Publications
Partners
[http://www.shutterstock.com]
Cape Town - Cosatu secretary in the Western Cape Tony Ehrenreich has called for a change in regulation to stop the reckless lending of credit to workers in a studio interview with Fin24.
The selling of debt to people has become a major industry, but it clearly has a huge impact on workers, said Ehrenreich.
He warned this is also going to spill over onto employers.
"We have got to find ways to intervene before it becomes a crisis, including ensuring that people are clued up as to what their rights are in respect to garnishee orders and the cost that are charged to them."
He said this will require employers, workers, unions and the government to work together.
Ehrenreich suggested some kind of specialised knowledge at companies where employers have the capacity to guide employees about debt.
"The unions have to play a greater role in making sure that their members are aware of debt management and debt issues generally," he said.
He also urged for a change in regulations to help stop the wanton sale of debt to people.
Ehrenreich said workers just generally pay garnishee orders once there is a court order. He said workers often don't keep track of the deductions until the amounts start exceeding what they are able to survive on.
"Then it becomes an issue and it becomes all of our problem."
Zack King from Debt Free SA said at the moment banks are collecting a lot of money through the garnishee system.
Fake garnishee orders doing the rounds
He also warned about fake and illegal garnishee orders.
"There is a wave of fake garnishee orders going around, but employers are becoming more alert."
When people have garnishee orders they often roll on for years, said King.
"You are getting people who are paying beyond the limit of what the National Credit Act says," he said.
Kem Westdyk from Summit Garnishee Solutions said there are huge gaps in the system.
"A garnishee order does not have an end date on it.
"The garnishee order merely says that the employer must deduct a certain amount each month until the debt has been paid".
He urged employers to put measures in place to assist workers in dealing with their debt.
- Fin24
The selling of debt to people has become a major industry, but it clearly has a huge impact on workers, said Ehrenreich.
He warned this is also going to spill over onto employers.
"We have got to find ways to intervene before it becomes a crisis, including ensuring that people are clued up as to what their rights are in respect to garnishee orders and the cost that are charged to them."
He said this will require employers, workers, unions and the government to work together.
Ehrenreich suggested some kind of specialised knowledge at companies where employers have the capacity to guide employees about debt.
"The unions have to play a greater role in making sure that their members are aware of debt management and debt issues generally," he said.
He also urged for a change in regulations to help stop the wanton sale of debt to people.
Ehrenreich said workers just generally pay garnishee orders once there is a court order. He said workers often don't keep track of the deductions until the amounts start exceeding what they are able to survive on.
"Then it becomes an issue and it becomes all of our problem."
Zack King from Debt Free SA said at the moment banks are collecting a lot of money through the garnishee system.
Fake garnishee orders doing the rounds
He also warned about fake and illegal garnishee orders.
"There is a wave of fake garnishee orders going around, but employers are becoming more alert."
When people have garnishee orders they often roll on for years, said King.
"You are getting people who are paying beyond the limit of what the National Credit Act says," he said.
Kem Westdyk from Summit Garnishee Solutions said there are huge gaps in the system.
"A garnishee order does not have an end date on it.
"The garnishee order merely says that the employer must deduct a certain amount each month until the debt has been paid".
He urged employers to put measures in place to assist workers in dealing with their debt.
- Fin24
