Councils warned against engaging debt collectors

GOVERNMENT has warned local authorities against engaging debt collectors saying it is illegal to do. Local Government, Public Works and National Housing Minister July Moyo said investigations were underway to identify councils that were engaging debt collectors.

In a Ministerial statement delivered in the National Assembly last week, Minister Moyo said there has been an outcry from residents regarding the engagement of debt collectors by local authorities hence the need to clarify Government's position.

"As Minister of Local Government, Public Works and National Housing, I have to set the record straight on Government's position on the engagement of debt collectors by local authorities that fall under my purview. As Government, we are relying on Section 9 (2) of the Legal Practitioners Act," said the Minister.

Minister Moyo said the said Act reads: "Subject to any other law, no person other than a registered legal practitioner who is in possession of a valid practising certificate issued to him shall; 'issue out any summons or process or commence, carry on or defend any action, suit or other proceedings in any court of civil or criminal jurisdiction in the name of any other persons; or for or in expectation of any fee, commission, gain or reward in any way or assist any other person to sue out or threaten to sue or process or to commence or to carry on or defend any action, suit or other proceedings in any court of civil or criminal jurisdiction or appear, plead or act in the capacity of a legal practitioner for or on behalf of any other person in any action, suit or other proceedings in any court of civil or criminal jurisdiction."

The Minister said there is no legal provision supporting the engagement of debt collectors in the Urban Councils Act or the Rural District Councils Act. He said he has not been advised of any legal framework in Zimbabwe which regulates or authorises the operations of the so called 'debt collectors.'

"In the absence of such a legal instrument, no authority can be established to monitor their operations and conduct. This is why we have received numerous allegations of ruthlessness and unethical behaviour in their conduct of business," said Minister Moyo.

He said his Ministry communicated Government's position that councils need to use legal means in collecting debts by engaging lawyers who are authorised to represent clients or using their own internal lawyers.

"A circular has been in place, being 'Local Government Circular No. 3 of 2010,' which directed all local authorities to desist with immediate effect from contracting debt collectors to recover unpaid levies. Local authorities need to account for why they are contravening Government directive and yet they are not supported by any statute. Someone needs to be answerable.

"We have investigations going on and we have communicated to our local authorities to desist from engaging debt collectors," he said.

Minister Moyo said he was aware that Harare City Council had since terminated its contract with debt collectors while Chitungwiza Municipality was in the process of abiding by the Ministry's directive.

"We continue to receive reports from all other local authorities. What remains for us is to investigate and see how the monies that were being collected were used," he said.

Minister Moyo urged ratepayers to honour their financial obligations in respect of services provided by councils.

"If they fail to get our support, they face a demise, not only in their quest to deliver quality and continuous services but even in their establishments.

"We are duty bound to ensure the survival of these entities we created for our own convenience. To this end, we need to give them support," he said.

"Where there are serious disagreements between rate-payers and local authorities, we as Government are there to foster constructive dialogue which will usher in a win-win solution. So, no debt collectors, but for those who were engaged, we are now investigating how the monies were used by those who were collecting it".