What is Prescribed Debt?

Thousands of attorneys and debt collectors demand and collect payments from borrowers, even though the debt has prescribed, which means it is no longer owed.

However, many consumers are still unaware that according to the National Credit Act (NCA) if credit providers have not contacted you in three years, they are not allowed to demand payments, says President of the Debt Counsellors Association of SA (DCASA) Paul Slot.

What is Prescribed Debt?

As of March this year, when the National Credit Act (NCA) amendment came into force, a debt is considered to have prescribed if your credit providers fail to inform you that payment is required, or if you have not made any payments on the debt within three years.

“You have every right to put down the phone of a collector trying to get you to pay prescribed debt,” Slot said.

However, TV licence, Sars and municipal debts do not prescribe.

The truth is, even prior to the NCA amendment, debts were considered prescribed after three years, apart from the above exceptions. The problem is that too few consumers actually know about debt prescription and how it works.

How Can I Protect Myself?

You can protect yourself from being milked by unscrupulous debt collectors by refusing to acknowledge the debt when they contact you. Essentially, this means to say that you did not know about the debt and also to not make any payments, no matter how demanding debt collectors are.

Saying that you know about the debt or making a payment on it would mean you cannot argue that the debt is prescribed, which means you will be liable for payment.

Always ask the person demanding payment for their details and who they work for, then report them to the National Credit Regulator (NCR).