Bill to deal with debt collection issues

October 28th, 2015
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Mapula Thebe - editor

Mapula Thebe – editor

The flagrant abuses prevalent in the collection of debts have been widely reported in the media with recent cases highlighting attorneys’ involvement in such matters. These issues have plagued the debt collecting industry.

Government believes the existing legislative framework is inadequate in ensuring that debts are recovered in a fair and efficient manner where there is proper control and oversight. It also believes there is a disparity in the tariffs charged by debt collectors and attorneys conducting debt collection.

The draft Debt Collectors Amendment Bill 2015 has been tabled for commenting. Comments are to be submitted to the Justice Department by 30 November. The Bill, inter alia, seeks to amend the Debt Collectors Act 114 of 1998 (the Act), so as to insert certain definitions and make the Act applicable to attorneys who conduct debt collecting.

In terms of registration of attorneys as debt collectors s 8A will be inserted in the Act, which states:

‘(1) Subject to subsection (2), as from a date fixed by the Minister by notice in the Gazette, published at least 180 days before the date referred to therein, no attorney, employee of an attorney, or agent of an attorney, shall act as a debt collector unless he or she is registered as a debt collector in terms of this Act.

(2) The provisions of this Act shall, in addition to the provisions of the Attorneys Act, 1979 (Act No. 53 of 1979), where applicable, apply to an attorney contemplated in subsection (1).’

The amendment Bill addresses issues of dishonesty by amending s 10 of the Act by the addition in subs (1) of the following paragraph:

‘(c) in the case of an attorney if he or she has been found guilty of unprofessional or dishonourable or unworthy conduct in terms of section 72 of the Attorneys Act. 1979 (Act No. 53 of 1979).’

Further s 15 of the Act is substituted with the following section:

‘…

(5) If an attorney contemplated in section 8A, is found guilty of improper conduct, the Council shall, within five working days of the finding, in writing, inform the law society having jurisdiction of such finding and penalty.

(6) The law society must cause further steps to be taken to determine whether the attorney is still a fit and proper person to continue practising as such.’

On the issue of paying an admission of guilt fine, a number of sections are inserted after s 15, s 15A(6) and (7) pertaining to attorneys states:

‘(6) If an attorney contemplated in section 8A pays an admission of guilt fine, the Council shall, within five working days of the admission of guilt, in writing, inform the law society having jurisdiction of such admission of guilt and penalty imposed.

(7) The law society must cause further steps to be taken to determine whether the attorney is still a fit and proper person to continue practising as such.’

The fact remains; there will always be a need for debt to be collected in society and attorneys play an important role in facilitating this service.

Debt Collecting attorneys should take note of this Bill and ensure that their debt collecting practice is in line with the Bill.

The full Bill is available at http://www.justice.gov.za/legislation/invitations/DebtColBill-Oct2015.pdf

 

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This article was first published in De Rebus in 2015 (Nov) DR 3.