Asked by the Customer on 10-11-2015 10:17:00
Question posted in the Consumer Protection Law category relating to Western Cape
Question posted in the Consumer Protection Law category relating to Western Cape
Hi. I've been paying off debt with a collection agency for a very long time now and the balance is not getting less. I've also been asking around and j can't get an answer to how the St companies buys or take over debt and just calls you to collect but no new contract is out into place. Is this legal?
Message from the Attorney
Posted by Att. Patrick on 10-11-2015 11:17:49
Hi there and thank you for your question,
Basically these debt collection companies "buy" existing debts from other companies at a discounted price and then try to collect the debts.
e.g. If you owe R1,000 to a motor vehicle finance company (CompA), that company might sell the right to collect that debt to CompB. CompB would not pay R1,000 for the debt, but they might pay R800 to CompA. Legally, CompA would cede the debt to CompB. CompB would then be entitled to collec the R1,000 debt from you.
There is no need for you to enter into a new contract with CompB. Your existing obligation to pay CompA is all CompB needs to collect the debt from you.
So yes, it is legal what they are doing.
What you need to do is to request a reconciliation from CompB detailing the original amount, plus ALL interest and charges on the account, plus all payments made against the account. Typically the balance should be getting less, but if your monthly payments are LESS than the interest, it'll never get less.
You could speak to an attorney with the reconciliation to find out if the reconciliation is done right?
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.
Basically these debt collection companies "buy" existing debts from other companies at a discounted price and then try to collect the debts.
e.g. If you owe R1,000 to a motor vehicle finance company (CompA), that company might sell the right to collect that debt to CompB. CompB would not pay R1,000 for the debt, but they might pay R800 to CompA. Legally, CompA would cede the debt to CompB. CompB would then be entitled to collec the R1,000 debt from you.
There is no need for you to enter into a new contract with CompB. Your existing obligation to pay CompA is all CompB needs to collect the debt from you.
So yes, it is legal what they are doing.
What you need to do is to request a reconciliation from CompB detailing the original amount, plus ALL interest and charges on the account, plus all payments made against the account. Typically the balance should be getting less, but if your monthly payments are LESS than the interest, it'll never get less.
You could speak to an attorney with the reconciliation to find out if the reconciliation is done right?
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.
Answer Accepted
This answer was accepted on 10-11-2015 16:29:22
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