2.    Credit cards

3.    Store accounts

4.    Gym membership

5.    Cell phone contracts

6.    And basically any other unsecured debt ( Debt where there are surety signatories are also unsecured and the rules will also apply to sureties )

The definition of prescription in layman’s terms is that should the last payment on this debt be more that 3 years old it has prescribed.  If an acknowledgement of debt has been signed since then the debt will only prescribe after 3 years from date of last payment on this “new debt”  If no successful legal action have been taken on this debt during the past three years the debt has prescribed.  Lawyers letters, s129 notices , threats and telephone calls and emails or letters from the creditor or an agent on his behalf(debt collectors or attorneys alike) does not stop prescription!

Actions of consumers when confronted with a telephone call from a debt collector

1.       You answer the call.
2. Caller asks you to identify yourself. NEVER DO THIS.  Your answer: “You called me, first identify yourself by giving me the following information: ( Write all this down diligently)  If during this initial discussion the party on the other  side wants to say or ask anything insist on them giving you the details – if this fails JUST PUT THE PHONE DOWN ! – They will soon get the message. 
a. “Give me your full name – spell it for me”
b. “Give me your telephone number”. Repeat to make sure you have it correct
c.  “Give me the full name and location of your firm – spell it for me.”
d. “Give me your email address – spell it for me.”
e. Thank them and say: I will send you an email

2.      

F     Follow up email :

(Compile your email along the following guidelines – You can add or delete whatever you think is applicable)

“Dear sir/madam

             This email is send without prejudice and with all rights reserved.  Nothing contained in this message constitutes an offer, warranty or representation from me. The contents herein are for discussion purposes only. Please note that I claim my rights in terms of  The national credit act 34 of 2005 as amended as well as the Prescription Act, 1969 (Act No. 68 of 1969 as far as might be applicable in this instance.

            Your call to me today refers.

1.       To enable me to properly respond to your call please supply me with details of the alleged debt that your call has relevance to.  Who was the credit provider, how did the debt come about and please supply me with a copy of the original signed credit agreement in this instance (This in terms of NCA 65(4)a & b)

2.     If you are a debt collector please supply me with your council for debt collector’s

     registration number as well as that of your company.

3.    I will need a detailed statement of the account to date hereof.

               

                  This in the first instance

               Greetings,    (Your name)

            Should you receive the requested documents you can now determine whether the debt has prescribed utilizing the definitions given in the first part of this post?  In that instance you send them the following email:

“Dear sir, Madam,

This email is send without prejudice and with all rights reserved.  Nothing contained in this message constitutes an offer, warranty or representation from me. The contents herein are for discussion purposes only. Please note that I claim my rights in terms of  The national credit act 34 of 2005 as amended as well as the Prescription Act, 1969 (Act No. 68 of 1969 as far as might be applicable in this instance.

           

It is evident from the documents you sent me that the debt has prescribed and your attempts at collecting this is an illegal act in terms of the amendment to the NCA that came into force on the 13^th day of MARCH 2015.  Please confirm to me that you will now stop harassing me with this issue. Failure to do that will force me to report your actions to the council for debt collectors and lay a charge against you with the South African police.

(if they did not supply you with their relevant registration numbers you can add the following)

Your non conformance to my request for your relevant registration numbers with the council for debt collectors are in breach of your service level agreement with the council and will also be mentioned in my complaint to that organization

Greetings, (Your name) “

One man's opinion on Life and Debt

The concept of debt is older than the written word.  I am reading an interesting book called

“Debt the first 5000 years” and on the first page I had a few revelations: (These are not something new yet we need to take cognizance of it)    Here they are in no particular order   ”If you owe someone money he owns you “    “You have enslaved yourself”    “You are going to regret this”    “You will be treated as secondary to the lender”  “There is no such thing as an ethical lender”

The reason for these posts are to enlighten debtors (that is you if you owe someone money) on some of the revelations I am on about and the first of those is this one “There is no such thing as an ethical lender”

Never ever think any of the slogans of any of the banks have your best interest at heart.  It does not.

If you ever feel abandoned the only thing you have to do is to miss a payment on a loan and see how many people will actually WANT to talk to you. 

Banks are Businesses. Businesses are in business to make money.  Everything else is secondary. They will do anything (UN) ethical in the process.   The African Bank debacle in South Africa is a classic example.

They enslaved hundreds of thousands of the poorest of the poor by LENDING THEM MONEY at the most ridiculous interest rates and then utilize a system called Salary emolument orders which is a (i)legal  and a most (un) ethical  system enforced through   (un) ethical bank staff, lawyers and courts in South Africa.

I read an article this morning by a lady by the name of Theda Muller called “When in debt, giving up is not an option”

She had the best of intentions  writing this.  I agree with around 90% of what she says. But and as far as I am concerned a “But” supersedes everything said before.   She is a bit out of feeling with reality.

The  MAIN problem I am having is this :   She wants you to trust your creditors and that is like standing in front of the bull and saying:   You are not going to charge me and then bend down and look him straight in the eyes.

Accept that they do not have your best interest at heart. They will stoop down to the lowest of low to get their money back.

I do not profess you should not talk to the bank when you are in trouble.  But be wary – You are looking into the eyes of the bull.

“ Dear Joe, we (do not) understand what you  are going through. Please fill this document out and we will present it to credit management and get back to you soon” The document has to be signed and contain clauses like “if I default again I consent to judgment”  “We do not have to give you any further notice”  “ I consent to you taking my vehicle back without further documentation”  There are a few 100 more of these legalspeak and (UN) ethical bankspeak clauses around. 

Life happens and so does challenges. Whoever said challenges comes in ones. It comes in pairs, in tens or even worse.   You lose your job, You get sick and use up your sick leave. And all your annual leave. All that is left is unpaid leave.  You get a new job at much less salary as before. You are the victim of BEE.  Etc. etc. 

The bank (might) believe you once. And offer you some relieve (on their terms of course) They might even believe you twice – if you bend down low enough and take a while to get up from your knees .

But life happens. 

I am not purporting to have the solutions -  I am stating the challenges that we need to find solutions to.