How safe is your money with debt collectors?

Elias Z Mapendere
A friend of mine recently approached me with a request that most readers of this popular family newspaper will find funny, he wanted me to enlist my services as a lawyer to collect a debt from a debt collector.
According to my friend, he had instructed the latter to collect a debt on his behalf, only to learn from the original debtor that all the money owed plus several “costs” and “disbursements” had been paid to the debt collector but several months down the line, the money still remained with the debt collector whilst he was languishing in poverty.
This raises a pertinent question. How safe is your money with debt collectors?
A perusal of most newspapers, especially during the first quarter of the year, would show that most organisations call for different suppliers to express interest in doing business.
The list of suppliers also includes debt collectors.
If you ask why most people choose debt collectors instead of registered legal practitioners, they are likely to tell you that it is because debt collectors are less expensive than lawyers.
Only a few people realise the pitfalls of using debt collectors.
Debt collectors do not have right of audience before courts of law. The only persons with right of audience before a court of law on behalf of a client are legal practitioners registered by the High Court of Zimbabwe with a valid practising certificate.
This explains why debt collectors use threats of attaching property as if a person can do that without a court order. Indeed, some misguided elements within the debt collection fraternity have attempted to do so or have done so without court orders.
It also not uncommon in the debt collection jungle for one to be served with a letter, with an “Urgent” red sticker indicating that property is going to be auctioned.
It might be of assistance to point out the procedures that are laid down by the law before property is attached and auctioned.
The first stage is that the person claiming a debt should cause summons to be issued by the Clerk or Registrar of Court. After several litigation stages, the Plaintiff can be granted judgment by the court. All along, as aforesaid, only a registered legal practitioner can appear for the person claiming the debt.
After judgment, attachment follows. This is done by the Messenger of Court or the Sheriff who will then instruct an auctioneer to sell property by means of auction. Any attempt to auction or attach property outside the procedure laid by law is illegal and can be reversed by a court of law with dire consequences.
Basically, what this translates to is that if a person is not shaken by the threats of debt collectors, the latter cannot appear in court on behalf of a client. This explains why the threats emanating from debt collectors can be of such intensity that no sane lawyer can dare utter them.
Our society is becoming more and more legally literate and litigious these days. Members of society who know that debt collectors do not have right of audience before courts just throw the threatening letters into the dust bin.
Thus, the success rate of debt collectors depend heavily on members of society who remain in darkness about the true status of debt collectors in as far as their threats are concerned.
The second major pitfall is that debt collectors, unlike registered lawyers, do not maintain trust accounts. Lawyers are compelled by law to open business and trust accounts. They then use business accounts for their own earnings. Trust accounts are sacrosanct because this is where money belonging to other people, in our context, creditors, is kept.
As said before, lawyers must also be in possession of practising certificates issued by the Law Society. Before the latter renews a practising certificate, amongst other requirements, a lawyer must show that their trust account was audited and certified to be in order.
This is beside the spot checks that are done to ensure that trust funds are safe.
When it comes to debt collecting, there is no law that compels debt collectors to maintain trust accounts. If some do so, which is doubted, they do so on their own accord.
The other safety net for clients is that the Law Society is enjoined to maintain a compensation fund into which all lawyers contribute an agreed amount of money. If a client proves that a lawyer has disappeared with their money, they can consult the Law Society with a view of getting some compensation from this fund.
Again, this does not apply to debt collectors. They do not mantain any compensation fund. If the debt collector disappears with the client’s money, the only option would be to pursue the matter though criminal or civil channels.
However, this only applies where the debt collector is still within the jurisdiction of the local courts.
At the end of the day, the cheaper channel might end up more expensive. The creditor might end up pursuing the debt collector instead of the debtor. The original debtor would have to be persuaded to metamorphosise into a witness.