Understanding prescribed debt: why millions of South Africans pay expired credit

In theory, prescribed debt offers relief: if a debt hasn’t been acknowledged, paid, or legally pursued within three years, it’s no longer enforceable. But in reality, many South Africans are still being hounded for these expired debts, and most don’t know they have the right to say no.

Many consumers don’t realise they have rights when it comes to old debt. If you haven’t made a payment, acknowledged the debt, or been legally pursued in three years, it may be prescribed, and no longer legally recoverable. But even a simple phone call where you say, ‘I’ll pay when I can’ can restart the clock.

The National Financial Ombud (NFO), South Africa’s financial watchdog for consumer justice, handled 40,859 cases in its first year (March 2024–March 2025) across banking, credit, insurance, and other financial services, resolving over 60% of credit-related cases—including many prescribed debt disputes—in favour of consumers.

The bigger issue is how prescribed debts often remain on credit reports, damaging people’s chances of renting homes, securing jobs, or qualifying for new credit. Why are credit bureaus still listing prescribed debt? We’ve seen countless cases where consumers are unfairly penalised for debts that should’ve been erased years ago.

What is prescribed debt?

Under South African law, most credit-related debt prescribes after three years of no payment, acknowledgment, or legal action. This is governed by the Prescription Act. Yet debt collectors continue to chase these expired debts — often using aggressive tactics, unclear language, or verbal traps.

In townships and rural areas, many consumers are approached in their home language and pressured into making promises they don’t fully understand. “Just answering a call or saying ‘yes’ can have consequences. That’s why legal advice is so important.

The Rise of Credit — and Collection Pressure

The economic stress is clear. According to the Eighty20 Credit Stress Report, in Q4 2024:

• Total loan balances reached R2.5 trillion, a year-on-year increase of R78 billion (3.2%)
• Credit card debt grew by nearly 6%
• Retail credit balances increased by 4%
• Overdue debt hit R200 billion, making up 8% of total debt, up R11.5 billion from the previous year

With more people relying on personal loans and store credit just to stay afloat, collection activity is also on the rise, including efforts to recover debt that may legally be prescribed.

Grey Areas and Unethical Practices

Prescribed debt collection has become a lucrative industry for certain attorneys and debt buyers. Many operate in legal grey areas, using scare tactics to trick consumers into paying expired debt.

In some cases, people receive SMSes that look like court summonses. It’s misleading, and often, illegal. Consumers need to know that they have a choice — and that fear shouldn’t guide financial decisions.

5 Ways to Protect Yourself

1. Understand the 3-year rule: If no payment, acknowledgment, or legal action has occurred in three years, most debts prescribe.
2. Be careful what you say: Avoid phrases like “I’ll pay soon” — this can reset the prescription period.
3. Get legal advice: Don’t ignore communications, but don’t assume you must pay either.
4. Check your credit report: Dispute prescribed debt listings with the credit bureau.
5. Request written proof: Never agree to pay without a written record of the debt’s validity.

Not all debt prescribes. Court orders, municipal debt, and home loans with bonds may be enforceable for 15 to 30 years. But for most unsecured credit — the kind being chased today — the three-year limit still applies.

Rather than avoiding the calls or blindly agreeing to pay, speak to a professional.”

* De Lange is a director and head of legal at Milaw Legal.

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