Frequently asked questions on Debt Collection

by | Jun 5, 2020 | Personal Finance

Here are the most frequently asked questions on Debt Collection:

Q: Debt collectors can be very scary – but what rights do consumers have when it comes to debt collectors. What are the do’s and dont’s of debt collection?

A: Well, let’s start at the beginning: Debt Collection is categorised by an attorney; a person who is an agent of an attorney; or a registered debt collector collecting on behalf of the credit provider. The collection is typically the outstanding amount plus lawful interest, admin costs and collection fees, which by law is capped to certain amounts.
Often you will hear the collector mention ‘their added fee’. While this is allowed, the collector must be registered with the Debt Collectors Council if they are charging you. To check if your debt collector is registered.

Debt collectors are also NOT allowed to:

  • Physically threaten you or your family in any way.
  • Serve falsified legal documents.
  • Use force or threaten force against you.
  • Charge more than the Council outlined tariff fees.
  • Spread or threaten to spread any fake information about your credit worthiness.


“With rights come responsibility and as a consumer you should not pay over your money to any debt collector unless they are registered with the Council for Debt Collectors,” added the Council for Debt Collectors (CDC).
While debt collectors are within their right to contact you, should you feel that the collector is rude or is harassing you, you can report them to the CDC.

“The Council has powers to investigate the matter and can act by closing down the company or imposing hefty fines if they find that the debt collector in question has gone against their code,” added the CDC.
If you are uncomfortable with the debt/repayment amount you are well within your rights to challenge it and request the information in writing.
For any complaints contact the Council for Debt Collectors.
Debt is inevitable. But when the wolves come knocking, make sure you know your rights!


A: Many consumers are not sure about where exactly debt collectors fit in, especially within the legal system. In order to help you understand their role in the system, here are some of the things a debt collector can do.

  • No matter what threats or harassment a collector may put on you, if they are attempting to collect an unsecured loan then they are fairly limited in their legal abilities to recoup the money.
  • If a debt is secured however, collectors can take steps to take back your collateral- whether it be a car or other assets- in order to pay off your debt.
  • Debt collectors have commission based pay, so small amounts may be shrugged off by them rather than fight for repayment. At this stage though, you would just be further damaging your own credit record.
  • They will chase down large debts with relentless vigor. They can and will sue you to recover large debts. They will serve you with a summons that will inform you of all the details of your court appearance.
  • If the collector wins the case, your assets cannot be taken immediately, but only once the court has agreed on and given permissions to the collector. The collector can, for example, ask the court to garnish your salary, withholding a certain amount of your salary to be paid into your debt.
  • The collectors, once having seized assets, can sell them at a public auction with the proceeds being applied to your outstanding debt.|
    The debt collector can put a judgment lien on one of your assets – this means you cannot sell or borrow against the same asset before you have paid off your outstanding debt.


Q: How must a debt collector identify themselves when contacting you?

A: Debt collectors are permitted to contact you by every communication system available – phone, letters, email or text message – but there are rules they must follow or they are in violation of the Fair Debt Collection Practices Act (FDCPA). Those rules include:

  • They must identify themselves as a debt collection agency and give their name and the address for the collection agency.
  • They must tell you the name of the creditor (company or person you owe), the amount you owe and how you can dispute the debt or seek verification of the debt.
  • If the debt collector does not provide verification information on the first communication with you, he must send written notice with that information within five days of the initial contact.

Ask a debt collector
as many questions as you can during the initial contact and avoid saying anything that could be interpreted as admitting you owe the debt.

Q: Can a school hand me over to debt collectors for unpaid school fees?

A: The school does have a right to hand over unpaid fees to debt collectors if a parent has not applied for a fee exemption.The debt collectors are paid a percentage of the amount collected, and they charge service fees for collecting.

Debt collection is regulated by the National Debt Collection Act 114 of 1998. Although debt collectors can charge admin and collection fees, these are limited by law.
You have a legal right to a statement of the amount owed and how it was calculated. It is also possible to ask for a discount on the collection fees and apparently this is often granted, though they can refuse to negotiate.

A student may qualify for a fee exemption if the fees are more than 10% of both parents’ combined annual salary.

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