Your salary at mercy of anonymous forgers

RENE GROYER’S story echoes that of thousands of South Africans who - with no prior warning or opportunity to have any input - suddenly discover they have less take-home pay than usual. Thanks to an emoluments attachment order (EAO) on their salary.

The EAO is commonly, but not strictly correctly, referred to as a garnished order in South Africa.

The system, designed as a means for creditors to get back from debtors what they are owed, is flawed and widely abused in this country, leading to substantial consumer suffering.

A study undertaken by the University of Pretoria’s law clinic, “the incidence of and the undesirable practices relating to garnishee orders in South Africa”, published in October last year, found widespread exploitation of debtors, including:

• Emoluments attachment orders are not obtained in courts within the jurisdiction of the alleged debtor’s home or workplace, as the law stipulates.

A debtor living and working in rural KwaZulu-Natal, for example, would find it very difficult to challenge a garnishee order issued in a Gauteng court.

• “Contingency fees” of up to 25 percent, which credit providers often pay debt collectors and lawyers for recovering their money, are unlawfully added to the capital amount, instead of this amount being deducted from the money collected - in other words, the “kickback” is passed on to the debtor, massively inflating their debt burden.
• When applying for credit, many consumers unwittingly sign forms consenting to judgement and emoluments attachment orders should they default, which are then acted on years later, without notifying them.
• Some tracing agents tasked with obtaining debtors’ signatures on Section 58 forms consenting to judgment, simply forge their signatures.
• Many court officials don’t establish whether the deduction of the garnished amount will leave the debtor with enough money to live on.

Huge numbers of South Africans have “garnished” salaries.

  The University of Pretoria’s law clinic study, commissioned by international development agency GTZ, found that of the country’s 1.1 million public servants, about 20 percent had at least one garnishee order on their salaries.

Groyer acquired hers in February this year, the alleged debt going back more than 10 years, and she’d not been contacted by anyone in connection with if during that time. She left Joburg in 1998 and moved to Cape Town where she has lived since then.

Before she did so, she closed the cheque account she had with Standard Bank in Kruis street, believing that she did not owe any money to the bank. Fast forward to February: Rene’s employer informs her that the company has received a court order instructing it to deduct450 from her salary every month and pay it over to attorney Andrie van der Walt of Piet Retief in settlement of a Standard Bank debt of R4662. On top of which would be added 15 percent interest per annum plus further collection costs.

The order was obtained in the Kempton Park Magistrate’s Court in early January and, as is so often the case, Groyer had absolutely no idea that it had happened.

She received no notification about the court process; much less a summons, yet the attorney knew exactly where to send the Sheriff of the court to serve the emoluments attachment order on Groyer’s employer in February.

With the help of her father, Edward, Groyer vigorously objected, writing to Standard Bank and the debt collections company, CMS the judgment and garnishee order have since been rescinded by refund R1 350.

So, did Groyer ever owe money to Standard Bank, and if so, how much? According to Standard Bank, the matter has long prescribed and they can find no details about the debt on their system. All they knew is that a debt of R3 781 in respect of the account that Groyer closed in 1998, was acquired by the CMS Group for collection in November 2002, which in turn handed it to Van Der Walt in 2005.

With the debt long prescribed, the only way to obtain that garnishee order was with the production of a Section 58 form signed by Groyer, consenting to a judgment and a garnishee order.

Edward Groyer told me that when he contacted Adelaide Williams of CMS, she had claimed to be in possession of such a form, signed by his daughter, “Rene denied that she had signed any such admission and the submitted two copies of her signature to Adelaide to verify her denial,” he said.

“Adelaide then admitted that the signatures were different, but did not respond to my request to see the obviously forged document.’ With the tangled web unravelling - exposing the forged signature - CMS and the attorney clearly had no choice but to reverse everything and refund Groyer.  But there is no doubt that many others without the means, to challenge the various companies involved and have their emoluments attachment orders either cancelled or amended, continue to lose chunks of their salary that are illegitimate or inflated.

I contacted Williams of CMS and asked her what actions, if any had been taken against the collection agent responsible for obtaining Groyer’s signature on that Section 58 form and what steps had been taken to establish how many times he or she had similarly forged the signature of alleged debtors on acknowledgement of debt forms, which have led to garnishee orders.

Responding, Williams said the following: “the collections agent that we appointed uses external tracers nationally to sign the Section 58 with Debtors and send it back to their offices.

“It therefore makes it difficult to know with certainty whether the document was in fact signed by the debtor:

“However, we randomly call debtors where any of our agents have obtained garnishee orders and inquire whether a tracer came to see them to obtain the signed document… but due to the high volumes of accounts that we have, it is not currently possible to call all the debtors to confirm the information and we urge the agents to take care of this function for us.

“Therefore we have to rely on debtors to come forward, should they have any queries.”

I pointed that she had not directly confirmed that Groyer’s signature had been forged, nor had she addressed the question about whether the tracer responsible for acquiring that signature on that form was ever disciplined.

For me< the most alarming but of her response is this admission: “ It therefore makes it difficult to know with certainty whether the document was in fact signed by the debtor.”

When you contemplate the power that a single forged signature holds in terms of allowing a person’s salary to be “raided” without their input or knowledge, that’s a horrifying prospect.

Clearly, the entire system needs a judicial overhaul.

• This article is from the Cape Times Tuesday, 24 November 2009. By Wendy Knowler. The Consumer watch is published twice weekly. Email consumer@knowler.co.za or fax 0866 038 145.

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