Debt Collectors

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.
  1. 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

  2. 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

  3. The registration of a debt collector may be withdrawn by the Council, if: he fails to pay the prescribed fees; or he gave false information in the application for registration; or he is convicted of certain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 If his registration is withdrawn, the debt collector must, forthwith, return his certificate to the Council and commits an offence if he fails to do so.3

  1. Section 25 read with section 8(1). 

  2. Section 25 read with section 8(1). 

  3. Section 25 read with section 18.