This year marks a decade of fraudulent debt collectors who have been preying on unsuspecting individuals and small businesses, using intimidation and deception to claim money that is not even owed. Disguised as a legitimate “directory listing service”, these scammers flood inboxes with threatening e-mails, citing bogus debts, interest charges and even so-called legal costs. The relentless spam calls, aggressive demands, and fear-mongering are designed to pressure innocent people into paying their ‘debts’.

These ‘debt collectors’ contact their potential victims via e-mail, requesting the completion of a form titled ‘Telephone Directory Entry’. This agreement states in eligible font that it is a ‘Free Service’, but the fine print below reveals much more sinister terms. The fine print, requiring a magnifying glass to read, refers to the payment the party is agreeing to upon completion of the form. This amount, intentionally hidden in the microscopic legalese of the terms and conditions, becomes indebted to this ‘Directory Listing’ company.

This misleading conduct is prohibited by the Consumer Protection Act, 68 of 2008 (CPA), as it protects consumers from being harassed, coerced or be made subject to unfair tactics in order to collect payments for goods or services. The CPA further prohibits misleading and deceptive representation, a tactic regularly used by scammers. The contract itself does not satisfy the requirements of the CPA due to its illegibility, making said contract not valid and not binding.

The Council for Debt Collectors (CFDC) is aware of this ‘debt syndicate’ and has found several of the debt collectors guilty of illegal conduct. Although these debt collectors are validly registered with the CFDC, they clearly disregard the Debt Collectors Act, 114 of 1998. They are reported to the CFDC, investigated, found guilty, and consequently fined and/or deregistered. However, this has proved not to be the end of this ordeal. The ‘debtors’ are merely handed over to a new debt collectors company, seemingly associated with its predecessor. In plain terms, the new debt collectors company is likely linked to the previous one, keeping the cycle of spamming and scamming going.

How to protect yourself:

• If you can’t read the fine print, don’t sign it - scammers count on you missing the details. When in doubt, we’ll read the fine print for you!
• A real debt collector will inform you, a fake one will intimidate you. Should you feel intimidated or threatened by a debt collector, it is well within your rights to report them to the Council for Debt Collectors by completing their complaint form on their website.
• Scammers thrive on confusion. Stay informed and be on the lookout for “copycat” companies. The majority of the fraudulent debt collectors have meticulously chosen the names of the companies to closely resemble another established and legitimate company - leading many people to confuse the real with the fake.

By staying informed, knowing your rights and questioning suspicious demands, you can avoid falling prey to scams.