Are you one of those consumers who ignore ‘private number’ calls hoping those ‘debt calls’ will go away?

Day in and day out consumers receive phone calls, sms’s, emails reminding them to pay their debts. Some are harassed by debt collectors for debt handed over to attorneys for collections. Consumers go as far as avoiding ‘private number’ calls and any calls that may look like they come from credit providers or debt collectors. According to the Credit Ombud, Mr. Nicky Lala Mohan, almost 10 million credit active consumers are struggling to repay their debts and would rather avoid the problem than face it. One of the main reasons for consumers ‘hiding’ away from debt is due to a lack of knowledge. “Consumers have no clue what their rights are, what to complain about and where to complain”, adds Nicky Lala Mohan.


“In some instances, consumers are contacted telephonically for collection of debt they don’t even remember. Some debt was taken out while the consumer was a student, while others, have not been contacted for years but did have debt that, due to financial difficulties, they could not repay.  In some instances, consumers, unwittingly interrupt prescription by acknowledging the debt or making, a minimal payment, towards the debt.


Consumers come to our office complaining they were misinformed by the debt collector or credit provider that should a R20 or R50 payment be made, this would halt legal proceedings” Lala Mohan adds.


One of the complaints logged with the office of the Credit Ombud is that of Ms. Nobhotela Adams*.  Ms. Adams entered into a loan agreement in 2013 with a credit provider for a sum of R10 000. She received payment of only R7 000. Shortly thereafter she contacted the credit provider to query why she had not received the full amount of the loan, but her query was not dealt with at all. The consumer did not make any payments, as she was of the view that the dispute over the amount of the loan remained unresolved. She raised prescription with the credit provider and for being listed as a bad payer with the credit bureau. The consumer requested our assistance in resolving the issues around prescription of the debt and an update on her credit profile. The outstanding balance now had spiraled to R20 020. Our office wrote to the credit provider, who refuted the prescription claim advising that the consumer had, in fact, acknowledged the debt telephonically. The credit provider also pointed out that the consumer raised the defense of prescription prematurely with their call center, just before referring her complaint to our office, which they alleged, further interrupted prescription. We requested call recordings from the credit provider as the alleged acknowledgement was in dispute, however, this was not forthcoming. We escalated the matter to the credit provider’s senior management and presented legal arguments as well as prescription case law in support of the prescription claim. As a result of the Credit Ombud’s intervention, the credit provider agreed to withdraw the claim and close their file. The outstanding balance of R20 020 was written off the consumer’s account. An instruction was sent by the credit provider to the credit bureau to update the consumer’s credit profile.

Many consumers go through a similar situation like Ms. Adam’s where a credit provider or a debt collector would collect on debt that has prescribed. Some consumers even find themselves blacklisted at the credit bureaus.


Prescription of debt means a debt is extinguished after a period of time has passed. According to the Prescription Act 68 of 1969, a debt is prescribed if, during the past three years the consumer did not;

  • admit to owing on the debt, either verbally or in writing;
  • make payment towards the outstanding amount;
  • The lender has not taken legal action against the consumer


The lender may not institute legal action against the consumer for the debt, adds Mr Nicky Lala Mohan.

Lala Mohan advises consumers to be aware that not all debt prescribe after three years. Retail, credit cards, Telkom, personal loans, gym contracts, cellphone, electricity accounts due to the municipality and school fees prescribe after three years, however, debt relating to home loans, monies due to SARS, rates and taxes due to the municipality, tv licenses prescribe after 30 years.


Another complaint logged at the office of the Credit Ombud was that of a consumer who  disputed data relating to three bank accounts adversely listed on his profile. The total amount reflected against the consumer’s profile for these accounts totaled R152 290.  He pointed out that the accounts had already prescribed, yet they remained on his credit record. We initiated an investigation which resulted in the credit provider  confirming that the three accounts had indeed prescribed. The consumer’s profile was updated. Subscribers to the Credit Bureaux may not submit information in respect of debt that has prescribed.

Section 126B(1)(b) of the National Credit Amendment Act, prohibits the collection of and the sale of prescribed debt. Like the case studies mentioned, consumers can now find themselves free from debt that has expired, provided that they don’t interrupt prescription by acknowledging the debt or making payment towards the debt after the three years has lapsed.

Should consumers find they are being contacted for debts that have prescribed, they may contact the office of the Credit Ombud for FREE assistance as well as if they experience any other issues relating to credit agreements with non-bank credit providers such as the clothing and furniture retailers as well as micro-lenders, fraudulent listings, emolument attachment orders (“garnishee orders”) or general complaints about their credit bureaux listings. The office can be contacted on 0861 66 28 37; on the website www.creditombud.org.za; email us at ombud@creditombud.org.za or send a sms to 44786 and we will call you.



If you would like more information about this topic, please contact Salem Dyafta , Public Relations Manager at 0792243802 or email at sdyafta@creditombud.org.za.

*Not consumer’s real name