The court case, in which 13 credit providers and the law firm that facilitated the EAOs are involved, is drawing wide interest in the media. It sets out to determine, amongst other issues, the constitutionality of certain practices relating to debt collection.
The list of respondents in the matter include Flemix & Associates, who worked closely with Cambist, the minister of justice and correctional services, the minister of trade and industry and the national credit regulator.
Anton Katz SC, for the fifteen consumers who applied to have their emolument orders set aside, is quoted as saying on Monday:
“In the Flemix respondent’s responding affidavits, it is clear Flemix chose the courts in Beaufort West, Kimberley, Hankey and Johannesburg. They also give an explanation as to why they do it – Attorney Ms Jordaan says Stellenbosch Magistrate’s Court made irrational requirements which according to her compromised their access to justice. So instead, they went to another court outside the jurisdiction,” he said.
It will be quite interesting to see whether these “irrational requirements” are clarified in court.
A report by Hanna Barry on Moneyweb Today states that “…it is however submitted that the lack of proper inspection by a magistrate when granting EAOs infringes debtors’ rights to dignity. Clerks of court, who in fact process EAOs, often make no enquiries into the lawfulness of the debt and pay no regard to whether the debtor can actually afford the deductions, according to the LAC.”
A number of credit providers indicated that the EAO method was the most humane manner in which bad debts can be recovered, given the alternative of repossession of the goods involved.
Whilst one recognises the right of debt providers to recover their money, questions have to be asked about the whole practice of reckless lending which leads to this sad situation.
It is also nothing new – it goes back many years, and recent steps to rectify the situation came far too late. In a way, it reminds one of the plight of many pensioners who lost their savings in imploded schemes. In both instances, those who are most vulnerable were exploited.
One hopes that this case will lead to preventative action to address the wrongs in the system.