Thursday, 18 October 2012

My debt is more than double?

In Namibia, the Consumer Law can do a lot to prevent the endless circle of debt and poverty consumers get trapped in. Take for example the principle of in duplum.

“In duplum” is a Latin phrase derived from the word in duplo which means "in double". The rule has its origin in the Roman Dutch law. It basically provides that interest stops running when unpaid interest equals the outstanding capital amount.

It has always been considered illegal (and immoral) to charge interest which is more than the original amount owed, except in special circumstances but people such as banks, lawyers, debt collectors, etc get away with it because it is a common law rule. This means there is uncertainty when applying the rule, especially by the courts.

Thus a creditor should not charge more than twice the original amount due - but lawyers charges, tracing fees, administrative costs, etc. can inflate the debt to almost any amount?

This common law "in duplum" rule has been codified by statute in South Africa, which now protects consumers against predatory interest rates on loans and further provides better clarity about when the rule applies and when not.

Namibia needs legal protection for its consumers – the Consumer law is a necessity not a nicety!

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