Asked by the Customer on 06-05-2015 07:45:35
Question posted in the National Credit Act Law category relating to Gauteng
Question posted in the National Credit Act Law category relating to Gauteng
Good day. About 5 years ago I got a credit card from virgin active. If I remember correclty the limit on it was something like R6000. I got retrenched however in that period, and I think at that time my debt balance was about R4000. After 7 months I found another job and I contacted them to make arrangements for payments again. The call centre guy told me that he's not picking me up on the system, and that he would get back to me. No one ever got back to me at that time. About a month ago someone phones me and tells me that I owe Absa bank R14 000. I told them I never had a Absa credit card, and that they should send me the information. Yesterday, I received a court summonse that I have to pay the R14 000 over to laywers or defend it within 10 days. First the summons was dated 2 weeks ago, I cannot defend it now, second it was just dropped in my drive way. I still have'nt received any details, I haven't been contacted regarding this in over 5 years. The amount has gone from R4000 to R14 000. And I signed the contract with Virgin, not Absa.
What do I need to do?
What do I need to do?
Message from the Attorney
Posted by Att. Patrick on 06-05-2015 09:36:39
Hi there and thank you for your question,
First, it doesn't matter what date the summons is stamped. What matters is the date that it was served on you. That would be day 1, and you would then have 10 days from THAT date to enter an appearance to defend the summons. There should be a section on page 3 or 4 that you can fill in and deliver to the attorneys which will be your "notice of intention to defend". I would suggest that you either do this yourself, or you hire a firm of attorneys to assist you.
Secondly, the sheriff is authorised to leave the summons at your residence. He doesn't need to effect personal service.
Thirdly, the amount has gone from R4000 to R14000 obviously because of interest, which is probably being charged on the account at 18 - 21% per annum. That's huge, but unfortunately allowed in terms of the National Credit Act.
Fourth, the Virgin Credit cards were actually just re-branded ABSA credit cards.
One of your defences is the in dulpum rule, which says that the interest can't be more than the original capital debt. In your example, the interest would be capped at R4000 if the debt was R4000 - which would mean that their claim against you would be for R8000. Read more on the in duplum rule here: https://www.kpmg.com/ZA/en/IssuesAndInsights/ArticlesPublications/Financial-Services/Documents/In%20duplum%20factsheet.pdf
Another one of your defences is prescription, which says that the bank has 3 (three) years to claim the debt from you, failing which they HAVE to write it off, and they are LEGALLY NOT ALLOWED to claim it from you. A defence of prescription is an obsolute defence.
What you need to do is to work out the LAST DATE that you used the card, and then count 3 years from that date - to the day. If you have NOT used the card for a period of 3 years before the summons was issued, then you can use the prescription defence.
e.g. You last used the card on 18 January 2012. The defence of prescription would arise on 19 January 2015. If the bank has not SERVED the summons on you by 19 January 2015, then your defence of prescription would work. If they did, then your defence wouldn't work.
You need to work out the EXACT time period, as it is very important.
The start of the prescription time period does NOT move every month just because interest carries on running on the account. It is fixed as the date that you last used the card.
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.
First, it doesn't matter what date the summons is stamped. What matters is the date that it was served on you. That would be day 1, and you would then have 10 days from THAT date to enter an appearance to defend the summons. There should be a section on page 3 or 4 that you can fill in and deliver to the attorneys which will be your "notice of intention to defend". I would suggest that you either do this yourself, or you hire a firm of attorneys to assist you.
Secondly, the sheriff is authorised to leave the summons at your residence. He doesn't need to effect personal service.
Thirdly, the amount has gone from R4000 to R14000 obviously because of interest, which is probably being charged on the account at 18 - 21% per annum. That's huge, but unfortunately allowed in terms of the National Credit Act.
Fourth, the Virgin Credit cards were actually just re-branded ABSA credit cards.
One of your defences is the in dulpum rule, which says that the interest can't be more than the original capital debt. In your example, the interest would be capped at R4000 if the debt was R4000 - which would mean that their claim against you would be for R8000. Read more on the in duplum rule here: https://www.kpmg.com/ZA/en/IssuesAndInsights/ArticlesPublications/Financial-Services/Documents/In%20duplum%20factsheet.pdf
Another one of your defences is prescription, which says that the bank has 3 (three) years to claim the debt from you, failing which they HAVE to write it off, and they are LEGALLY NOT ALLOWED to claim it from you. A defence of prescription is an obsolute defence.
What you need to do is to work out the LAST DATE that you used the card, and then count 3 years from that date - to the day. If you have NOT used the card for a period of 3 years before the summons was issued, then you can use the prescription defence.
e.g. You last used the card on 18 January 2012. The defence of prescription would arise on 19 January 2015. If the bank has not SERVED the summons on you by 19 January 2015, then your defence of prescription would work. If they did, then your defence wouldn't work.
You need to work out the EXACT time period, as it is very important.
The start of the prescription time period does NOT move every month just because interest carries on running on the account. It is fixed as the date that you last used the card.
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.
Message from the Customer
How do I obtain the credit card information to see when last it was used? Do I contact the laywers or Absa for a statement? Also on the prescription defense. The letter says that the laywers has bought the debt over in 2013, does that matter?
Message from the Attorney
Posted by Att. Patrick on 06-05-2015 12:57:10
Hi again,
Surely you would have copies of your credit card statements from before? You are entitled to ask ABSA's lawyers for copies of all statements. You would just need to work out the last date that you used the credit card.
If they won't give you the statements so you can't work out that date, then as part of your defence you would just need to argue that you last used your card MORE than 3 years before the date that the summons was served on you, and accordingly the debt has prescribed. They will then need to give you the statements as you would be entitled to them in terms of the discovery rules of court.
It doesn't matter when the lawyers took cession of the debt. It makes absolutely NO difference. They are just stepping into the shoes of ABSA. The ONLY important date is the last date that you used the credit card.
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.
Surely you would have copies of your credit card statements from before? You are entitled to ask ABSA's lawyers for copies of all statements. You would just need to work out the last date that you used the credit card.
If they won't give you the statements so you can't work out that date, then as part of your defence you would just need to argue that you last used your card MORE than 3 years before the date that the summons was served on you, and accordingly the debt has prescribed. They will then need to give you the statements as you would be entitled to them in terms of the discovery rules of court.
It doesn't matter when the lawyers took cession of the debt. It makes absolutely NO difference. They are just stepping into the shoes of ABSA. The ONLY important date is the last date that you used the credit card.
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.
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