The judgment will not only have a significant impact on the amount lawyers can charge for legal fees on outstanding debt, but could also result in 1 million garnishee orders being removed and about R1 billion in excessive debt collection fees refunded.
This final judgment amount was made up of R1 500 interest, R7 411 of attorney fees, a collection commission of R1 140, as well as “expenses” and a “certificate fee”. In their application to the high court, Summit argued that section 103 of the National Credit Act, which includes collection fees in the calculation of the in duplum rule, should also apply to debts post-judgment. In duplum caps the maximum interest/fees that can be added to a loan at the same value as the principle debt/original loan. In many cases the debt repayments via garnishee orders would already have met the capped amount.
He said: “I take judicial notice of the notorious fact that consumers are constantly being cajoled and encouraged to apply for credit. This occurs not only by advertising but particularly by the use of mobile phone technology”. .
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