Debt collectors wreak havoc in Harare
By Andrew Kunambura
A Harare woman recently set her two ferocious dogs on debt collectors who had visited her house to serve a threatening letter of demand over an outstanding water bill.
“They knocked at the gate once and stormed my property without permission. The dogs leapt from that tree shed and sped in their direction,” she said, gesturing as she tried to describe the action at her home in Waterfalls.
“They screamed, dropped the letter and took to their heels, noisily slamming the gate behind them to shut the dogs in. I did not restrain the dogs because I wanted them to get a taste of their nuisance,” she recounted without any regret.
She insisted she did not owe the local authority a dime as she pays her bills religiously.
With many of the country’s citizens reeling in debt due to economic challenges, getting payment from those who owe money has become a huge business for legal practitioners — with plenty of opportunities for lawyers to find work.
Ideally, a debt should be paid the moment it falls due.
Sadly, Zimbabweans are developoing a habit of not paying their debts.
Part of the reason is that the ruling ZANU-PF party has been spoiling the electorate with freebies in order to get votes.
In the run-up to the 2013 polls, power utility ZESA Holdings and local authorities were directed to write-off debts owed to them by the public.
This generosity did the trick for the party, as ZANU-PF romped to victory in the elections.
It did the exact opposite to councils, as their financial positions deteriorated further, resulting in service delivery worsening.
The freebies extended to farming inputs such as seed and fertilisers which were dished out to farmers like confetti at a wedding.
Because they are now used to free things, most Zimbabweans are not ashamed at all to default on their debt payments.
Former Reserve Bank of Zimbabwe (RBZ) governor, Gideon Gono, can bear testimony to this.
After launching the Farm Mechanisation Programme in 2007, the RBZ distributed millions of dollars worth of equipment to farmers in the hope that they would pay for it after their harvest in 2010.
Nothing of the sort happened. In the end, government was forced to inherit the debt through the RBZ Debt Assumption Bill of 2015, which was enacted into law that same year.
Most institutions are sinking because of poorly performing debtors, on top of the pile being public institutions such as ZESA, the Zimbabwe National Water Authority, municipalities and public hospitals.
In order to rein in on defaulters, most institutions are seeking the services of debt collectors to hunt down their debtors at a fee.
But this has created a big mess whereby illegal debt collectors have proliferated, taking advantage of citizens who are ignorant of the law.
The debt collectors operate without any legal mandate and mete extrajudicial settlement — one that is not legally authorised or not made in court.
Zimbabwean laws do not provide for the existence or operation of debt collectors.
Essentially, debt collection is a specific type of litigation, and only lawyers certified by the Law Society of Zimbabwe (LSZ) are required to follow up on debts on behalf of clients, and they can only attach people’s assets through the Messenger of Court or the High Court sheriff after a court order.
This is enshrined in the Legal Practitioners Act (part five), which clearly specifies that only lawyers can collect debts on behalf of clients.
Explaining the process to be followed, top lawyer Davison Kanokanga said a creditor can issue a final demand for payment in the event of a claim arising from the failure to pay for services rendered, or for goods sold and delivered or failure to service a loan according to the terms agreed between the creditor and debtor.
“The Sheriff or Messenger of Court delivers the warrant to the debtor (who is now, after the judgment has been given, called the judgment debtor) and the debtor either pays the debt or if the debtor cannot or will not pay the debt the Sheriff or Messenger of Court attaches (and possibly removes for sale) items sufficient to cover the judgment debt and costs. After selling attached property, the Sheriff or the Messenger of Court pays the judgment creditor what is due to him/her in terms of the court order,” he said.
Admittedly, high legal costs are driving many people from lawyers in preference for debt collectors.
While there are some success stories among those who sought the services of debt collectors, others have ended up regretting it after their attempts fell through due to their illegality.
Interestingly, even organisations such as the City of Harare, which has a fully-fledged legal department, have been engaging the debt collectors to collect money owed by residents in water bills and rates.
The company contracted by the city fathers has been wreaking havoc around the capital as it distributes threatening letters of demand, giving residents stringent deadlines and promising aggressive action ranging from attachment of assets and civil imprisonment in the event that the amount owed — which in some cases runs into thousands of dollars — is not paid in full.
Ominously, in some instances, money is being demanded from people who would have fully settled their bills while in other cases, people who do not have access to piped municipal water are asked to pay.
For example, some areas such Mabvuku, Msasa Park and Highlands have not had council water for years, including some parts of Kuwadzana and Budiriro that have new settlements yet to be connected to the Harare water system.
Notwithstanding the lack of provision of water, people in these areas are also being accused of failing to pay for water bills.
Some of the threatening letters have also been sent out to residents of illegal settlements, which the local authority does not recognise and has repeatedly threatened to demolish.
The city has also allowed the debt collecting company to set up a temporary banking hall at its Rowan Martin building where petrified residents could be seen flocking to make payments or negotiate payment plans.
Defaulting ratepayers are given a final urgent notice of 48 hours to pay the full amount in question.
A penalty fee based on the prevailing rate would be charged if they do not pay within the stipulated period.
“Note that you shall pay the overdue amount plus summons costs as court fees and interest thereof as well as further legal costs incurred by engaging a Messenger of Court in pursuant of the debt. Civil imprisonment proceedings shall be taken against you if you do not have enough assets to clear your debt,” reads part of a notice from the debt collector seen by the Financial Gazette.
At law, there are no 48 hour notices.
This felonious partnership between councils and debt collectors has courted the wrath of legal advocacy groups, civil society organisations and legal experts who have been critical of the existence, behaviour and operations of debt collectors.
Lawyers canvassed by the Financial Gazette said while the Legal Practitioners Act prohibits abuse by debt collectors, such as harassing phone calls and deceptive letters, no-one is paying attention to it.
“That’s like a lion trying to catch an impala,” said Harare lawyer, Takudzwa Mafongoya referring to City of Harare’s bid to unleash debt collectors on its multitude of debtors.
“It gets one from the herd, but there’s no threat to the others, yet in any case it is violation of the law and it should not be tolerated,” he said, describing debt collectors as “fake sheriffs and phantom firms”.
Sometimes the behaviour of debt collectors is egregious to the point of being ridiculous.
Some debtors are called incessantly, often well into the night.
Others reported being threatened with arrest by collectors, which is prohibited.
Some debt collectors even go to the extent of dressing and branding their cars as deputy sheriffs so that they could deliver fake subpoenas.
“They are taking advantage of people when they are most vulnerable, at the worst times of their lives,” moaned outgoing LSZ president, Vimbai Nyemba.
“Debt collection work is for legal practitioners alone and whoever attempts or purports to hold himself/herself out as a debt collector will be seriously breaching the law. In addition, such a person will also be snatching away legal work that should otherwise legitimately be that of legal practitioners,” she said.
Curiously, none of the government agencies that should be taking up these issues are bothered.
Parliamentarians are also too busy with other things while the people they purport to represent are being harassed left, right and centre without them raising a finger.
Recently, a grouping of debt collectors drew their own constitution to govern their sector although legal experts dismissed the charter as an illegal document which is invalid in terms of the law.
“I have read somewhere that there is actually a constitution they rely on as their regulating document. However, as long as they deal with the greater public, they ought to be pushing for an Act of Parliament to regulate their affairs if they really want recognition,” said Harare lawyer, Philip Nyakutombwa.
“No citizen should lose their property for a debt without due process and a court order being secured, but you get a client calling to say there is a debt collector at my house to get my property, without even a court order,” he added.
The practice of debt collection goes back to the ancient civilisations, starting in Sumer in 3000 BC.
In these civilisations if a debt was owed that could not be paid back, the debtor and his wife, children or servants were forced into debt slavery until the creditor recouped losses via their physical labour.
In some societies debts would be carried over into subsequent generations and debt slavery would continue.
The Abrahamic religions discouraged lending and prohibited creditors from collecting interest on debts owed.
By the Middle Ages, laws came into being to deal specifically with debtors. Financial Gazette