What a Debt Collector May Charge You — and the Bill You Can Have Taxed

A debt collector phones, and the amount they name is larger than the amount you remember owing. Fees have been added. Then more fees. Nobody will break down where the number came from.

There is a statute governing exactly this, and it does two things people are rarely told. It sets a closed list of what a debt collector may recover from you. And it gives you the right to have their account independently taxed — checked, line by line, by the clerk of a magistrate's court.

The closed list

The Act is short and blunt about it. A debt collector shall not recover from a debtor any amount other than:

the capital amount of the debt due, and interest legally due and payable on it for the period during which the capital remains unpaid; and
necessary expenses and fees prescribed by the Minister in the Government Gazette, after consultation with the Council for Debt Collectors.

That is the whole list. Not "reasonable" fees, not administration charges the collector has decided on, not a percentage of the balance chosen in-house. Expenses and fees are recoverable only to the extent that a prescribed tariff allows them.

We are deliberately not printing the tariff figures here. They are prescribed by notice and re-prescribed over time, and a number quoted without a date is how stale information gets into circulation. What matters more is the mechanism for testing a bill against them, which is the next section.

You can have the account taxed

This is the provision almost nobody uses, and it changes the balance of an argument entirely.

Upon request by a debtor, and against payment of a prescribed fee, the clerk of a magistrate's court — or a costs committee of a provincial law society — may tax or assess any account or statement of costs, interest and payments claimed to be owed by a debtor to a debt collector or to the collector's client.

Taxation is an independent line-by-line review of a bill. It is the ordinary mechanism for testing legal costs, and the Act extends it to debt collection accounts.

The right is not once-off, either. Having one account taxed does not prevent the taxation of a further account reflecting further amounts that become payable and arise from the same cause of debt.

And you can demand a full statement — one free every six months

Separately, a debt collector must, on request and against payment of a prescribed fee, deliver to you a settlement account containing a complete exposition of all debits and credits in connection with a specific collection.

With an important proviso: a debtor is entitled to request a settlement account free of charge once in every six months.

That is the document to ask for first, before any argument about the total. A complete exposition of debits and credits is what turns "you owe R14,300" into a list you can check — and it is the document a taxation would work from.

Is the person calling you even allowed to?

The Act prohibits unregistered collection outright.

No person — excluding an attorney or an attorney's employee — may act as a debt collector unless registered under the Act. Where the collector is a company or close corporation, the requirement goes further: the entity itself, every director or member, and every officer concerned with debt collecting must each be registered.

And any agreement between a collector and a client, or between a collector and an employee, that is incompatible with that prohibition is invalid to the extent of the incompatibility.

The definition of who counts is wide. It covers a person who, for reward, collects debts owed to another on that other's behalf. It also covers a person who, in the course of regular business and for reward, takes over those debts in order to collect them for their own benefit — so a firm that has bought your account is a debt collector under this Act, not something outside it. And it covers agents and employees of such a person or of an attorney, excluding employees whose duties are purely administrative or clerical.

So "we bought the book from your old provider" is not an answer to the registration question. Ask for the registration.

What they may not do

The Act lists conduct for which the Council may find a collector guilty of improper conduct — including conduct by someone the collector is vicariously liable for, which covers the agent actually making the calls.

A collector may not:

use force, or threaten to use force, against you or any other person with whom you have family ties or a familial or personal relationship;
act towards you or such a person in an excessive or intimidating manner;
make use of fraudulent or misleading representations — and the Act spells out what that includes: simulating legal procedures, using simulated official or legal documents, representing themselves as a police officer, sheriff, officer of court or any similar person, or making unjustified threats to enforce rights;
spread, or threaten to spread, false information about your creditworthiness; or
breach the code of conduct, the Act, or a regulation.

A conviction for an offence involving violence, dishonesty, extortion or intimidation is itself a ground.

Two of those deserve emphasis, because they describe tactics people encounter and assume are normal. A document made to look like a court summons but which is not one is simulated legal documents. A caller implying they are from the sheriff's office is representation as a sheriff. Both are named in the section.

What the Council can do about it

Complaints go to the Council for Debt Collectors, which may investigate an allegation submitted in the prescribed manner — with the collector entitled to the opportunity, in person or through a legal representative, to refute the allegations.

If the Council finds a collector guilty of improper conduct, it may:

withdraw the registration;
suspend it, for a period or pending the fulfilment of conditions;
impose a fine not exceeding the prescribed amount, payable to the Council;
reprimand the collector;
recover its investigation costs from them;
order the collector to reimburse any person the Council is satisfied has been prejudiced by their conduct, and to furnish proof of that reimbursement within a specified period; or
combine any of those penalties.

The reimbursement power is the one worth knowing about as a complainant. This is not only a disciplinary process with an outcome you never see; the Council can order money back to a person who was prejudiced.

Money they collect must sit in trust

Every debt collector practising for their own account must open and maintain a separate trust account at a bank, and must deposit money received or held on behalf of any person into it as soon as possible after receipt.

If you have paid a collector and the creditor says nothing was received, that trust obligation is the provision to raise, and it is a Council matter.

The two closed lists work together

If the debt arises from a credit agreement, a second statute is already working in your favour, and the combination is powerful.

Under the National Credit Act, a credit agreement may charge you for only seven things, and collection costs are one of them — so the collector's charges must fit inside that list as well. And once you are in default, the National Credit Act caps the aggregate of the fees, interest, credit insurance, default administration charges and collection costs at the unpaid balance of the principal debt as at the date the default occurred.

So on a credit agreement you have a closed list under the Debt Collectors Act, a closed list under the National Credit Act, and a hard ceiling on the total. Those three together are usually a better argument than disputing whether the debt is owed at all.

What to do

Ask for the settlement account — the complete exposition of debits and credits. One is free every six months.
Ask whether they are registered, and if the collector is a company, whether the entity and the individuals dealing with your account are registered.
Check every charge against the closed list. Capital, interest legally due, and prescribed expenses and fees. Anything else needs explaining.
Have the account taxed if the explanation does not hold. The clerk of a magistrate's court or a provincial law society's costs committee may tax or assess it on your request.
Keep a record of the conduct — dates, times, what was said, and by whom. The improper conduct grounds turn on behaviour, and behaviour has to be evidenced.
Complain to the Council where conduct crosses the lines above, and ask specifically about reimbursement.
If the debt is on a credit agreement and you are in default, apply the aggregate cap. Establish the capital outstanding on the day you fell behind and compare it with everything charged since.

Where a judgment has already been taken, our guide to what a judgment means and how to clear it covers that stage, and where money is being deducted from a salary, how garnishee orders work explains that separate process and its limits. If you are on the creditor's side of this decision, our guide to collecting your own debt versus hiring a debt collector sets out that choice.

For everything else, start at our money guides.

Frequently asked questions

What may a debt collector charge me in South Africa? Only the capital amount of the debt, interest legally due and payable on it for the period it remains unpaid, and necessary expenses and fees prescribed by the Minister in the Gazette after consultation with the Council. Nothing else.

Can I challenge the fees they have added? Yes. On your request and against a prescribed fee, the clerk of a magistrate's court or a costs committee of a provincial law society may tax or assess the account or statement of costs, interest and payments claimed.

Can I get a full breakdown of what I owe? Yes. On request and against a prescribed fee, a debt collector must deliver a settlement account containing a complete exposition of all debits and credits for that collection — and you may request one free of charge once every six months.

Does a company that bought my debt count as a debt collector? Yes. The definition covers a person who, in the course of regular business and for reward, takes over debts in order to collect them for their own benefit.

Must a debt collector be registered? Yes, unless they are an attorney or an attorney's employee. For a company or close corporation, the entity, every director or member, and every officer concerned with debt collecting must each be registered.

Can they threaten me? No. Using or threatening force against you or a person with whom you have family or personal ties, and acting in an excessive or intimidating manner, are grounds for a finding of improper conduct.

Can they pretend to be from the court? No. Fraudulent or misleading representations are grounds for a finding of improper conduct, expressly including simulating legal procedures, using simulated official or legal documents, and representing themselves as a police officer, sheriff or officer of court.

Can they tell people I do not pay my debts? Spreading, or threatening to spread, false information about a debtor's creditworthiness is a listed ground of improper conduct.

What can the Council do if it finds them guilty? Withdraw or suspend the registration, impose a fine up to the prescribed amount, reprimand, recover its investigation costs, order reimbursement of a person prejudiced by the conduct, or combine those penalties.

Where does the money I pay them go? Into a separate trust account, which every debt collector practising for their own account must open and maintain, with money deposited as soon as possible after receipt.

Does the National Credit Act also limit collection costs? Yes, where the debt arises from a credit agreement. Collection costs are one of only seven things such an agreement may charge for, and once you are in default the aggregate of those charges may not exceed the unpaid balance of the principal debt as at the date of default.