Skywalker42
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Lawyers on the take
Issue #149, 1st March 2012
www.noseweek.co.za
Johannesburg law firm Munnik Basson Dagama Inc (MBD) is having
a fine old time with job lots of prescribed debts bought from
companies that have written them off – for their associated
collections company, MBD Credit Solutions, to pursue. Several
aggrieved recipients of letters of demand have voiced their
outrage on internet complaints sites, while one reader turned
to Noseweek.
On 30 January, he received a demand with a difference, framed
as a special offer: “We offer you an opportunity of settling
your debt at a reduced amount, FNB Card will grant you a
discount of % [sic] on your outstanding balance. Contact us
today to find out what your final discounted balance will be.”
It was an offer our reader most certainly would refuse,
responding: “Please stop pestering me with this rubbish. As I
have explained when I phoned you at my cost, if I had an FNB
card, it was so long ago, this debt has long since
prescribed.
“When I asked you for details of this claim, you said you had
none, just a balance going back many years ago. This is total
rubbish, with the banks scraping the bottom of the barrel for
more consumers to rip off with their bully tactics.”
Noseweek phoned the call centre number on the letter of demand
and an operator told us that R4 710 was owing. It related to an
FNB account where the last payment was made on 9 January
2003.
“But surely the debt has long prescribed?” we asked. This was
followed by the kind of silence you might expect if you ask
someone to explain Einstein’s theory of relativity. Eventually
it was broken: “I can offer you a discount – pay R3 297 and
we’ll close the file.”
Noseweek then phoned the law firm and asked for one of the
partners. We were put through to partner, Philemon Magolego,
who intimated that this was not the first complaint he had
received. He took our details and promised that someone would
get back to us.
That someone turned out to be an employee of MBD Credit
Solutions, Stephan Venter. He quickly dropped out of the
picture when he realised our questions dealt with tricky stuff
like ethics and morality.
Then on 7 February our reader received a letter from Munnik
Basson Dagama, signed Tediya Mathibe, saying that the firm was
acting for MBD Securitisation (Pty) Ltd, a company “who
acquired the rights, title and interest in above mentioned
account”. The letter went on to say that “we have since
received an instruction from our client to close our
collection file herein, which we have duly done.” Problem
solved.
On the same day, Noseweek received a letter from Christopher
Harradine, Executive Director of Munnik Basson Dagama, saying:
“The question of prescription is of a technical legal nature
and it is apparent that the relevant call centre agent did not
address this adequately in this instance which is regrettable
[he didn’t have a clue what it meant, more likely!]… As soon
as the query, including the question of prescription, reached
the required level within our structures [in other words, as
soon as we heard that Noseweek was involved], the correct
procedures were followed in order to inform our client of the
situation and obtain instructions on the account in question.
Once this was communicated, our instructions were to close the
account, which we duly did.”
Certainly no suggestion that any screening of claims will take
place before demands are sent out in future. And curiously,
Harradine said that “we act on behalf of First National Bank”,
with no mention of their subsidiary MBD Securitisation having
bought the debt.
So, one person’s problem has been solved because of media
involvement. And it’s a massive relief to know that in future
all of MBD’s call centre staff will be fully apprised of the
rules of prescription – and be in a position to confirm to
irate callers that those debts that were incurred more than
three years ago have fallen away.
But the letter MBD sent our reader certainly proves what we at
Noseweek have long suspected – that law firms specialising in
collections buy the debtors’ books of major corporations,
presumably at heavily discounted prices. MBD Credit Solutions
boasts on its website that the company offers “debt sale and
acquisition solutions”, and describes itself as “a substantial
buyer of consumer debt in South Africa”.
This does, of course, explain why these attorneys have no
interest in weeding out claims that have prescribed, or those
that for other reasons are unenforceable.
The attorneys have a direct financial interest in recovering
as many claims as possible, and they will have no compunction
about sending out claims that are bad in law when they know
that a significant number of people will simply pay up because
they don’t know better.
There’s the usual disconnect between what’s said and what’s
done. MBD – the law firm that sends out demands for debts that
have prescribed and employs call centre staff who believe that
prescription is something you get at the pharmacy – boasts on
its website of “maintaining the highest levels of ethics and
integrity”, “compliance with all laws and regulations”, and
“highly competent management and staff”. And MBD Credit
Solutions boasts on its website that it upholds “a zerotolerance
approach to any form of unethical behaviour”, and
that it is “compliant with the letter and spirit of the law”.
Attorneys, who like to describe themselves as “officers of the
court”, have a duty to uphold the law And a duty not to
intimidate people into paying money that they don’t owe.
Not for the first time
Back in 2010, Noseweek reported that a Randburg law firm-cumcollections
company, Van de Venter Mojapelo Inc (VVM), had
been sending out threatening SMSes and emails for debts that
had clearly prescribed or been incurred by people other than
those to whom the demands were sent (noses124, 138).
One reader had received a demand for rates owing on a house
registered in her husband’s name which had been sold nearly 40
years earlier, while another reader, David Wolpert, had
received a demand for the debt of a company with whom he had
merely been associated – (an inconvenient truth that VVM tried
to get around by sending out the demand nonsensically to
“Business David Wolpert”).
People receiving these demands had found it impossible to get
beyond VVM’s call centre, and the firm’s hard-nosed approach
went along the lines of, “We’re in possession of your ID and
you must pay unless you can prove you’re not liable”.
VVM came back with some rubbish about providing a public
service because South Africa was “being held hostage by a
culture of non-payment”.
The firm boasted about having created an enormous collections
operation – every month it processed more than 10 million
transactions, received over 150 000 calls and made over two
million outbound calls.
The firm’s website provided a fascinating look at a law firm
that saw itself as a business rather than a provider of
professional legal services, with all the dull obligations
entailed.
The firm made it clear that it saw no obligation to screen the
claims it was being instructed to collect or to satisfy itself
that they were in fact owing: “VVM’s clients have established
processes in place to screen arrear accounts prior to handover
to VVM, the ultimate onus on proving the claim vests with the
particular client”.
Wolpert had asked the Law Society to help him “stop this
unlawful terrorising of an uninvolved citizen”, but he was
given short shrift, and told that attorneys are simply
middlemen acting on their clients’ instructions and
“representing their clients regarding a claim that their
client alleges they have against a debtor”.
When Noseweek approached the Northern Provinces Law Society,
the response was a little less extreme, with the secretary
admitting that the society had considered the issue of
“misleading and unacceptable letters of demand used by
attorneys to intimidate debtors”, and that “the Law Society
has, on occasion, discussed the contents of the letters of
demand sent by attorneys Van de Venter Mojapelo Inc with
members of this firm”.
Issue #149, 1st March 2012
www.noseweek.co.za
Johannesburg law firm Munnik Basson Dagama Inc (MBD) is having
a fine old time with job lots of prescribed debts bought from
companies that have written them off – for their associated
collections company, MBD Credit Solutions, to pursue. Several
aggrieved recipients of letters of demand have voiced their
outrage on internet complaints sites, while one reader turned
to Noseweek.
On 30 January, he received a demand with a difference, framed
as a special offer: “We offer you an opportunity of settling
your debt at a reduced amount, FNB Card will grant you a
discount of % [sic] on your outstanding balance. Contact us
today to find out what your final discounted balance will be.”
It was an offer our reader most certainly would refuse,
responding: “Please stop pestering me with this rubbish. As I
have explained when I phoned you at my cost, if I had an FNB
card, it was so long ago, this debt has long since
prescribed.
“When I asked you for details of this claim, you said you had
none, just a balance going back many years ago. This is total
rubbish, with the banks scraping the bottom of the barrel for
more consumers to rip off with their bully tactics.”
Noseweek phoned the call centre number on the letter of demand
and an operator told us that R4 710 was owing. It related to an
FNB account where the last payment was made on 9 January
2003.
“But surely the debt has long prescribed?” we asked. This was
followed by the kind of silence you might expect if you ask
someone to explain Einstein’s theory of relativity. Eventually
it was broken: “I can offer you a discount – pay R3 297 and
we’ll close the file.”
Noseweek then phoned the law firm and asked for one of the
partners. We were put through to partner, Philemon Magolego,
who intimated that this was not the first complaint he had
received. He took our details and promised that someone would
get back to us.
That someone turned out to be an employee of MBD Credit
Solutions, Stephan Venter. He quickly dropped out of the
picture when he realised our questions dealt with tricky stuff
like ethics and morality.
Then on 7 February our reader received a letter from Munnik
Basson Dagama, signed Tediya Mathibe, saying that the firm was
acting for MBD Securitisation (Pty) Ltd, a company “who
acquired the rights, title and interest in above mentioned
account”. The letter went on to say that “we have since
received an instruction from our client to close our
collection file herein, which we have duly done.” Problem
solved.
On the same day, Noseweek received a letter from Christopher
Harradine, Executive Director of Munnik Basson Dagama, saying:
“The question of prescription is of a technical legal nature
and it is apparent that the relevant call centre agent did not
address this adequately in this instance which is regrettable
[he didn’t have a clue what it meant, more likely!]… As soon
as the query, including the question of prescription, reached
the required level within our structures [in other words, as
soon as we heard that Noseweek was involved], the correct
procedures were followed in order to inform our client of the
situation and obtain instructions on the account in question.
Once this was communicated, our instructions were to close the
account, which we duly did.”
Certainly no suggestion that any screening of claims will take
place before demands are sent out in future. And curiously,
Harradine said that “we act on behalf of First National Bank”,
with no mention of their subsidiary MBD Securitisation having
bought the debt.
So, one person’s problem has been solved because of media
involvement. And it’s a massive relief to know that in future
all of MBD’s call centre staff will be fully apprised of the
rules of prescription – and be in a position to confirm to
irate callers that those debts that were incurred more than
three years ago have fallen away.
But the letter MBD sent our reader certainly proves what we at
Noseweek have long suspected – that law firms specialising in
collections buy the debtors’ books of major corporations,
presumably at heavily discounted prices. MBD Credit Solutions
boasts on its website that the company offers “debt sale and
acquisition solutions”, and describes itself as “a substantial
buyer of consumer debt in South Africa”.
This does, of course, explain why these attorneys have no
interest in weeding out claims that have prescribed, or those
that for other reasons are unenforceable.
The attorneys have a direct financial interest in recovering
as many claims as possible, and they will have no compunction
about sending out claims that are bad in law when they know
that a significant number of people will simply pay up because
they don’t know better.
There’s the usual disconnect between what’s said and what’s
done. MBD – the law firm that sends out demands for debts that
have prescribed and employs call centre staff who believe that
prescription is something you get at the pharmacy – boasts on
its website of “maintaining the highest levels of ethics and
integrity”, “compliance with all laws and regulations”, and
“highly competent management and staff”. And MBD Credit
Solutions boasts on its website that it upholds “a zerotolerance
approach to any form of unethical behaviour”, and
that it is “compliant with the letter and spirit of the law”.
Attorneys, who like to describe themselves as “officers of the
court”, have a duty to uphold the law And a duty not to
intimidate people into paying money that they don’t owe.
Not for the first time
Back in 2010, Noseweek reported that a Randburg law firm-cumcollections
company, Van de Venter Mojapelo Inc (VVM), had
been sending out threatening SMSes and emails for debts that
had clearly prescribed or been incurred by people other than
those to whom the demands were sent (noses124, 138).
One reader had received a demand for rates owing on a house
registered in her husband’s name which had been sold nearly 40
years earlier, while another reader, David Wolpert, had
received a demand for the debt of a company with whom he had
merely been associated – (an inconvenient truth that VVM tried
to get around by sending out the demand nonsensically to
“Business David Wolpert”).
People receiving these demands had found it impossible to get
beyond VVM’s call centre, and the firm’s hard-nosed approach
went along the lines of, “We’re in possession of your ID and
you must pay unless you can prove you’re not liable”.
VVM came back with some rubbish about providing a public
service because South Africa was “being held hostage by a
culture of non-payment”.
The firm boasted about having created an enormous collections
operation – every month it processed more than 10 million
transactions, received over 150 000 calls and made over two
million outbound calls.
The firm’s website provided a fascinating look at a law firm
that saw itself as a business rather than a provider of
professional legal services, with all the dull obligations
entailed.
The firm made it clear that it saw no obligation to screen the
claims it was being instructed to collect or to satisfy itself
that they were in fact owing: “VVM’s clients have established
processes in place to screen arrear accounts prior to handover
to VVM, the ultimate onus on proving the claim vests with the
particular client”.
Wolpert had asked the Law Society to help him “stop this
unlawful terrorising of an uninvolved citizen”, but he was
given short shrift, and told that attorneys are simply
middlemen acting on their clients’ instructions and
“representing their clients regarding a claim that their
client alleges they have against a debtor”.
When Noseweek approached the Northern Provinces Law Society,
the response was a little less extreme, with the secretary
admitting that the society had considered the issue of
“misleading and unacceptable letters of demand used by
attorneys to intimidate debtors”, and that “the Law Society
has, on occasion, discussed the contents of the letters of
demand sent by attorneys Van de Venter Mojapelo Inc with
members of this firm”.
