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Debt collectors are ‘illegal’


BULAWAYO is generally viewed as a risky city to do business due to the rapid closure of industries over the years. The formal working population has shrunk giving rise to the informal sector, but the cost of living continues to rise.


Residents are expected to pay their bills on a regular basis, but with little disposable income. Borrowing has increased, but repaying is a struggle.

This has given rise to a thriving sector of loan sharks and debt collectors whose operations are viewed as being vicious and non-forgiving. Scores of former Mpilo Central Hospital patients in Bulawayo were last week issued with notices to attach property by Well Cash Debt Collectors after reportedly failing to pay medical bills. Some of the bills were for treatment rendered two years ago and the former patients were given 24 hours to pay up.

The notice contained a “scary” line which read: “We are sorry with great concern to say if no payment is made at our offices, your property will be removed legally through the court for non-payment of the debt.”

This caused panic among the affected and there was a hive of activity at Well Cash Debt Collectors’ Robert Mugabe and 4th Avenue offices. However, debt collectors have come under scrutiny with legal experts saying they were illegal.

A working definition of a debt collector is a company that specialises in dealing with accounts that are in long-term arrears.

They put mark-ups termed administrative costs on the money owed. A city lawyer Nqobani Nyathi said under the Legal Practitioners’ Act (Chapter 27:07) under Section 9, it was only a legal practitioner with a valid practicing certificate that can issue out letters of demand threatening legal action.

“Debt collection work is for legal practitioners alone and whoever attempts or purports to be such (a debt collector) will be seriously breaching the law,” she said.

“At law, their operations are illegal. They attempted to engage the Law Society of Zimbabwe to regularise their operations, but not much was achieved.

“The problem with debt collectors is on accountability. For instance, who do they report to and what happens if they (debt collectors) do not remit all the funds to the institution that would have hired them?”

Several affected people last week contacted Southern Eye to express their frustration with debt collectors. Some said they were forced to pay for services which are for free.

“My relative received a letter from Well Cash notifying her that she owes the hospital $24 for a hernia operation she underwent last year. To our surprise, the operation was being sponsored by Pastor Tom and Bonnie Dueschle of Celebration Church International and was for free under the Hernia Week,” a woman who identified herself as Rejoice said.

“Now Mpilo wants us to pay for treatment that was free for patients. I strongly suspect corruption at the hospital. When we called the Mpilo accounts department, they said there could have been a mix-up on forwarding of names to the debt collector, but we still have to pay.”

In June 2013, scores of people had  free  operations at Mpilo Hospital by a team of specialist doctors from the Bulawayo medical fraternity. Many disadvantaged children and teenagers who were born with abnormal lumps on their tummies medically known as hernias which require surgical treatments to correct the defects, benefited.

Another affected resident Sandra Moyo said she gave birth in 2012 and owed $64 maternity fee, but to her surprise she was not given a receipt.

“I went to pay on Wednesday, but they could not give me a receipt as proof of payment. They said that’s how they operate. But how will I know that they are a genuine company?” Moyo asked.

Bulawayo Progressive Residents’ Association (Bpra) called on the government to clarify the legality of the operations of debt collectors in as far as they placed a surcharge on what citizens owe a government institution in order to realise profits.   

“Residents view the institution’s recourse to engaging debt collectors in its move to recover outstanding bills as an indication that the institution’s management and board are not concerned with the welfare of the residents of Bulawayo, but rather concerned with increasing revenue at all costs.

“Residents also believe that attachment of properties over medical bills shows that Mpilo Hospital authorities do not understand the Zimbabwean environment which is characterised by high unemployment and poor remuneration of workers, which makes it difficult for patients to make their payments once-off,” Bpra programmes officer Zibusiso Dube, said.

Dube said residents are even more concerned that in the quest to recover its debts, Mpilo Hospital has engaged a debt collection firm based in Harare that is adding exorbitant mark ups making it even more difficult for the debtors to pay-up.

“Bpra contends that the mark-up amounts to extortion and believes that residents should only be paying what they owe. As it is, most of the debtors may not be able to meet the surcharges and thus face the pain and ignominy of losing their properties to the debt collectors,” Dube said.

Mpilo Central Hospital engaged debt collectors in February last year saying it was finding it difficult to recover $8 million it was owed by debtors which was affecting its operations. After advertising, Well Cash Debt Collectors from Harare won the tender.

Although terms of the debt collection were not made public, it is understood the hospital was not charged anything and costs were passed to the already burdened patients.

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