Independent Online

Saturday, May 21, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Public protector asked to investigate the City of Cape Town’s debt-collection practices

City’s spokesperson Luthando Tyhalibongo said deducting amounts from prepaid purchases for municipal debt was a method to ensure the customer continued to have supply. Picture: David Ritchie/African News Agency

City’s spokesperson Luthando Tyhalibongo said deducting amounts from prepaid purchases for municipal debt was a method to ensure the customer continued to have supply. Picture: David Ritchie/African News Agency

Published Dec 6, 2021

Share

Cape Town - The GOOD Party has approached the public protector to investigate the legality of the City’s use of prepaid electricity purchases as a debt collecting mechanism against customers in arrears with their payments.

It wants the office to investigate whether, in the absence of a judgment and a warrant of execution, the practice complied with the National Electricity Act and its tariff principles.

Story continues below Advertisement

Lobby group Stop CoCT previously raised concerns about the issue, describing the practice as “inhumane and anti-poor”.

GOOD Party general secretary Brett Herron said the City deducted between 30% and 90% off pre-paid electricity purchases without allowing consumers to dispute that they were in arrears.

He said there was no provision in the Electricity Regulation Act for the purchase of electricity to be used for debt-collecting purposes.

After submitting a PAIA (Promotion of Access to Information Act) application to the City and requesting access to its tariff application to Nersa for the 2021/22 financial year and Nersa’s approved tariffs, Herron said the City refused, citing “commercial” information that would “disadvantage” it.

Stop CoCT founder Sandra Dickson said the prepaid meter idea was originally brought forward and promoted to the public as a means to control electricity purchases and to avoid huge electricity bills.

Dickson said since the City had capitalised on prepaid meters, they were now being used as “glorified autoteller machines” in homes by which the City could collect money with no recourse for the home owner.

Story continues below Advertisement

“A once-friendly policy has now become extremely hostile. This is an example of how the City is gearing towards the exploitation of homeowners who have no defence. Stop CoCT strongly condemns this one-sided practice from the City, specifically in the light that up to 90% can be taken from prepaid electricity purchases and that there is minimal recourse for homeowners,” she said.

Dickson said the application to the public protector was welcomed and came at a critical time when homeowners started another five years of the same “only the City benefits” rule.

City spokesperson Luthando Tyhalibongo said deducting amounts from prepaid purchases for municipal debt was a method to ensure the customer continued to have a supply.

Story continues below Advertisement

“Legislation made provision that the electricity supply could be disconnected for non-payment, but the City did not make use of this provision,” he said.

Tyhalibongo said the practice was not illegal and customers were made aware of this debt management action via various warnings and notices.

He said clause (4) in section 11 of the City’s credit control and debt management policy allowed it to deduct debt via prepaid purchases.

Story continues below Advertisement

“Debt management actions are always the last resort. The City must remain sustainable or it will not be able to provide the level of services that is required. The income from payments made for municipal services is used to provide services,” he said.

[email protected]

Cape Argus

Share