January 6, 2004
By Jonews Reporter
JOBURG residents who default on payment for services can expect to be left in the dark: the council's new credit control strategy, which aims to streamline the process of the termination of services and legal action in respect of defaulters, has kicked in with great success.
The process has now become automated, with non-paying consumers being automatically shifted into various pre-cut-off queues. Furthermore, services are now being cut after 45 days of non-payment instead of the original 90 days.
According to Adel Kay, Credit Control Legal Adviser for the City, the past system "had lots of gaps which needed to be addressed. There were no clear guidelines or policies on when people could expect to be cut off. Areas were targeted in an ad hoc, inconsistent way. In certain areas there was no credit control at all."
A more stringent and organised process had to be implemented says Kay, who adds: The bulk of the City's income is derived from the payment of water, electricity, sewer, refuse and rates and taxes. Consumers must be responsible and pay for services consistently on the due date and in full.
"It is not in our interest to cause hardship to any families but the collection of revenue is a vital function of any municipality and strict credit control is essential as articulated in the Municipal Systems Act."
Now, the consumer's obligation is communicated to the public and the policy has been streamlined.
"Consumers are expected to pay accounts in full on the due date or expect some form of credit control action against them."
Immediately after the due date, warning notices are issued to defaulters. Unless consumers either formally lodge a query or pay their accounts within the prescribed 14-day notice period, water and electricity services are cut. If there is still no payment from the defaulter, water and electricity cables will be removed - a step referred to as "level three".
This step is taken, explains Kay, to stop the public from using disingenuous methods of drawing water and electricity illegally. The cables or metres are only replaced once debts have been settled - and at the cost of the defaulter.
After 60 days unpaid accounts are then channelled to the council's legal department. Once again the consumers are given the opportunity to make arrangements to pay off their debts or to finalise their queries.
"After 90 days the unpaid account must have gone through the entire credit control process and the matter will then be handed over to the attorneys for litigation, which could include the following actions taken: "blacklisting", judgment, attachment and execution sale of property, sequestration or liquidation."
Although the new credit control policy must still be promulgated into a by-law, it has been approved and adopted by Council. Implementation began 6 months ago. Kay says the response from the public has been overwhelming.
The revised policy allows the revenue department latitude to negotiate interest on arrears for prompt settlement or where mitigating circumstances exist.
Once a fixed re-payment programme is formalised, future interest on arrears is suspended helping the debtor to trade out of his or her arrear situation - and at the same time to enjoy continued services.
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