Have you (or someone you know) been contacted by a debt-collecting firm about an old debt for which they’re now demanding payment? Are they claiming that the outstanding balance has increased significantly, due to the accumulation of interest and other charges? Be warned that many of these collecting companies have a track record of using bullying tactics to illegally collect amounts for which you may NOT be liable.

Firstly, the Law of Prescription (1969) protects any debtor from having to pay a debt which has been dormant for more than three years. This means that if the debtor has not acknowledged the debt (by signing an acknowledgement or making a payment) AND the creditor has not obtained judgement for that debt within that three-year period, the debt has legally lapsed and the debtor cannot be held liable for payment.

Secondly, Section 103(5) of the National Credit Act (2005) limits the amount to which an outstanding balance can increase. In brief, this means that a creditor cannot add interest and charges that exceed the amount that was outstanding at the date that the debtor defaulted on the debt. For example, if you owed R5 000 on an account and stopped paying the creditor, that creditor is legally not allowed to add more than another R5 000 in interest and charges, so the total balance that they can demand from you cannot exceed R10 000.

These are not suggestions which a creditor can choose to apply if they feel like it ; These are LAWS. Unfortunately there are creditors and debt collectors who take advantage of the fact that it’s unlikely that the proverbial “man in the street” will know all of his legal rights. It’s ironic that, by demanding payments to which they’re not entitled, THEY are effectively stealing from these debtors.