Paying debts is something which, sometimes, doesn’t come easily – and this may be for various reasons. Collecting money owed is also something which, sometimes, doesn’t come easily either – and this may also be for various reasons. That is why ‘debt collectors’ can perform an important function in commerce; although, the big guys with baseball bats and brass knuckle-dusters now and again lend a scary image to debt collecting.
The Debt Collectors Act 1998 aims to exercise control over the occupation of debt collectors, of which there can be three types:
- a person (excluding an attorney) who collects a debt owed to one person from the other, and does so for reward;
- a person (excluding someone in a factoring agreement) who takes over a debt in order to collect it for his own benefit;
- a person who is an agent or employee of either of the above debt collectors.
It is an offence to act as a debt collector unless you are an attorney, or the employee of an attorney, or registered with the Council for Debt Collectors in terms of the Act.1
If a company (or close corporation) carries on business as a debt collector, both it and every director, or member as the case may be, and every one of its officers must also be registered with the Council. It is a crime if this provision is not complied with.2
The registration of a debt collector may be withdrawn by the Council, if: he fails to pay the prescribed fees; or he gave false information in the application for registration; or he is convicted of certain offences; or becomes insolvent or insane. If his registration is withdrawn, the debt collector must, forthwith, return his certificate to the Council and commits an offence if he fails to do so.3