Correctional Services said that “matters are under control” at Johannesburg’s Sun City Prison on Wed.
THE days of estate agents and sectional title managing agents collecting debt arrears without being registered as debt collectors are over.
This emerged after Bernard Irvine won a case involving people who stay in sectional title apartments and who were subjected to exorbitant charges for letters and telephone calls reminding them (occupants) to pay their debt arrears.
In a landmark ruling on June 6 last month a committee of the Council for Debt Collectors decided that it was illegal and in contravention of the Debt Collectors Act of 1998 for even an estate agent or sectional managing agents to collect debts without being registered.
Consumers will no longer pay exorbitant amounts for letters and phone calls reminding them to settle their arrears.
Irvine lodged a complaint to the Council for Debt Collectors after he was charged R55 for each phone call Brunell Property Management, his sectional title management agent, had made to him reminding him of his arrears.
It did not matter how long the call took, he was charged R55 whenever he was being reminded of his arrears, said Irvine.
As for letters the company had sent him reminding him of his arrears, Irvine was charged an extra R175, which he had to pay on demand, he said.
Realising that he was being ripped off, he approached the Council for Debt Collectors for help.
Ruling in his favour, the council said what Brunell Property management had done amounted to unscrupulous debt collecting, which would be prohibited once the Debt Collectors Act was enacted.
From April 2006 to October 2008 Brunell Property Management recovered and attempted to recover R55 for each call made to Irvine.
In some instances Irvine was charged R175 for a phone call received from them and was obliged to pay for it, he said.
For letters of demand sent to him he was charged between R125 and R250 a letter, which he said was ridiculous. Advocate A Cornelius found that the public was exposed to abusive practices in cases such as this.
The fee for a letter of demand as stipulated in the Debt Collectors Act is R12,60. But on the contrary, amounts of between R175 and R250 were being charged for letters of demand, said Cornelius.
He said the decision to stop unregistered debt collectors from collecting debt arrears or harassing clients would clearly safeguard the public against any exploitation.
In another case last week the Council for Debt Collectors fined Pretoria-based debt collector Kochnel Bantjes and Partners and two of its directors R1,4million improper conduct.
Kochnel Bantjes and Partners were fined on eight charges of unregistered debt collecting, one charge of failing to register a director and 287 charges relating to the issuing of false emolument attachment orders, allegedly issued by the Johannesburg magistrate's court.
After investigating the council found no files existed for the alleged emolument attachment orders under the numbers reflected at the magistrate's court in Johannesburg.
The total amount to be collected from these emolument attachment orders over a period of time was estimated at more than R3,6million.
The council said Kochnel Bantjes and Partners and its directors were jointly and severally fined R5000 in respect of each of the 287 charges concerning the false emolument attachment orders. The total fine amounted to R1,4 million.
On top of being ordered to pay the R170000, the company was also fined R10000 for being unregistered.
Advocate Jasper Noeth also urged the public to ensure that they understood the protection services offered by the council.
He said if they were not sure of the amounts being claimed by debt collectors, they were free to contact the council on 012-804- 9808 or visit the council's website www.debtcol-council.co.za for more information.