Digital letter now allowed as demand for payment
Pretoria - Times have changed, and those who owe money can no longer hide behind the fact that they did not receive registered letters of demand in the mail.
In a groundbreaking order, the Gauteng High Court, Pretoria, has accepted the digitally registered delivery of a Section 129 final letter of demand for payment as the basis for granting a default judgment.
A Section 129 letter is issued in terms of the National Credit Act, and alerts a consumer that he or she is in arrears with payments. In the past, consumers received these notices through registered post and many ignored it, and claimed they never received the notice.
But now a digitally received letter will suffice.
Bradley Gilmour, director at Registered Communication, who was involved in the legal proceedings, explained that if a business or person is owed money by a consumer, the business or person can institute legal proceedings to recover that money.
Part of the process is sending the consumer a letter of demand, which has conventionally been sent to them through registered mail.
Consumers can ignore a registered letter, or choose not to sign for it at the post office. This is a lengthy procedure, even though the credit provider can proceed with legal action if the registered letter of demand has not been collected.
He said a letter of demand through registered email or registered SMS is more difficult for a consumer to ignore, as it is delivered through a convenient and accessible channel, directly to their mobile number or email address. It reaches them wherever they are, without the need to visit a post office.
“Consumers are more quickly equipped with the information that they need to make payment arrangements with the creditor, avoiding legal costs and adverse credit ratings,” he explained.
The court now ordered that a company could recover its debt from an owing consumer after the latter was alerted through a digital letter of demand.
Gilmour said there had been similar default judgements handed down in the Randburg Magistrate’s Court in 2018, which were the first in South Africa to afford registered digital channels, such as registered SMS and registered Email, the same status as conventional registered letters.
But this high court order further paved the way for this online route.
The court gave an attorney the green light to serve legal notices through electronic registered mail.
The company Registered Communication and one of its software partners, Swordfish Software, a debt collection software provider, hailed the victory which they have obtained.
Gilmour said using a track and trace concept that’s reminiscent of traditional registered mail, his company could deliver an instant electronic certificate and detailed audit report to clients as evidence that communication had been sent and delivered by SMS or emailed to recipients – with the same legal status as traditional registered post.
“In a recent campaign we ran with a client, less than 3% of their letters sent by conventional registered post had been delivered successfully by the end of the second month. This, while just short of 97% had been delivered, accepted and certified digitally, by the end of the first month,” Gilmour said.