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All fees
charged have been for the account of the creditor.
Over the past 10 years, credit granters in general have found that the
utilization of third party collection agents is in many instances more effective
than relying on the legal process. The Authorities have finally passed the Debt
Collectors Bill in order to give recognition to the industry, to adopt a code of
conduct and give the collection firm the legal right to charge fees for its
services as allowed in the recovery of debt.
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In August 1999,
the draft Debt Collectors Bill was put forward for Parliamentary debate. The
Bill, which emanates from the South African Law Commission's report on debt
collecting, is aimed at organising and regulating the debt collections industry
by placing it on a sound, statutorily recognised footing.
The provisions of the Bill called for the establishment of a regulatory Council
for Debt Collectors whose members are to be appointed by the Minister of
Justice. Certain powers were therefore conferred on the Council, such as the
withdrawal of registration certificates, the drafting of a code of conduct for
debt collectors, and the imposition of fines on debt collectors found guilty of
misconduct.
All persons operating as debt collectors as defined by the Bill must register
with the Council and pay subscriptions. Non-registration by debt collectors
will constitute a criminal offence.
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