A common scam that has been operating in South Africa for several years has recently come under the spotlight again after the Debt Collectors Council of South Africa stepped in. With many queries from clients who have fallen victim to this scam and its harassment, it is proper to address the issue in a legal context.
The scam:
The company will contact you and inform you that they are performing a service for their client and would like to confirm your contact details at no cost. They will send a form for you to complete, containing various terms and conditions in the small fine print. Upon receiving the signed form, they will send you an invoice for alleged services rendered. Failure to pay will see exorbitant interest being charged. You will eventually be handed over to a collection company that will harass and threaten you with adverse credit or a “black” listing.
Application of the Consumer Protection Act:
Section 41 of the Consumer Protection Act states the following:
False, misleading or deceptive representations:
- Concerning the marketing of any goods or services, the supplier must not, by words or conduct—
- directly or indirectly express or imply a false, misleading or deceptive representation concerning a material fact to a consumer;
- use exaggeration, innuendo or ambiguity as to a material fact, or fail to disclose a material fact if that failure amounts to a deception; or
- fail to correct an apparent misapprehension on the part of a consumer, amounting to a false, misleading or deceptive representation, or permit or require any other person to do so on behalf of the supplier.
Application:
A contract may be deemed lawful and enforceable because of the nature of the misrepresentation present in the commission, as in this scam, and therefore such agreement is null and void.
Recent developments:
After numerous complaints, the Council for Debt Collectors has taken action and there have been various cases and fines handed down. The most prominent was against Laflar Collections who failed to attend the hearing. They were charged with 323 charges of misconduct and found guilty on 138 of the charges. They were fined for a total amount of R1 200 000.00. This amount was never paid, and the company was eventually deregistered.
The most recent case during February 2022 was against a company called ITC Summons. They were found guilty on 137 charges of misconduct by the Council for Debt Collectors for debt not legally due and payable and excessive harassment.
Advice:
These companies have rarely, if ever, been able to provide any proof that they have actually provided any service, thus no debt can be due and/or owing. Contact your nearest SEESA Office immediately to discuss the matter with your legal advisor.
Want to know more about the Consumer Protection Act and the application thereof? Contact your nearest SEESA, alternatively leave your contact details on our website, and a legal advisor will contact you.
About the author:
Esias Olckers has been a Labour and Consumer protection & POPI Legal Advisor for SEESA since August 2017. He obtained his LLB via the University of Johannesburg in 2014, completed two years of articles as well as LEAD Law School. Esias was admitted as an attorney of the High Court of South Africa in 2016.
Resources:
- Consumer Protection Act 68 of 2008;
- https://www.enca.com/shows/devi-white-pages-scam-tshepo-jeans17-february-2022;
- https://www.cfdc.org.za/debt-collector-charge-notice-laflar-collections-pty-ltd/
- Debt Collector Charge Notice – Verdict: ITC Summons (PTY) Ltd.