Debt Collectors Act [No. 114 of 1998]
REPUBLIC OF SOUTH AFRICA
GOVERNMENT GAZETTE
STAATSKOERANT
VAN DIE REPUBLIEK VAN SUID-AFRIKA
Registered at the Post O&e as a Newspaper As ‘n Nuusblad by die Poskantoor Geregistreer
CAPE TOWN, 27 NOVEMBER 1998 VOL. 401 No. 19525
KAAPSTAD. 27 NOVEMBER 1998
OFFICE OF THE PRESIDENT
No. 1546. 27 November 1998
It is hereby notified that the President has assented to the following Act which is hereby published for general information:-
No. 114 of 1998: Debt Collectors Act, 1998. No. 114 van 1998: Wet op Skuldinvorderaars, 1998.
KANTOOR VAN DIE PRESIDENT
No. 1546. 27 November 1998
Hierby word bekend gemaak dat die President sy goed- keuring geheg het aan die onderstaande Wet wat hierby ter- algemene inligting gepubliseer word:-
2 No. 19525 GOVERNMENT GAZETTE. 27 NOVEMBER 1998
ACI No. 114, 1998 DEBT COL.I.ECTOKS ACT. 1998
GENERAL EXPLANATORY NOTE:
Words underlined with a solid line indicate insertions in existing enactments.
(English text signed by the President.) (Assented to 19 November 1998.)
ACT To provide for the establishment of a council, known as the Council for Debt Collectors; to provide for the exercise of control over the occupation of debt collector; to amend the Magistrates’ Courts Act, 1944, so as to legalise the recovery of fees or remuneration by registered debt collectors; and to provide for matters connected therewith.
B E IT ENACTED by the Parliament of the Republic of South Africa as follows:- Definitions
1. In this Act, unless the context otherwise indicates- “Council” means the Council for Debt Collectors established by section 2; “debt collector” means-
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a person, other than an attorney or his or her employee or a party to a factoring arrangement, who for reward collects debts owed to another on the latter’s behalf; a person who, other than a party to a factoring arrangement, in the course of his or her regular business, for reward takes over debts referred to in paragraph (a) in order to collect them for his or her own benefit; a person who, as an agent or employee of a person referred to in paragraph (a) or (b) collects the debts on behalf of such person, excluding an employee whose duties are purely administrative, clerical or otherwise subservient to the actual occupation of debt collector;
“Director-General” means the Director-General of the Department of Justice; “factoring arrangement” means an arrangement between a creditor and a financier in terms of which the creditor, in exchange for funding, either sells or offers as security, claims against his or her debtors: Provided that such claims are not bad or doubtful at the time they are so sold or offered as security: Provided further that no overdue debt or a claim for which a demand has been made, is part of such a factorig arrangement; “Minister” means the Minister ‘of Justice; “person” includes a juristic person; “prescribe” means to prescribe by regulation; “this Act” includes any regulation or norice made or issued under this Act.
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Act No. 114, 1998 DEBT COLLECTORS ACT, 1998
Establishment and objects of Council for Debt Collectors
2. (1) There is hereby established a juristic person to be known as the Council for Debt Collectors.
(2) The objects of the Council are to exercise control over the occupation of debt collector.
Composition of Council
3. ( 1) The Council shall consist of not more than 10 members appointed by the Minister.
(2) The Minister shall appoint as members of the Council- (0) as chairperson, any fit and proper person with a suitable degree of skill and
experience in the administration of civil law matters; (b) as members-
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a magistrate; an attorney nominated by a representative body or bodies; at least two but not more than four debt collectors, two of whom shall be appointed after consultation with organisations representing debt collec- tors, who are natural persons and who have exercised the occupation of debt collector for at least three years; two persons who, in the Minister’s opinion, are fit and proper persons to serve on the Council; and one person from nominations submitted by institutions representing consumer interests and who, in the opinion of the Minister, is a fit and proper person to serve on the Council.
(3) The Council shall from time to time elect from among its members a vice-chairperson, who shall in the absence of the chairperson have all the powers and duties of the chairperson, and if neither the chairperson nor the vice-chairperson is present at a meeting of the Council, the members present shall elect a person from their own ranks to preside at that meeting.
(4) A member of the Council shall hold office for a term, not exceeding three years, determined by the Minister at the time of the member’s appointment: Provided that the Minister may withdraw an appointment of a member at any time and, provided further, that a member may be reappointed at the expiration of his or her term of office.
(5) No person shall be appointed as a member of the Council if he or she- . . IS an unrehabilitated insolvent; fails to comply or is not capable of fully complying with a judgment or order, including an order for costs, given against him or her by a court of law in a civil case; in the preceeding 10 years has been convicted of an offence of which violence, dishonesty, extortion or intimidation is an element; or does not permanently reside in the Republic.
(6) A member of the Council shall vacate his or her office if he or she- (a) becomes subject to a disqualification contemplated in subsection (5); (bl becomes of unsound mind; (c) in the case of a member appointed in terms of subsection (2)(b)(iii), ceases to
be a debt collector; (d) is absent without the leave of the chairperson for more than two consecutive
meetings of the Council; or (e) in the case of a member who is a debt collector, has been found guilty in terms
of section 15 of improper conduct.
Meetings of Council
4. (1) The Council shall meet for the first time at the time and place determined by the chairperson and thereafter at least three times in every financial year at the times and places determined by the chairperson or, in his or her absence, the vice-chairperson.
(2) The quorum for a meeting of the Council shall be a majority of its members. (3) The decision of a majority of the members of the Council present at a meeting of
the Council shall, subject to subsection (2) and section 16(3), be a decision of the
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Act No. 114, 1998 DEBT COLLECTORS ACT. 1998
Council and, in the event of an equality of votes on any matter, the person presiding at the meeting concerned shall have a casting vote in addition to his or her deliberative vote.
Executive committee
5. (1) The Council may appoint three of its members as an executive committee of the 5 Council which shall, subject to the provisions of subsection (2) and the directions of the Council, be competent during the periods between meetings of the Council to perform or exercise all the powers and functions of the Council: Provided that the majority of the members of the executive committee shall be members of the Council other than those appointed in terms of section 3(2)(b)(iii). 10
(2) The executive committee shall not be competent- (a) except in so far as the Council may otherwise direct, to set aside or vary a
decision of the Council; or (6) to exercise the power referred to in section 15(3)(a).
(3) Any act performed or decision taken by the executive committee shall be valid in 15 so far as it is not varied or set aside by the Council.
’ Remuneration and allowances of members of Council
6. Out of the funds of the Council- (u) such remuneration shall be paid to a member of the Council who is not in the
full-time employ of the State; and (b) such allowances for travelling and subsistence expenses incurred by a
member of the Council, shall be paid to him or her in the performance of his or her functions as such a member,
as may be determined by the Minister from time to time generally or in any particular case.
Appointment of personnel
7. The Council may appoint such personnel as it may deem necessary for the efficient performance of its functions and management of its administration and may determine the remuneration and conditions of service of such personnel.
Persons prohibited from performance of certain acts
8. (1) As from a date fixed by the Minister in the Gazette, no person, excluding an attorney or an employee of an attorney, shall act as a debt collector unless he or she is registered as a debt collector in terms of this Act and, in the case of a company or close corporation carrying on business as a debt collector, unless, in addition to the company or close corporation itself, every director of the company and member of the close corporation and every officer of such company or close corporation, not being himself or herself a director or member but who is concerned with debt collecting, as the case may be, is registered as a debt collector.
(2) A notice under subsection (1) shall be published at least 180 days before the date referred to therein.
(3) Any agreement concluded between a debt collector and his or her client or between a debt collector and his or her employee either before or after the date referred to in subsection (1) which is incompatible with the prohibition contained in that subsection shall be invalid to the extent of such incompatibility.
Application for registration as debt collector
9. (1) An application for registration as a debt collector shall he lodged with the Council on the prescribed form and shall be accompanied by the prescribed application fee.
(2) A person who applies for registration as a debt collector in terms of subsection (1). shall furnish such additional particulars in respect of his or her application as may be determined by the Council.
(3) If the Council is of the opinion that the provisions of this Act have been complied with in respect of an application referred to in subsection (1). it shall, subject to the provisions of section 10, grant the application and register the applicant as a debt collector.
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Act No. 114, 1998 DEBT COLLECTORS ACT, 1998
Disqualifications
10. (1) No person shall be competent to be registered as a debt collector- (a) in the case of a natural person, if-
(i) subject to subsection (2), in the preceding 10 years he or she has been convicted of an offence of which violence, dishonesty, extortion or 5 intimidation is an element;
(ii) he or she has been found guilty in terms of section 18 of improper conduct;
(iii) he or she is of unsound mind and has been so declared or certified by a competent authority; 10
(iv) he or she is under the age of 18 years; or (v) he or she is an unrehabilitated insolvent; or
(6) in the case of a company or close corporation, if a director of the company or a member of the close corporation is in terms of paragraph (a) not competent to be registered as a debt collector. 15
(2) (a) Any person who is not competent to be registered as a debt collector on account of having been convicted of an offence referred to in subsection (I)(a)(i), may in the prescribed manner apply to the Minister to be exempted from the disqualification contemplated in that subsection on the grounds that the circumstances relating to the commission of that offence were of such a nature that the relevant conviction should not 20 disqualify the applicant from exercising the occupation of debt collector.
(b) Upon receipt of an application referred to in paragraph (a), the Minister shall cause-
(i) such application to be published in the Gazette; and (ii) such investigation to be conducted into the matter as he or she deems 25
appropriate. (c) If the Minister is satisfied that the circumstances relating to the relevant offence is
of such a nature that it is not likely to affect the suitability of the applicant to exercise the occupation of debt collector, the Minister may, after consultation with the Council, direct that the applicant shall not on account of the relevant conviction be disqualified 30 from registering as a debt collector.
Certificate of registration
11. The Council shall issue to every person registered as a debt collector, a certificate of registration on the prescribed form.
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12. (1) The Council shall keep a register of the names and prescribed particulars of every debt collector whose application for registration under section 9(3) has been approved, or whose registration has been withdrawn or disapproved.
(2) The register contemplated in subsection (1) shall- be published in the Gazette annually; 40 be updated every second month by the Council; be available for inspection by the public at the prescribed places and times; and be submitted to Parliament within 14 days after the publication thereof in the Gazette. 45
Payment of subscription fees
13. (1) Every person registered as a debt collector shall pay to the Council the prescribed fees.
(2) If a debt collector fails to comply with the provisions of subsection (l), the Council may suspend his or her registration as a debt collector until the amount owed by 50 him or her is received by the Council: Provided that if the relevant amount is not paid within three months of the date of suspension of the registration of the debt collector concerned, the Council may withdraw the registration.
(3) Section 16(2) and (3) shall, with the necessary changes, apply to the withdrawal of the registration of a debt collector under subsection (2). 55
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Act No. 114,1998 DEBT COLLECTORS ACT, 1998
Code of conduct
14. (1) la) The Council shall, subject to the approval of the Minister, adopt a code of conduct for debt collectors and shall publish such code in the Gazette.
(bl The code of conduct, and any amendment thereof, shall be submitted to Parliament within 14 days after publication thereof in the Gazefre. 5
(2) The Council may, subject to the approval of the Minister, amend or repeal the code of conduct adopted by it: Provided that such code shall not be wholly repealed by it, unless it is simultaneously replaced by a new code of conduct for debt collectors so adopted and approved by the Minister and, provided further, that the Council shall publish any such amendment, repeal or replacement in the Gazette. 10
(3) The code of conduct drawn up or adopted by the Council and published in the Gazerre shall be binding on all debt collectors.
Improper conduct by debt collectors
15. ( 1) A debt collector may be found guilty by the Council of improper conduct if he or she, or a mrson for whom he or she is vicariouslv liable- 1.5
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us& force or threatens to use force agains; a debtor or any other person with whom the debtor has family ties or a familial or personal relationship; acts towards a debtor or any other person with whom the debtor has family ties or a familial or personal relationship, in an excessive or intimidating manner; makes use of fraudulent or misleading representations, including- 20 (i) the simulation of legal procedures;
(ii) the use of simulated official or legal documents; (iii) representation as a police officer, sheriff, officer of court or any similar
person; or (iv) the making of unjustified threats to enforce rights; 25 is convicted of an offence of which violence, dishonesty, extortion or intimidation is an element; spreads or threatens to spread false information concerning the creditworthi- ness of a debtor; contravenes or fails to comply with a provision of the code of conduct 30 contemplated in section 14; contravenes or fails to comply with any provision of this Act; or behaves or acts in any manner amounting to conduct, other than that mentioned in paragraphs (a), (b), (c), (d), (e), cfl or (gl. which is improper in terms of a regulation. 35
(2) The Council may in the prescribed manner investigate an allegation of improper conduct by a debt collector submitted to it in the prescribed manner or have it investigated in the prescribed manner by a committee of members of the Council or by a person or persons nominated by it: Provided that a debt collector whose conduct is being investigated shall be afforded the opportunity, either in person or through a legal 40 remesentative, of refuting anv allegations made against him or her.
‘(3) If may-
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the Council fin& aSdebt