Debt: How to claim prescription in practice and how to enter a special plea

[Citizen X]

Hi Guys,
1. I have resolved to make one post that is not theoretical but rather very practical and that will answer every single question you could possibly have on the Prescription Act 68 of 1969, claiming prescription in practice, entering a special plea of prescription and proving that you’ve claimed prescription
2. Find attached 5 documents, a FAQ doc, an example of a prescription claim letter, an example of a summons, an example of a special plea for prescription; and an affidavit(to prove that you’ve claimed prescription). In all cases modify these documents to cater for your individual case and details etc;
3. Let’s assume that a creditor/debt collector/ attorney contacts you to demand payment for a debt that is indeed prescribed(this letter is for debts that prescribe after 3 years! See FAQ for more information!), then do the following:-
3.1. Modify the attached prescription claim letter to include your individual details, send this letter as an email attachment to the creditor/attorney or debt collector, also send this letter by registered post(keep the slip!!);
3.2. If the creditor refuses to acknowledge the prescription claim, complete an affidavit to that effect and keep for your records. This will prove beneficial if the creditor still pursues the matter to court
How to enter a special plea of Prescription



1. Regardless of whether you receive an ordinary summons or combined summons you still need to enter a notice of intention to defend with the clerk of courts and the plaintiff’s attorney;

2. A special plea is called “a plea in abatement” which quite essentially destroys the entire action, here you not denying that the debt existed and that you did once upon a time in fairy land owed that money but merely that the debt is prescribed, the plaintiff has no cause of action! So use the attached ‘precedant,’(form) and modify it to your individual circumstances. You file this with the clerk of courts and the plaintiff’s attorneys

The magistrates court rules has undergone some major revamping in the past 3 years so be very careful about what you “google”. What I am providing you with is accurate and up to date as at today’s date.
The plaintiff can either sue out combined summons or summons in respect of debt claims. In either case you still need to file a notice of intention to defend!
What was previously known as , “summons commencing ordinary action,” has been replaced by “summons: claims in respect of debt or liquidated demand.



Happy hunting! Take on Steve from XYZ bank, enforce your rights, the fact is that when the law is on Steve from xyz bank’s side Steve pursues you vigorously and without mercy. Steve from xyz bank don’t care whether you live or die!! So don’t let your rights be infringed and remember: “The biggest man you ever gonna see was once a baby!” Bob Marley

Steve from xyz bank may be a very, very big tree BUT, “ If you are a big, big tree, we are a small axe, ready to cut you down, sharpened to cut you down!” Bob Marley

Steve from xyz bank may be a giant BUT David slew Goliath with a sling and a stone. Steve from xyz bank may be a huge army BUT Samson slew the philistines with a donkey’s jaw bone!! He said, Today, I made a donkey of you with a donkey’s jaw bone.”

[Modise]

Hi Vanash,
What is your personal email?

[Citizen X]

Hi Modise,

terribly sorry for the late reply. I sent you a private message with my email address...

[Citizen X]

Steve from abc mobile company!
I stand to be corrected but I was really under the impression that there is only a Steve from XYZ bank. It seems Steve from xyz bank has left xyz bank and is now working for a mobile company.
Brief synopsis. Mr X takes out phone contract in 2007, he diligently pays for about 5 months and then looses his job after which he never pays again. He doesn’t acknowledge debt and there are no other events to interrupt prescription. A prescription claim is served in January 2012. Steve from abc mobile company argues that the contract was signed on 23 february 2008 and that it’s a 24 month contract and that as such the contract ends on 23 February 2010. And furthermore in light of this the debt will only prescribe on 23 February 2013!!! Now, I’m speechless. Well, I’d never is the sigh! The Act is very specific about when prescription begins to run and furthermore there has been about 25 Supreme Court of Appeal cases which confirm when prescription begins to run. Prescription begins to run when the debt becomes due, the debt becomes due when the debtor fails to make payment, I.e in this specific case the debt became due on 30 July 2008, prescription runs from this date and not the date when the contract ends. So in practice this debtor becomes eligible for prescription on 30 July 2011.
When Steve from xyz mobile gives you such layman’s perspective on prescription, don’t be discouraged and certainly don’t give up! You go back with rebuttal or replication!!!
Happy hunting!!!

[Citizen X]

How to challenge listing on credit bureaus, on what grounds to challenge such listings and the new retention periods
Dear Rocktheboat ,
I think the email I sent you earlier today clarifies your legal position adequately! I think many other people may face a similar predicament to post the following.
But, FIRST, I like the name ‘Rocktheboat!’ One of my favourite songs, ‘satisfy my soul: Bob Marley articulates how he doesn’t like his boat to be rocked! "Satisfy My Soul"Oh, please don't you rock my boat (don't rock my boat) 'Cause I don't want my boat to be rockin' (don't rock my boat)I'm telling you that, oh, oh-ooh, wo-o-wo! I like it - like it this (I like it like this, I like it like this) -So keep it steady, like this. For every little action there's a reaction.”
Now, for this current matter:
1. Your argument does indeed have merit! Let me explain as follows:
2. If you had not paid that personal loan debt, I would have been able to successfully claim extinctive prescription for you and have that debt completely extinguished. This simply means that had extinctive prescription been claimed, the debt would have been completely written off. The creditor then would have been obligated to update all systems including credit bureaus accordingly on the simple basis that derogatory remarks cannot exist for a debt that does not exist in law. If there’s no debt then it follows logically that there should be no derogatory remarks. This however, naturally, doesn’t apply to your individual situation as by your own admission you have in effect paid a debt which would have been eligible for an extinctive prescription claim;
3. For the sake of clarity i deem it necessary to distinguish between a payment profile and a listing, a payment profile stay on the credit bureau for 5 years where listings have varying periods of retention from 1 year to 10 years after which it must be automatically removed(the period of listing will depend on the type of listing). The only exception is where you have been liquidated in which case the listing can stay on the credit bureaus literally for an unlimited period of time!!!
4. Your main issue in dispute now is when was the debt listed on the credit bureaus and perhaps more importantly why it was not automatically expunged;
5. There are two pieces of law that applies in your individual case: 1: The National Credit Act 34 of 2005 and more relevant to your current predicament 2: National Credit Regulations 2006;
6. The National Credit Regulations of 2006 is called enabling legislation, it’s purpose is to give effect to the National Credit Act 34 of 2005;
7. We now need to identify the type of listing. The listing in your individual case is called a bank default listing and falls under the category of ‘adverse listing,’
8. Allow me to impress upon you that even a judgment debt listing can only be retailed on credit bureaus for 5 years after which it must be automatically expunged. Failure to do so would otherwise constituted an irregularity!
9. One of the reasons why there is often confusion as to the interpretation of a statute is simply because one person will be referring to a repealed section of the same act and another person will rightfully be referring to the new amended section of that same act. The secret in law is simply to keep updated with the latest amendments and proper interpretations thereof!
10. In the past the default listing of personal loan banking default adverse listing could only be retained on a credit bureau for 1 year from date of listing, this was found in chapter 3 of the National Credit Regulations 2006, section 17. There has however been an amendment! This amendment is referred to as “Amendment of the Regulations made in terms of the National Credit Act, 2005 (Act No. 34 of 2005) as published in Government Gazette No. 28864 Vol 491 on 31 May 2006”. In practice what this simply done was to add a new classification:”Adverse classifications of enforcement action Classifications related to enforcement action taken by the credit provide 2 years.” In practice to be listed for this 2 years the creditor must have handed over the account to an attorney or debt collector, so it will say:’handed over,’ I do know for a fact however that certain creditors don’t hand over the account at all but to punish you for the maximum period they inform the credit bureaus that it was handed over so that the listing can stand for 2 years.;
11. What to do now? You now essentially want to assert your rights
12. To do so you need to essentially formally complain to the National Creditor regulator about the listing itself, the circumstances surrounding the listing and further insist that your challenge to the listing must also be included on all credit bureaus so that anyone who lawfully makes an enquiry on your name gets both sides of the story, instead of just seeing the creditors adverse version of events.
13. What many consumers unfortunately are unaware of is that a financial institution has not complied with the NCA regulations if they don’t give you prior notice of their intention to list with the credit bureau and/or give you an opportunity to make arrangements to pay. You can rightfully complain about xyz bank on this ground and also put them to the proof of having given you such prior notice!
14. Here’s where it gets interesting! There is a body called the Consumer Credit Association. All there members have agreed not to remove a default listing even when you as the debtor have come forward and paid them in full!!!!! In general in this case you must first ask the creditor if they are a member of the CCA, and if they inform you that they are, you simply tell them that you want a signed letterhead stating that should you pay them in ful and final settlement they will give instructions to the credit bureau to remove the default listing. This is called a suspensive condition, it suspends certain rights and obligations until the fulfilment of an uncertain future event. If you get the signed letter, you then pay, upon paying the creditor then sends out instructions to the credit bureau
15. How do you do this: Firstly you can visit the NCR website, which is very informative, at www.ncr.org.za, their contact details are 0860 627 627 and the email address that you sent your complain to is complaints@ncr.org.za
16. How to phrase your complaint:


In subject box of your email: Complaint: ID No:0000000000

Body of your email

Dear Sir/Madam,

1. I refer to the above matter;
2. I hereby formally complain against the listing made by xyz bank against me regarding a personal loan account no:00000, listed on 10/05/2009;
3. My complaint is in terms of section 72 of the National Crefit Act of 2005 read in conjunction with the National Credit Regulations of 2006, section 20(1), (2) 7 (3)
4. The basis of my complaint is as follows:
4.1 Firstly, the credit provider xyz bank did not inform me beforehand of their intention to list the default. Thet are lawfully bound by section 72(1) of the NCA to inform me beforehand of this intention which they failed, alternatively neglected, alternatively refused to do. Section 72(1) reads as follows: “72 (1) Every person has a right to-(a) be advised by a credit provider within the prescribed time before any 30prescribed adverse information concerning the person is reported by it to a credit bureau, and to receive a copy of that information upon request.” I hereby complain that xyz bank has committed an irregularity;
4.2 Secondly, in terms of section 72(c) of the NCA I hereby challenge the listing by XYZ on the following grounds, it should have been expunged after 2 years from the date on which it had been listed. Section 72(c) reads as follows:”(c) challenge the accuracy of any information concerning that person-(i) that is the subject of a proposed report contemplated in paragraph (a); or(ii) that is held by the credit bureau or national credit register, as the case may be, and require the credit bureau or National Credit Regulator, as the case may be,to investigate the accuracy of any challenged information, without charge to the consumer; and(d) be compensated by any person who reported incorrect information to a registered credit bureau or to the National Credit Register for the cost of correcting that information.”
4.3 Thirdly I also want my challenge to be included on all credit bureaus.
Kindly revert and pleas advise accordingly.
Kind regards,
xyz

For a more detailed explanation with the actual retention period tables(before and after) see attached PDF

[Citizen X]

The covering letter and prescription claim precedent/template(as an email attachment)


Okay, so I’m being presumptuous! You now understand how extinctive prescription works, you also understand what will preclude you from successfully claiming extinctive prescription. You confident that none of the events that interrupt prescription apply to your case. The type of debt is one that becomes eligible for extinctive after a period of 3 years has elapsed from the date of your last payment. Section 11(d) is applicable for such debts. This is by and large: personal loans, credit cards, clothing accounts, vehicle finance,, cell phone accounts etc. You’ve made a quality decision to assert your rights, you good to go!

You need a covering letter and preferably two methods of service on the creditor and/or their attorney. I advocate email and personal service but email and registered mail will also work. Even though emails are classified as ‘data message,’ by the ECT and is admissible as evidence. A potential problem with an email is simply this, it will reflect in your sent items but the recipient can claim that it went directly to spam or that someone may have deleted. This is the rationale for two modes of service.

The covering letter(email)(You attach the modified extinctive prescription claim precedent/template)

Subject box: XYZ bank: Account number 123456: Id number: 0000000000

“Without prejudice and all rights reserved.”

1. I refer to the above matter and further to my attached extinctive prescription claim;
2. I hereby serve my extinctive “PRESCRIPTION CLAIM” on you with regards to a XYZ Bank account ,
3. In keeping with legislative requirements, industry generally accepted norms and good corporate governance, kindly process my extinctive prescription claim and confirm to writing on your signed letterhead that this debt is indeed prescribed and that your computer systems and credit bureaus have/will be updated accordingly with regards to this prescription claim.
4. I submit that the standard manner in which a prescription claim is processed is as follows: The creditor establishes when the last payment was made. The debt then becomes due and payable a month later. Should a period of 3 years elapse from the date of the last payment the debtor becomes eligible for prescription. The creditor ascertains if the debtor is listed on XDS, Experian and Transunion ITC. The credit establishes whether any events to interrupt prescription has transpired such as actual payments or acknowledgement of debt. Should these exceptions not apply, the creditor then confirms in writing on their signed letterhead that the debt is indeed prescribed, that they have/will update all credit bureaus and furthermore that they abandon their claim on this matter;
5. The last payment made on this account was on 30 July 2007, This debt became eligible for extinctive prescription on 30 July 2010 which I now formally claim.
Kindly revert and please advise accordingly
Kind regards,
Jack The Ripper
“Without prejudice and all rights reserved.”

[Citizen X]

Food for thought!
The concept of prescription is not new at all. It originates from Roman law. It dates back to what is commonly referred to as ’The era of early Roman Law(753 BC – 250 BC).’ The earliest manifestation of prescription dates back to 450 BC to what is known as the ‘Twelve tables.’ The law was literally written on metal plates and placed in the central business district of that day. Anyone could go and inspect this written law. In 448 BC extinctive prescription was not distinguished from acquisitive prescription. It noteworthy that the concept that one could obtain rights merely by the passage of time can be traced to The Law of the Twelve Tables. The Twelve tables were written on twelve bronze tablets which were strategically placed in the central business district of that day so that all could read its contents. Table six, law six reads as follows: ‘Immovable property shall be acquired by usucaption after the lapse of two years; other property after the lapse of one year.’ So there it was for everyone to see, the simple passage of time could allow you obtain rights today, which as early as yesterday you did not enjoy!
I have conducted quantitative as well as qualitative research with regards to extinctive prescription claims. My focus is strictly and only debts that prescribe in 3 years provided that there was no payment and acknowledgement of debt during this time. This by and large includes personal loans, credit cards, retail apparel account etc. At this juncture I just want to highlight findings of my quantitative research conducted via a questionnaire of some 30 questions and 3086 respondents. 2653 , 86% provided that they learnt about extinctive prescription via the internet. 2356, 76% provided that they were contacted regarding a debt that was more than 5 years old. 788, 25% provided that after the fact of making a payment they realised that they essentially changed their own legal position to their own detriment by causing prescription to run afresh. They provide that they feel robbed and cheated!
Must we reinvent the wheel? Must we revert to the Twelve Tables style of law? Naturally the following is just for satirical gesture but if the following sign was posted at every bank, financial institution and major retailer. The aforementioned will either ensure that they sue out actual summons during this period or accommodate extinctive prescription claims which they are lawfully obliged to do!

[Mark101]

Hi Vanash Naick, I stumbled on to your thread and I must say thank you very much I am in the same predicament as most people who asked questions about Prescription and this has been a revelation. Thank you for your advice and the time you take to answer all the questions.

[Citizen X]

Hi Vanash Naick, I stumbled on to your thread and I must say thank you very much I am in the same predicament as most people who asked questions about Prescription and this has been a revelation. Thank you for your advice and the time you take to answer all the questions.

Mark, it is truly I who am thankful that I'm in a position to help! I thank you for your very kind feedback, we need to start getting involved in public comments phases of all Bills. This is one way, you and I as ordinary South Africans can take ownership of our Country. All South Africans should become more involved, especially when there's a new Bill and the public is invited to comment. That's your chance to make a difference!!!

[Candice F]

Hi Vanash,

Just wanted to publicly thank you for the excellent work you did to get all my matters sorted out, all 9 of them! You have been fantastic and kept me in the loop at all times, I appreciate it and gladly will recommend your services to anyone needing them.

I have a great sense of relief and can move on with my life without feeling threatend any longer!

Thank you very much once again!

Kind regards,
Candice