It is that time of the year again when many consumers will go on xmas spending sprees to reward themselves and their families after a long year of hard work.  Shopping malls are already on cue and have started with the festive season promotions, making it all the more difficult to resist the temptation of shopping. Sadly, many consumers will end up with credit agreements that they will not be able to afford in the long run and, as a result, some will inevitably end up being slapped with a court order to recoup monies from their salaries because of their inability to fulfil their obligations. These court sanctioned deductions are commonly referred to as ‘garnishee orders’.

‘Recent findings released by the University of Pretoria’s Law Clinic indicate that over half a million employees in the formal sector have garnishee’s going off against their salaries. This equates to almost one in 10 people employed,’ states Credit Ombud Manie van Schalkwyk.

‘Our office has also seen a marked increase in the number of consumers knocking on our door seeking assistance with regard to the problems they experience in relation to their garnishee orders,’ adds van Schalkwyk.

Emolument attachment orders, commonly referred to as garnishee orders, are a frequently used collection method to collect outstanding debt from non-paying consumers. This legitimate form of debt collection has been marred by abusive practices and misconduct by some within the industry.

‘Malpractices in the garnishee space are affecting thousands of consumers and our own findings from the Garnishee Task Team have revealed that many consumers are buckling under the pressure of multiple garnishee orders going off against their salaries. On numerous occasions, the correct court processes were not followed in obtaining the garnishee orders and the consumers suffer the negative consequences with limited access to  redress,’ says van Schalkwyk.

South Africa is among one of the few countries which does not have some form of a limitation in terms of the rand value of garnishee orders or the number of garnishee orders that can be taken  against an individual’s salary. The result is that some consumers work  a full month but take home next to nothing after all the garnishees have been deducted.

Findings in the University of Pretoria’s Law Clinic also show that most payroll officers are unsure of when to stop deductions and this can result in consumers paying over more that what they were owing.

Van Schalkwyk explains: once an emoluments attachment order has been granted, there is not much that can be done by employers, except deduct the money as instructed by the court.  However, employers can play a more active role in terms of capacitating their payroll admininstration staff on how garnishee orders function and to help them distinguish the legal garnishees from the illegal. They should at least know when to stop deducting from the employees salary and know how to best support employees that have been garnisheed by giving them the appropriate information so that they can establish which account they have been garnisheed for.

Van Schalkwyk has the following adivse for consumers where garnishee orders are concerned:

·         This festive season, use your bonus or stokvel payout to pay off your garnishee order (you can save yourself years of paying off a garnishee order and free up your salary for 2014)

·         You may save money by negotiating a lesser settlement if you settle your garnishee order using your bonus or stokvel payout

·         Find out who issued a garnishee order against you as soon as you become aware of the garnishee -you can go to your Human Resources or Payroll Department for this information (at times people pay for debts that have been run up fraudeulently as a result of identity theft)

·         Contact the attorneys who have issued the garnishee order against you and request  a detailed statement (the statement from the attorney will show the purchase amount and who the credit provider was; it should set out the legal fees as well as the correct outstanding balance. The balance as per your payslip usually does not include all the legal fees, costs and other charges.)

·         Try to pay more towards your garnishee as you will benefit by saving on interest and charges if you pay your account off sooner

·         Remember to ask for a paid up letter or for your statement which shows that you no longer have an outstanding balance if you pay a lumpsum towards your garnishee order (this will come in handy if you have any dispute in the future)

Consumers can contact the office of the Credit Ombud for free assistance on matters relating to problems with garnishee orders, incorrect or unfair listings on the credit bureau or any problems that they may experience in the credit industry. The office can be contacted on 0861 66 28 37 or visit their website on the website www.creditombud.org.za. If we cannot assist you, we will refer you to the correct organisation to assist you with your problem
ISSUED BY:

Neo Loeto

Credit Ombud

Tel: (011) 781 6431

Cell: 071 687 7594

E-mail: nloeto@creditombud.org.za

Website: www.creditombud.org.za