Debt Collection - know your rights

Debt Collection — know your rights!

Rising interest rates and an uptick in inflation are squeezing South African consumers between the proverbial rock and hard place, as the cost of servicing debts goes up while the purchasing power of their money declines.

The most affluent consumers in South Africa have the highest increasing default loan rate. Experian Consumer Default Index (CDI) statistics reveal a rapid increase in the rate of people who defaulted on their loans in the fourth quarter of 2021.

“The most affluent consumer group, the luxury living segment, makes up 2.5% of the South African population, yet accounted for 35% of total credit exposure in 2021 Q4 [quarter 4],” explained Jaco van Jaarsveldt, the chief decision analytics officer at Experian Africa. South Africans are struggling with their debt, causing them to default. Considering this, it’s safe to assume that more people are going to be receiving those dreaded phone calls and letters from businesses they owe money to.

When your bills outweigh your income and the debt collectors won’t stop harassing you, what do you do? 


The National Debt Collection Act 114 of 1998 regulates the process of collecting debts in South Africa.

Debt collection is when an attorney, a person who is an agent of an attorney or a registered debt collector collects, on behalf of the credit provider, an outstanding amount plus lawful interest, admin costs and collection fees, which by law is capped to certain amounts.

If a debt collector charges for their services, they must be registered with the Debt Collectors Council.  A debt collector is not allowed to:

  • Use force or threaten to use force against you or your family.
  • Physically threaten you or your family.
  • Give, or threaten to give, information to the consumer’s employer that may affect their opportunities as an employee.
  • Serve any false legal documents.
  • Present themselves as police officers, sheriffs or officers of the court.
  • Spread, or threaten to spread, any false information about your creditworthiness.
  • Charge more than the fees set down by the Council.


It is important to know exactly what the role of the debt collector is. They are tasked with collecting money and usually have no interest in your circumstances. It’s simple; your account has been handed over to them to recover the money you owe the credit provider. They are paid a percentage of the amount collected while charging service fees for doing so.


A debt collector can only collect the capital amount of the transaction; lawful interest; and his or her administration fee and expenses. The fees are structured by the National Council for Debt Collectors.


It is important to first verify any claims made by debt collectors. For claims about consumer finance, including personal loans, credit cards and store cards, you have a legal right to a statement of the amount owed and how it was calculated. If a debt collector refuses to send you copies of loan documents or statements for an alleged debt, you have the right to complain to the Debt Collectors Council. You are also entitled to refuse to pay anything until they give you details in writing and supporting documents to their claim.

Always remember that you should not sign an admission of liability, or consent to judgement, an emoluments attachment or garnishee order.

One of the biggest mistakes consumers make is waiting until the last moment before starting the communication process. Consumers should rather be transparent with their creditors from the moment they sense a crisis is on the way. With the right approach at the right time, more affordable payment plans can be arranged. In this regard, consumers should be encouraged to consider debt counselling which can assist with debt restructuring and re-negotiating instalments and interest rates.


  • To avoid getting blacklisted, you should not avoid unpaid bills with your creditors. Instead, if you are unable to make a payment, rather than let a debit order bounce, or not pay your account at all, make contact with the creditor.
  • Communication and transparency can prevent blacklisting. Explain what’s happening to your creditors, and make sensible and affordable arrangements to try and achieve an up to date account.
  • When you make contact with your creditor and explain a serious situation to them, most of the time they will be willing to help you handle an emergency. This is especially the case if your account is generally in good standing and they can see it’s an exception. On the other hand, leaving the situation by ignoring phone calls and messages from your creditors is not the way to go if you want to avoid getting blacklisted and losing a healthy credit score.
  • Talk to DebtCare about debt review. Once you have started the process of debt review you are legally protected against debt collectors.


Debt review is, in essence, a legal process providing the consumer with all the legal protection he or she needs. At at the same time provides credit providers with a collection method that does not alienate consumers, but provides them with a solution. Debt counsellors like DebtCare negotiate on behalf of the consumer with all their credit providers to determine the right amount to be paid back to these providers, which is not only affordable to the consumer but also fair towards the credit providers.

During the negotiation process, the debt counsellors will reduce the monthly payments towards the credit providers to a more affordable repayment amount by extending the repayment terms. This ensures that the consumer has sufficient funds remaining to cover his living expenses, such as rent, transport, utilities, food, school fees, and so on, which provides the consumer with the financial relief he or she seeks.

The final step is for the debt counsellor to formalise the rearrangements by obtaining an order to restructure the debt in line with the proposed offer amount.

A copy of the order must be served on the credit providers, who must restructure the debt in line with the granted court order.

If you have been receiving letters and calls from your creditors or debt collectors, talk to a qualified debt counsellor at DebtCare. We will evaluate your current financial situation to see if debt counselling is the right fit for you.


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