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Rogue debt collectors surface in tough times
June 17, 2009
Johannesburg - The government should step in to help protect indebted people and their employers from being exploited by unscrupulous debt collectors, a debt counselling company said on Wednesday.
According to a statement issued by Consumer Assist, many debt collection agencies and lawyers are "relying on employer ignorance of garnishee orders by charging excessive fees".
They also present documents that look like court orders, but are not, to make employers deduct money from employees' salaries.
"We had a labourer who overpaid his debt by R36 000, he didn't know nor did his company until we did an audit of their records," Andre Snyman, the company's chief executive officer said.
"There is a significant need for staff in employers' payroll departments to have a better knowledge of the Magistrates' Court Act and ask more probing questions."
Anton Viljoen, chief executive officer of the company Debt Control Management, which helps companies manage garnishee orders, said the government was considering making it compulsory for an employer to show he knows how to manage garnishee orders, otherwise this must be outsourced to a company which specialises in the process.
A garnishee order is issued by a court to permit a company to deduct money from an indebted employee's salary and hand it over to the person the employer owes money to.
Viljoen said while employers were worried they would face an order from lawyers if they did not deduct the money, the employee could also lay a claim against the employer for deducting more money than stipulated in the garnishee order.
"Employers should be compelled to make use of companies that specialise in administration garnishee orders or get systems in place," the statement said.
Because most employers do not have systems that help them keep track of the correct amount to be deducted, they carry on deducting until a lawyer tells them to stop.
This also means that in many cases, consumers are paying more than they should. - Sapa
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