The possible effects of POPI on Debt Collection

02 August 2021 3680

The Protection of Personal Information Act came into effect 1 July 2021. This Act is an extension of the right to privacy entrenched in our constitution. In recent years we have seen our Judicial System as well as the Legislature make a strong stance towards the right to privacy and its crucial role in a democratic society, e.g. the Constitutional Court case wherein the use of cannabis in your private space was decriminalized. For people who are consumers of said product, this was great news (for obvious reasons); however, for the legal fraternity this had larger significance. For the first time, we saw, that the right to privacy is regarded as more important that the enforcement of certain criminal sanctions.

What does cannabis and debt collection have in common? Well on the black market, maybe a few things, but normally nothing. That was until 1 July 2021. Now, just as your right to privacy regarding consumption of cannabis is a right not to be contravened, there is legislation now that regulates the right to privacy. POPI is applicable to the collecting, using, recording, storing and destroying of personal information of a data subject by a responsible party. A responsible party can be a business, juristic person or a natural persona. So basically, POPI applies to everyone. Personal information refers to biometric information, private correspondence, history, personal information, geometric information and opinions.

So, what this means is that if any person wishes to collect, store, use, destroy or record another person’s above-mentioned information, they need to get their prior written consent for a specified purpose. What effect does this have on the Debt Collection industry?

There are two schools of thought, one being that the creditor who gives the debt collector instruction to collect from a debtor is the only person who needs to provide their consent, and that by implication the debtor gave permission to be contacted when he/she undertook a credit agreement with the credit provider.

The other school of thought is that, because POPI makes no exceptions regarding the use and collection of information, that the debt collection agency has the obligation to get written consent from the debtor to use their personal information for the specific purpose of debt collection. This has the potential to send the debt collection industry into complete disarray, because the possibility exists that debtors will not give their written consent to be contacted for outstanding money, and therefore, the debt collectors will not be allowed to contact said debtor.

This is presumably an unintended consequence of POPI, and possible circumventions can be explored. For example, the debtor grants consent in the credit agreement/application that should he/she default, XYZ debt collectors is granted his/her consent to use his information in the pursuance of settling his debts. This will have to be a very well-constructed clause, as a specific responsible party (such as XYZ debt collectors) will have to be mentioned, and the purpose of granting the consent will have to be clearly formulated. However, the legality hereof will most probably be determined in what I suspect will be a new string of POPI related litigation.

Overall, POPI is a great stride toward personal autonomy and the protection of the right of privacy, however, its effects are going to be felt far and wide; and we are going to have to buckle up for this ride.

 

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