There is a special circle of hell reserved for debt collectors. The vast majority of all people who are in debt did not intentionally choose not to pay their bills. They may have encountered a tough period in which paying Edgars ranked lower on their list of priorities than feeding their families. In 2009, I was one of these people (but that is a story for another time).
Yesterday, I received 4 calls from an Attorney looking for a Phillip Van Vuuren to pay his TV license. Before that, I was getting a call a week from this company looking for this man whom I have never heard of. So after politely asking them many times, to remove my number, which I have had for over seven years, from their data base, needless to say, I was not happy. So this is my revenge against ALL DEBT COLLECTORS. So why should you trust what I am saying? Apart from being able to do your own research to confirm what I am saying, and having worked in financial institutions for 14 years prior, In 2011, I started my own Call Centre but encountered tough times with campaigns and products to sell. So I was approached by a major bank regarding a debt collecting campaign. This is how it works:
Did you know that once a debt has not been paid for more than three years, it is referred to as being prescribed debt? Section10 of the Prescription Act reads as follows:
10. Extinction of debts by prescription.—(1) Subject to the provisions of this Chapter and of Chapter IV, a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt.
(2) By the prescription of a principal debt a subsidiary debt which arose from such principal debt shall also be extinguished by prescription.
(3) Notwithstanding the provisions of subsections (1) and (2), payment by the debtor of a debt after it has been extinguished by prescription in terms of either of the said subsections, shall be regarded as payment of a debt.
Basically, what this means is that if you have gone a 3 year period without paying or acknowledging that debt, then the creditor has to write this debt off. You are no longer liable.
Now, what the creditors do in this case, is sell their debt book to third party debt collectors. For example, if Bank A has a list of clients with R5 million bad debt that has been prescribed, instead of writing that R5 million off, they will sell it to a debt collection company (like an attorney) for R1 million to make back some money. That attorney/call centre will then call the people on that debt book and harass, bully and intimidate the people to pay. What ever money they collect, they keep. It does not go back to Bank A. Reason being, Bank A wrote off the debt. This practice is unethical, which is why I rather let my business go under that to participate in this.
Please note, that certain debts take a longer number of years before the debt is prescribed. Bonds/Mortgages for example are 30 years (Section 11 of the Prescription Act clarifies all this)
However, the three year prescription period applies to most other debt. BUT, remember, you will become liable again for that debt should you make even a single payment and acknowledge that debt in any way, like signing a repayment agreement plan or agreeing to something telephonically. So do not do this under any circumstance. And they cannot blacklist you. It is illegal to do so.
So what you should do if you are getting harassed for prescribed debt? You have two options and you can do one, or both of them.
The first, and my personal favourite. Should you get a call from a debt collector, ask them to hold on for a second. Tell them you want to talk to them, but you need to just finish up something first. Then leave your phone one side. If possible, go back every few seconds and tell that person that you are almost done. Just 1 more second. But keep them on the line for as long as possible, before they hang up. You see, the biggest cost in running a call centre is the phone bill. I say, you run that bill up. Let them spend a R1000 calling you to try and collect R500 worth of debt. Put these vultures out of business.
The second, should you choose to go the more legal route, is inform the creditor that the debt has been prescribed. Inform them that you do not intend to sign anything or pay anything. Inform them that if they issue summons, they must do so at your current address and you will defend the summons based on prescription and ask for legal costs against them. Also inform them that listing prescribed debt on a credit bureau is specifically prohibited by the regulations to the National Credit Act and any attempt to list you will result in a defamation of character claim against them.
Enough is enough!