Many rental collectors illegal

Pretoria - Estate agents and sectional title managing agents must be registered as debt collectors before they can collect rental arrears, the council for debt collectors said on Wednesday.

"If they do so they are acting illegally and are contravening the Debt Collectors Act," chairperson Jasper Noeth told a media briefing in Pretoria.

He said on June 6, a council committee made a landmark ruling that estate agents and sectional title managing agents cannot collect arrears without being registered as debt collectors.

He said it was pointed out that when estate agents and sectional title managing agents recover rentals and levies in arrears, they were collecting debts as defined by the Debt Collectors Act.

They were thus acting as debt collectors and must be registered with the council for debt collectors.

The ruling means agents would be subjected to the council's prescribed fees.

"This decision will undoubtedly safeguard the public against any possibility of exploitation of fees asked."

He said it has been found that exorbitant fees were being charged and the public was exposed to abusive practices.

"The prescribed fee, as stipulated in the Debt Collectors Act, for a letter of demand is R12.60," he said, mentioning a case in which amounts of R175 to R250 were charged for letters of demand.

He said during the past financial year the council had received numerous complaints about debt collecting and had acted on these matters in a fair and responsible manner.

In one case the council found that 287 false emolument attachment orders were issued and no files existed at the magistrate's court where the orders were supposedly issued.

An emoluments attachment order is issued by a court to a debtor's employer directing that a specific amount of the employee's salary be paid directly to the creditor.

The debt collectors concerned were found guilty and would be sentenced soon. The total amount to be collected in terms of these orders, over a period of time, amounted to more than R3.6m.

"In various disciplinary matters it was found that the public had been overcharged with fees.

"In these cases the disciplinary committees of the council ordered a repayment of the amounts overcharged to the debtors concerned. The amounts to be repaid varied from R30 000, R25 000, R10 000 and numerous smaller amounts."

The council for debt collectors was created by Parliament to protect and inform the public about their rights in terms of the Debtor Collectors Act.

The council exercises control over debt collectors in their interaction with the general public.

- Sapa