Debt Collectors: What They May and May Not Do
Debt collectors are regulated by law, and many break it daily: reviving prescribed debt, inventing fees, and abusing garnishee orders. Learn the rules, the 25% salary cap, and where to complain for free.
What it actually is
A debt collector is a person or company paid to recover money you owe someone else. In South Africa this industry is controlled by the Debt Collectors Act (Act 114 of 1998). The Act created the Council for Debt Collectors, and the rule is simple: every debt collector must be registered with the Council. An unregistered collector is committing a crime by collecting at all.
The Act also fixes what a collector may charge. There is an official tariff for fees and expenses, and a hard ceiling: the collector's fees and charges may not keep growing forever. Under the in duplum rule, interest and collection costs may not exceed the unpaid capital amount. If you borrowed R1,000, interest and costs on it can never lawfully push the debt beyond R2,000 plus the capital rules set out in the National Credit Act.
Know who you are dealing with, because different people have different powers:
| Who | What they can actually do |
|---|---|
| Debt collector | Phone you, write to you, ask you to pay. Nothing more. No seizing property, no arrest, no "blacklisting fees" |
| Attorney | The same, plus take you to court, which starts with a formal letter of demand and a summons |
| Sheriff of the court | The only person who may attach property, and only with a court order in hand |
| A "tracing agent" or anyone with a loud voice on WhatsApp | Nothing. Voice notes are not court orders |
One more piece of law you must know: prescription. Under the Prescription Act, most ordinary debts (store accounts, personal loans, credit cards, gym contracts, cellphone accounts) expire after three years if, during those three years, the creditor did not summons you and you did not pay or admit the debt in writing or otherwise acknowledge it. Home loans, court judgment debts, and money owed to last longer (up to 30 years). An expired debt is called prescribed debt, and the National Credit Act says clearly: selling or collecting prescribed debt is prohibited.
How it is used against you
The prescription trap. This is the industry's dirtiest trick. A collector buys a book of ten-year-old debts for cents in the rand. They phone you: "You owe R4,800 from 2015. Just pay R100 today as a sign of good faith and we will make a plan." Here is the trap: that R100, or even saying "yes, I know I owe it", can be treated as an acknowledgement that interrupts prescription and brings a dead debt back to life. The Act says they may not collect it at all, but they rely on you not knowing that. Never pay, never promise, and never confirm an old debt on the phone before you have checked its age.
Invented fees. "Admin fee R350. Tracing fee R500. Reinstatement fee R250. Card fee R60." The Debt Collectors Act tariff sets exactly what may be charged, and most of these invented amounts are not on it. On a small debt, illegal fees often grow bigger than the debt itself.
Fake "garnishee" threats. A real emolument attachment order (EAO) is a court order telling your employer to deduct from your salary. Collectors send letters designed to look like one, or threaten "we will garnishee you tomorrow" to force a payment. The law after the Constitutional Court's 2016 ruling and the Courts of Law Amendment Act is strict: an EAO is only valid if a magistrate (not a clerk) considered it and found it just, it was issued by a court where you live or work, and, critically, all EAOs together may not take more than 25% of your basic salary, and the deductions must still leave you able to live. Old orders rubber-stamped by clerks in faraway towns are exactly what the court struck down.
Harassment. Calls at 22:00. Calls to your boss and your mother "to leave a message about your debt". Threats of arrest ("there is a warrant coming"). Threats to "blacklist your ID so you can never work". All of this breaks the Debt Collectors Act's code of conduct. Owing money is not a crime, and nobody is arrested for a store account. Spreading your debt to third parties to shame you is a violation you can report.
Debit order abuse. Some collectors get your banking details "to send a statement" and then run debit orders you never signed for, sometimes for odd amounts under R100 hoping you will not notice.
How to use it instead
1. Make them identify themselves. Ask for: the collector's full name, the company, their Council for Debt Collectors registration number, the original creditor, the original account number, and a full written statement of the debt showing capital, interest, and every fee. A registered collector must give you this. Check the registration at cfdc.org.za. If they refuse or are not registered, tell them so in writing and report them.
2. Check the age before you say anything. Ask, in writing: "When was the last payment on this account, and when was summons served?" If the answer shows three years of silence on an ordinary debt, reply in writing: "This debt has prescribed under the Prescription Act. Section 126B of the National Credit Act prohibits its collection. Do not contact me about it again." Keep a copy. Do not pay "just R50 to close it".
3. Attack invented fees. Ask for the breakdown against the official tariff. Dispute anything not on it, in writing, and complain to the Council. Interest plus costs beyond the capital amount breaks the in duplum rule; say so.
4. If money is already coming off your salary. Ask your payroll office for a copy of the actual EAO. Check: which court issued it, is that where you live or work, did a magistrate authorise it, and are total deductions within the 25% cap. If anything fails these tests, you can apply at that Magistrate's Court, with help from Legal Aid SA for free, to have the order rescinded or reduced, and wrongly taken money can be claimed back.
5. If the debts are real and drowning you: debt review. Debt review (debt counselling) under the National Credit Act is the lawful lifeline. An -registered debt counsellor restructures all your credit agreements into one affordable payment, interest can be renegotiated, and while you are under review, creditors cannot take new legal action against those debts. Fees are capped by the . Use only counsellors registered at ncr.org.za, and be careful of "debt rescue" adverts that charge upfront and do nothing. Debt review is for people with income; if you truly cannot pay anything, get advice from Legal Aid SA before signing anything.
6. Stop the harassment formally. Keep a log: dates, times, numbers, what was said, screenshots. Send one written demand that contact happen in writing only. Then lodge a complaint with the Council for Debt Collectors (for collectors) or the NCR (for credit providers and debt counsellors). The Council can fine collectors and take away their registration; it does this because people complain.
7. Never pay into a personal bank account. Real collectors use company trust accounts and give receipts. "Pay my FNB eWallet before 5pm to stop the warrant" is a scam sentence, every time.
Where to go
- Council for Debt Collectors — check registration and lodge complaints: cfdc.org.za, 012 804 9808
- National Credit Regulator (NCR) — prescribed debt, debt review, credit complaints: ncr.org.za, 0860 627 627
- Legal Aid South Africa — free help with garnishee orders and court papers if you qualify: legal-aid.co.za, 0800 110 110
- Credit Ombud — free disputes about credit bureau listings and non-bank credit: creditombud.org.za, 0861 662 837
- Department of Justice — Magistrates' Courts and rescission procedures: justice.gov.za
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