Debt-collection attorneys grossly overcharging miners

It says attorney statements related to the issuing of garnishee orders against miners have revealed instances where lawyers have charged more than double the initial loan amount in legal fees. Some workers have been charged fees in excess of 10 times the original loan amount. Combined with interest and other charges this has led to instances where workers have been invoiced for amounts three to 15 times the initial loan amount to clear their debt. While not always strictly illegal, the situation raises serious moral concerns relating to the debt collections practice in SA, according to Kem Westdyk from Summit Garnishee Solutions, which audits garnishee orders on behalf of companies such as Lonmin. Moneyweb says it is in possession of statements issued by five separate legal firms operating in the Rustenburg area in which apparently excessive charges were imposed. In one of the most striking examples of excess, law firm Steyn Attorneys charged a miner R9 934 in legal fees, excluding VAT, in addition to a collection commission of R1 140 for the recovery of a R1 000 loan. The unfortunate defaulter has paid R11 690 on his R1 000 loan but still sits with an outstanding balance of R3 084, notes the report. Moneyweb says it is also in possession of statements issued by Steyn where legal fees of R34 16 and a commission of R660 have been charged against the collection of a loan with a capital amount of R2 000. Full Moneyweb report