Is it legal for creditors to collect a prescribed debt?
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GUEST - Kwanda Vabaza – Adjudicator Manager of the Credit Division at the National Financial Ombud
The Prescription Act stipulates the period after which a consumer’s obligation to pay a monetary debt to a creditor will be extinguished and the instances in which this period will be delayed or interrupted. Is it legal for creditors to collect a prescribed debt? Kwanda said the answer to this question depends on whether the debt falls within the ambit of the NCA. In other words, whether the debt relates to a credit agreement and falls within the definition of a credit agreement in the NCA.
The Prescription Act stipulates the period after which a consumer’s obligation to pay a monetary debt to a creditor will be extinguished and the instances in which this period will be delayed or interrupted. Is it legal for creditors to collect a prescribed debt? Kwanda said the answer to this question depends on whether the debt falls within the ambit of the NCA. In other words, whether the debt relates to a credit agreement and falls within the definition of a credit agreement in the NCA.