Section 129 notice: Digital delivery now accepted

The Gauteng Court has recently ruled that the digital registered delivery of a Section 129 final letter of demand, is a basis for granting a default judgement if a consumer does not appropriately respond.

Registered letters of demand used to be delivered via registered post to consumers who had defaulted on payments. These consumers could simply turn around and say that they did not receive these notices for payment in the mail.

What is a Section 129 notice?

A Section 129 notice is a letter issued by a credit provider when you are at least 20 days behind on your payments.

It notifies you that legal action will be taken against you if you don’t act on the letter of demand.

The notice gives you three options. You must:

1. Bring your payments up to date; or
2. Engage a debt counsellor; or
3. If you’ve stopped paying due to a dispute with your creditor, you should refer the matter to an alternative dispute resolution agent, consumer court or an ombudsman with jurisdiction.

Part of the process of sending consumers a letter of demand, has conventionally been to send it through registered mail.

Many consumers simply ignored the letter or chose not to sign for it at the post office.

Now, a Section 129 letter of demand through registered email or SMS is more difficult for consumers to ignore. This is because it is delivered through a convenient and accessible channel. It is delivered directly to their mobile number or email address. In other words, it reaches them wherever they are, without the need to visit a post office.

Bradley Gilmour, director at Registered Communication, who was involved in the legal proceedings says the following. “Consumers are more quickly equipped with the information that they need to make payment arrangements with the creditor, avoiding legal costs and adverse credit ratings,” he explained.

The court now ordered that a company could recover its debt from an owing consumer after the latter was alerted through a digital letter of demand.

Gilmour said there had been similar default judgements handed down in the Randburg Magistrate’s Court in 2018. They were the first in South Africa to afford registered digital channels, such as registered SMS and registered Email, the same status as conventional registered letters.

The Registered Communication and one of its software partners, Swordfish Software, a debt collection software provider, hailed the victory which they have obtained.

Gilmour said using a track and trace concept that’s reminiscent of traditional registered mail, his company could deliver an instant electronic certificate and detailed audit report to clients. As evidence that communication had been sent and delivered by SMS or emailed to recipients – with the same legal status as traditional registered post.

“In a recent campaign we ran with a client, less than 3% of their letters sent by conventional registered post had been delivered successfully by the end of the second month. This, while just short of 97% had been delivered, accepted and certified digitally, by the end of the first month” Gilmour said.

Act before a Section 129 is issued

It is undoubtedly better to address issues of skipping payments before a creditor issues a letter of demand. The best way is to speak to a debt counsellor who is registered with the National Credit Regulator (NCR).