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Guide to dealing with Debt Collectors

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June 5, 2009

With the unstable financial markets and the global credit crunch, many consumers default on their debt and end up having to deal with Debt Collectors. Should the situation arise, ever wondered what rules these normally unfriendly guys operate under? It always seems as if they are a law on their own. “Their money or your soul”. Don’t think a debt collector has the right to do what he or she wants. If they behave in an unlawful way, you can report them to the Council of Debt Collectors and get them sorted. Thanks to the National Credit Acts, there are a set some rules and guidelines with which Debt Collectors operate.

Here are a set of rules Debt Collectors need to bear in mind while doing their collection business.

All debt collectors have to be registered and are obliged to follow a code of conduct. The most important aspects of the code of conduct are:

No debt collector may lie or misrepresent any fact with the intention of benefiting the creditor.

The debt collector must respect the confidentiality and privacy of any information supplied by the debtor. However, the debt collector may furnish information to a credit bureau but must ensure that such information is true and verifiable.

A debt collector may not take any action against a debtor that humiliates, threatens or causes distress.

A debt collector may not threaten violence or harm the debtor, or those related to him or her or their property.

A debt collector may not abuse or intimidate a debtor in any manner whether orally or in writing.

A debt collector may not, when calling on a debtor, park in front of a debtor’s residential or work address in any way that discloses his purpose and cause embarrassment to the debtor.

A debt collector may not make an excessive number of telephone calls or engage in any conduct so as to constitute harassment of the debtor.

A debt collector may not make telephone calls for purpose of demanding payment on a Sunday or between 9pm and 6am unless requested by the debtor.

A debt collector may not collect any monies in excess of the amount owing by the debtor, except for interests and costs.

A debt collector may not use obscene, defamatory or threatening language when communicating with debtors.

A debt collector may not communicate with a debtor’s employer before judgment has been obtained against the debtor, except for purposes of verifying employment status and earnings. In communications with friends, relatives and neighbours, only the debtor’s address or telephone number may be obtained from them.

No debt collector may give any person false or misleading information that is detrimental to a debtor, his or her spouse or member of his family. Nor may such information be given if it adversely affects his employment or employment opportunities

A debt collector must ensure that a claim is handled in an exemplary manner, professionally and fairly and in accordance with highest moral standards.

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 is calculated under the Credit Agreements Act (No 75 of 1980) and the Credit Agreement Amendment Acts (No 9 of 1985 / No 53 of 1987 / No79 of 1995)) as well as under the National Credit Act (Act 34 of 2005).

If a debt collector refuses to send you copies of loan documents or to account for an alleged debt, complain to the Debt Collectors Council on Tel : (012) 804 9808 or (012) 804 3402 or the Association of Debt Recovery Agents ((011) 333-4335 or (011) 787 3838 Fax: (011) 333-6960, or lastly to the Consumer Affairs Provincial Department or agency in your province. For more information,

Call 0860 627 627 Visit www.ncr.org.za

Source: MoneyBiz