You don’t have to pay old or prescribed debt!
I have written and spoken on this issue many times over the past few years, especially because debt collectors, creditors and banks are still harassing consumers for debt which has, according to the Prescription Act and the National Credit Act, prescribed – and therefore cannot be collected.
In most cases, after three years, prescribed debt does not need to be paid.
Your debt is seen as prescribed if:
– you have not acknowledged it, either verbally or in writing in the past three years
– you have not made a promise to pay, asked what the debt amount is, or paid even the smallest amount towards this debt within the past three years
– and when your creditor has not taken legal action against you (summons, judgement) for this debt within the last three years.
Debts which DO prescribe after three years include:
– store and retail accounts
– cellphone accounts
– credit cards
– personal loans
– gym memberships
– vehicle finance
Debts which DO NOT prescribe after three years include:
– Home loans (30 years)
– Court-ordered debt (judgements)
– SARS taxes
– traffic fines
– TV licences
– Municipal debt (rates and taxes)
– What debtors should know
If your debt has prescribed and debt collectors call you after many years for payment on a personal loan, credit card, gym memberships from years ago, then in all probability the debt collectors or debt collecting agencies are collecting the money for themselves and not your original creditor.
At this point in time, most credit providers have written off the debt, and have simply sold it to the debt collectors for a few cents to the rand.
Often debt collectors will call you out of nowhere and inform you that you owe them an astronomical amount that you have no idea about. Jy skrik jou boeglam!
Some of these unscrupulous debt collectors go bos with adding interest and additional costs, and tell you that you have to pay this, knowing full well that the debt is prescribed and that you don’t have to pay it!
In 2015, amendments to the National Credit Act made it unlawful for any credit provider or debt collector to sell, or to try and collect payment, on prescribed (old) debt.
Recently in its 2021 Annual Report, the Ombudsman for Banking Services (through a case study) also said that it was illegal for debt collectors, banks and other creditors to collect on old, prescribed debt.
Yet they still do it. It’s disgusting!
And they are unrelenting in their drive to illegally collect payment on old debt.
Most debt collectors get commission when they get you to make payment.
Often they will tell you that if you pay just a R20 or a R50 on this old debt, legal action will be stopped.
This is a lie, and a disgusting tactic that consumers should avoid falling prey to.
Remember, when they get you to acknowledge old debt and you pay even the smallest amount on it, then you revoke your prescription, and that means that you are now liable for the entire amount all over again.
The best thing to do is to tell the debt collector that you don’t acknowledge this ALLEGED debt, as it is prescribed.
You can also ask them for a full statement of your account and tell them to show you where you made payment in the last three years, or they must give you proof of legal action taken against you.
If they can’t do that, then inform them that you know that this debt is prescribed and tell them to stop harassing you.
Also, get an email address and put this in writing. If they don’t stop, report them to the Debt Collectors Council.
It is also illegal for old/prescribed debt to be listed at the credit bureaus.
If you come across a prescribed debt on your credit report, take it up with the credit bureaus.
It must be written off by the credit provider and removed from your profile.
Mense, please do not view the above information as encouragement to ignore or not pay what you owe.
Paying your debt is the right thing to do, especially if you can afford it.
But many people are struggling to survive and can’t even afford paying their current debt, buy food or electricity, much less service their old debt, which in many cases, they don’t have to pay.
I am now nicely gatvol of these debt collection agencies and others who have bought “old” debt from the original creditor (sometimes for a mere 4cents to the rand) and then lie, harass, threaten and intimidate vulnerable consumers who don’t know their rights.
Please keep this article. Read from it when they call you and ask you about prescribed debt.
Tell them Moeshfieka Botha told you that you have rights.
If your old debt is prescribed (as per the points above) then you don’t have to pay it (if you can’t afford to), you don’t have to endure harassment and you can have it removed from your credit profile.
Tell them they may not earn commission by illegally – in contravention of the National Credit Act – collect on your “old debt”.
They should BUGGER OFF! Soentoe! Af van die yaardt!
We have rights! We should start enforcing them.
Watch the Daily Voice Facebook space – I am going to do a live video on prescribed debt soon!