Consumer not liable after three years

2011-02-26 09:19

Consumers have a choice in ­repaying small retail debts that are more than three years old if they didn’t acknowledge or partly pay them during that period.

The Prescription Act makes ­consumers exempt from paying such debts after the three-year period.

But it is not illegal for debt collectors to try and recover the outstanding moneys.

The onus is on the debtor to raise ­prescription as a defence.

Some debt collectors buy debt from credit providers and threaten defaulters with legal ­action long after the three-year ­period has lapsed.

Reana Steyn of the Credit Ombud says debts ­prescribe ­only when consumers do not ­acknowledge them or make any payments during that time.

“If a payment is made, then the prescription is interrupted. It will start running again after the consumer starts to default again,” says Steyn.

A number of consumers have complained about harassment at the hands of debt collectors ­after serving judgment for a ­specific debt.

One reader admitted she ­defaulted on her account with a clothing store eight years ago.

After failing to settle the ­account, her name was listed with the credit bureau.

Early last year, she received a call from different debt demanding payment of the debt.

When she checked her credit profile, it reflected that the blacklisting had been lifted and she has since been evading calls from the debt collectors, arguing that the debt had prescribed.

Steyn says that a judgment granted by a court of law does not prescribe for 30 years, as ­opposed to ordinary debt which could prescribe after three years.

She says consumers should ensure that any summons is served on them directly and not at an old address.

Credit Salvage, a law firm that helps consumers with lifting negative blacklisting, says a ­rescission of judgment is not a complicated process to ­understand.

The lawyers say a judgment can be easily removed when the other party consents in writing.

“Alternatively, a consumer will have to prove that at the time the judgment was entered they were not in wilful default,” the firm says.

According to Credit Salvage, in some courts a defaulter will have to bring a substantive ­application to obtain the ­rescission.

The attorneys charge R1?500 plus VAT for their ­services.

In other courts, a defaulter can approach the clerk for the rescission of judgment and take the document to the creditor to sign and return it to the court for the final process.

The Credit Ombud says it is important to record the ­discussion with debt collectors in ­writing, send a confirmation of address, and note the fact that they will raise prescription as proof of the discussion.

You also need to check credit bureau reports to see if they were perhaps incorrectly listed for a possible prescribed debt.

You can contact the Credit Ombud if you are not happy with the outcome.

» The Credit Ombud can be contacted on 086?166?2837.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.