Posted by: Tugs | 2004/10/21

Listed after Company bought debtors book.

I am posting this for the second time and Don't tell me to go to my manager.

Can someone please explain the last bit about debt being extinguished. Please read below.

Question: If a company buys off a retail credit book can they list you without informing you that you have arrears due ?

When a creditor sells a book debt to company X ,the creditor cedes his rights against the debtor to company X , the effect is that company X steps into the shoes of the creditor and whatever claims could have been enforced by the creditor against the debtor can now be enforced by company X .Under the common law the creditor or company X (if the creditor has ceded his rights against the debtor)may provide default information to a credit bureau without informing the debtor.The issue of supplying the debtor's default information to a credit bureau without the debtor's knowledge is a privacy issue and under common law there is only liabilty for an unlawful and intentional interference with the right to privacy . As the supplying of default information to a credit bureau is not an unlawful act and also in the public interest there would be no liabilty under the common law .It should however be noted , that the South African Law Commission is in the process of formulating data privacy legislation which will require a creditor or a company buying the debt from the creditor to notify the debtor prior to supplying default information on that debtor to a credit bureau .Also the Credit Bureau Association Code of Conduct requires a creditor to notify a debtor prior to supplying default information to a credit bureau on that debtor , this duty will pass to the company that buys the debt .Further it should be stated that a debt is extinguished through prescription or the passage of time , normally prescription runs for three years from the date that the debt became due , if a debt has been extinguished by prescription neither the creditor nor the company buying the debt can supply information to a credit bureau about the extinguished debt and the sale of the debt does not interrupt the running of prescription .The three year prescription period does not apply to judgment debts .
Date: 11/10/2004

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Our expert says:
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Dear Tugs

I am not an expert on this issue. My topic is financial pshychology. Maybe you need to discuss this issue with a laywer friend.


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