Debt collection in South Africa is regulated by the National Debt Collection Act 114 of 1998, read with the National Credit Act 34 of 2005.
In terms of this legislation, the capital amount together with lawful interest, administration costs, and collection fees may be collected by an attorney, the attorney’s agent, or a registered debt collector.
We understand that in every business customers/clients delay payments, refuse to pay invoices by using baseless justifications, or simply do not pay and “disappear”. Our purpose is to recover debts in a quick and efficient way without delaying the matter. We act on instructions immediately with the client’s best interests being paramount importance. Our firm thinks “out of the box” to obtain the best possible outcome for our clients. With this in mind, we are also open and honest with our clients and will advise clients not to proceed with litigation if the claim amount is negligible and legal costs will outweigh the claim amount.
Our firm offers debt collection services at very reasonable rates as we try to ensure that fees are lower than the claim amount. We are highly experienced in this field and primarily work with larger corporate companies on a set tariff.
Tips on Recovering Debt Effectively
- Initiate the process of recovering debts as soon as possible. A delay might cause the debtor to go into further over indebtedness making it extremely difficult to recover the capital amount.
- Although the client has the choice to sign as a surety and we’re aware that most people do not sign these agreements, we suggest that you include a surety portion in your agreements. For example, in the event of a liquidation it becomes difficult to recover the total capital amount thus we would have the option to execute against the surety personally.
- Ensure that the terms of your agreement are certain. In addition, you must ensure that the agreement is completed in full before supplying any product and/or service.
- You must confirm that the contact details are correct at inception of any agreement. This includes but is not limited to, identity numbers; full names; registration numbers; whether the company is a sole proprietorship/partnership/company/trust. Always request proof of contact details as we have had many matters where debtors initially provided incorrect information and it is impossible to trace their whereabouts later on.
- Retain a record of all communication between yourselves and the debtor. This communication can be extremely useful to attorneys when establishing the correct route to take. This information must be provided to attorneys at instruction as it alleviates any time wasting.
- Ensure that any/all disputes between yourselves and the debtor are communicated in writing and not just telephonically. If a matter was discussed telephonically, the conversation must be recorded in writing. The same principle applies to contracts and the negotiation of terms. Should you agree to amend a term of an agreement, this cannot only be expressed verbally. It is crucial that both parties agree to any amendments in writing.
- Ensure that you have proof of delivery of all goods and/or services to avoid disputes. Delivery notes must be signed by your client/customer for everything
- Perform appropriate credit checks of your customers/clients before entering into agreements.
- Take care in supplying your customers/clients continuously with your product and/or service if they have been in arrears for over 60 days as the arears will keep escalating.
If you would like further information or advice regarding your agreements and/or your company’s internal debt collecting processes, we would be happy to assist you. We are always open to negotiating a reasonable fee structure for all debt collection matters to suit our client’s needs.