The law forbidding creditors from collecting on prescribed debts, which falls under the National Credit Act 34 of 2005 (NCA), is well-known, established and adhered to, or so you might think.
The aim of this law is to safeguard consumers against unfair and exploitative practises by creditors, and has been in effect for a number of years.
Despite the legal requirements and the guaranteed protection offered to consumers, Reana Steyn, the Ombudsman for Banking Services (OBS), warns that the OBS is still receiving, investigating and resolving complaints from bank customers, relating to prescribed debts. In some cases, banks have been found guilty of engaging in this illegal practice.
“Unfortunately, in many instances, the protection afforded by the law is beneficial only to consumers who know about the legal principle as…