The law forbidding creditors from collecting on prescribed debts which falls under the National Credit Act 34 of 2005 (NCA) is well known.

The aim of this law is to safeguard consumers against unfair and exploitative practices by creditors and has been in effect for a number of years.

Despite the legal requirements and the guaranteed protection they offer consumers, Reana Steyn, the Ombudsman for Banking Services (OBS) warned that the OBS is still receiving, investigating and resolving complaints from bank customer’s relating to prescribed debts.

In some cases, banks have been found guilty of engaging in this illegal practice. This may sound all complicated, but the Ombudsman for Banking Services Reana Steyn is here to simplify it for all of us.

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Are some banks making you pay prescribed debt? The Banking Services Ombudsman has been receiving complaints about credit providers misleading consumers into repaying debt that should have been written off because it had been prescribed. Debt such as unsecured loans, vehicle loans, and credit cards can prescribe after a certain period of non-payment.
This means it has expired, and credit providers are no longer allowed to collect it. Reana Steyn of the Ombudsman joins me now for more.

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National Debt Mediation Association CEO, Magauta Mphahlele, discusses prescribed debt.