A lawful debt collection checklist for South African businesses

Collecting a debt lawfully in South Africa touches several different statutes at once: registration under the Debt Collectors Act 114 of 1998, the pre-litigation notice steps in the National Credit Act 34 of 2005 where it applies, fair-practice standards under the Consumer Protection Act 68 of 2008, and statutory limits on interest and charges. This is general compliance information, not legal advice — get advice on your specific collection process.

Reviewed by TefCo Compliance Research — last verified 15 September 2026.

In short

Anyone other than an legal practitioner or their employee who collects debt for someone else must be registered with the Council for Debt Collectors — collecting unregistered is a criminal offence.
Where the National Credit Act applies, a credit provider generally may not go to court without first giving the consumer a section 129 notice and observing the section 130 waiting periods.
The National Credit Act's statutory in duplum rule in section 103 caps default-related charges at the outstanding principal balance at the time default occurred.
The Consumer Protection Act 68 of 2008 prohibits unfair, unreasonable or unjust collection practices, including harassment.

Who is allowed to collect, and how they must be registered

A debt collector — defined broadly to include anyone, other than an legal practitioner or their employee, who collects debts owed to someone else for reward — must be registered with the Council for Debt Collectors under the Debt Collectors Act 114 of 1998.
A managing agent or third party collecting arrear rent or levies on behalf of a landlord or scheme is also treated as a debt collector for this purpose.
Collecting a debt without being registered where registration is required is a criminal offence.
A debtor is entitled to ask a debt collector to produce proof of registration, and the collector must produce it.
The Council for Debt Collectors publishes its own registration fees and annual subscription fees — confirm the current amounts directly with the Council before budgeting, as these change from time to time.

Before issuing a letter of demand or suing on a credit agreement

Check whether the National Credit Act 34 of 2005 applies to the agreement at all — some large agreements with juristic-person consumers fall outside it.
Where the Act applies, deliver an NCA s129 notice drawing the default to the consumer's attention and proposing debt counselling, mediation or another resolution route, before commencing legal proceedings.
NCA s130 requires at least 20 business days in default and at least 10 business days after delivery of the notice under s129 or s86; the consumer must not have responded to or must have rejected the proposals.
Confirm the consumer has not already responded by remedying the default, or surrendered the relevant property where the agreement is an instalment agreement, secured loan, or lease.
Keep proof the notice was actually delivered to the consumer's chosen address — this has been the subject of binding case law and courts scrutinise it closely.

Whether the National Credit Act applies to a particular agreement, and whether a specific notice was validly delivered, are legal questions. TefCo is not a legal advisory practice and this checklist cannot substitute for advice from a qualified legal practitioner on a specific file.

Interest, fees and the in duplum limits

Where the National Credit Act applies, interest may not exceed the highest rate applicable to any part of the principal debt under that agreement (section 103).
The statutory in duplum rule in section 103 of the National Credit Act caps the aggregate of interest, initiation fees, service fees, credit insurance costs, default administration charges and collection costs that accrue during a period of default at the unpaid principal balance outstanding when the default began.
A consumer cannot waive the protection of section 103 of the National Credit Act by agreement, even if they sign something purporting to do so.
Where the National Credit Act does not apply, a separate common-law in duplum rule still generally stops interest accruing once it equals the outstanding capital — this is a public-policy rule developed through case law, and how it interacts with a specific contract needs legal advice.
Where no rate is agreed and a mora or judgment interest question arises, the Prescribed Rate of Interest Act 55 of 1975 sets a rate that is updated by government notice from time to time — confirm the rate currently in force before relying on a figure.

Fair-practice standards under the Consumer Protection Act

Communications with a debtor must not amount to unfair, unreasonable, unjust or harassing conduct — the Consumer Protection Act 68 of 2008 protects consumers against unconscionable collection tactics.
The Council for Debt Collectors' code of conduct sits alongside this — registered debt collectors are expected to charge only the fees the Debt Collectors Act allows and to follow the Council's conduct rules.
Keep a documented, consistent process for demand letters, contact frequency and escalation — inconsistent or aggressive practices are a common source of complaints to both the Council and consumer bodies.

Frequently asked

Does an legal practitioner collecting a client's debt need to register with the Council for Debt Collectors?

No — the Debt Collectors Act's definition of a debt collector specifically excludes an legal practitioner or their employee collecting in that capacity.

Is a letter of demand always required before suing?

Not automatically for every kind of debt, but where the National Credit Act applies to a credit agreement, a section 129 notice (which functions similarly to a demand) is a precondition to court proceedings. For other debts, whether a demand is required or simply good practice depends on the agreement and the facts — get legal advice.

Can collection costs and interest exceed the amount originally owed?

Where the National Credit Act applies, no — section 103 caps default-related charges at the outstanding principal balance when default began. Outside the Act, the common-law in duplum rule serves a similar purpose, but the details differ and need legal advice for a specific case.

Sources

TefCo Corporate Compliance (Pty) Ltd is a compliance management platform, not a legal, tax or advisory firm. This guide is general information, not advice. Fees, dates and thresholds change — confirm current figures with the regulator before you rely on them.