Why should customers pay the deposit?
Deposits are raised on accounts as security in payment of any charges, which are due or become due. It is a bylaw that deposits should be paid and residents must comply with the law. Section 33.4 of the CoJ Credit Control and Debt Collection Policy provides that where a deposit has not been paid to the city by the account holder for whatever reason, water and electricity may be disconnected until such time as an account holder agreement has been signed and the applicable deposit has been paid. Section 391(d) CoJ Credit Control and Debt Collection Bylaws of 2005 provides that no municipal service may be provided to any applicant, unless and until an amount equal to the amount prescribed has been deposited as security or other security, as prescribed, has been furnished.
What is the announcement made by the CoJ with regards to a security deposit?
On August 28, the CoJ announced it would provide favourable settlement arrangements to customers with accounts not reflecting the required deposit for electricity and water services. The city has taken a decision to raise the deposit on customer’s accounts in-line with its bylaws, calculated as a rate of deemed average consumption, for a period of two months, or area average or supply size per convectional metered service, in respect of the properties in question. The city offers a grace period to these customers to pay or settle the outstanding deposit reflecting on their accounts, in six monthly instalments, effective from September 1 this year. These outstanding deposits will be billed on customer accounts but will become fully due in February 2015.
Who will qualify for these settlements or instalment plan?
Criteria to qualify for the settlement arrangement or instalment plan are:
r Customers whose accounts reflect an outstanding deposit retrospectively from July 1, 2014.
r All category of customers who have not paid a deposit in full by the end of June 2014.
Which customers will not be eligible for an instalment plan?
The six months settlement plan is not applicable to new service agreement requests and every new application effectively from July 1, 2014 for municipal service has to be accompanied by a full deposit.
Credit control on customer’s accounts?
The city has taken a decision to suspend any disconnection related to nonpayment of the deposit raised until the end of February 2015. However this offer does not extend to nonpayment of customers’ monthly accounts, since normal credit control actions will still be taken for any outstanding debt, excluding the deposit raised during this period.
How was this discovered?
The city has for some months now been busy with a data clean-up process, which was introduced as a corrective measure to improve the city’s systems, and this data cleanup then revealed discrepancies in deposits, and further investigations then led to the city’s discovery of the residents where deposits were not paid. The initiative is part of the city’s plan to tighten credit management and bridge loopholes in our systems.
Did the city communicate this to customers?
The city issued communication prior to sending out statements with the deposit amounts, as well as a press statement. Thereafter, the city included the deposit amounts in the statements that followed. The city will continue to communicate directly to all customers whose accounts reflect an outstanding deposit, and advises customers to not ignore the official notice. Failure to exercise the instalment plan option will result in the city being obliged to enforce bylaws and subject these customers to normal credit control process.
When did the City decide to start doing collections?
The city piloted this project with a sample of 7 000 residents from February 2014 in various regions and customers were duly informed but others chose to ignore the request. Therefore, the city is obliged to enforce these bylaws.
What is the total number of customers who have not paid the deposits?
80 000. The city has communicated with the sample from the pilot roll out which is 7 000. Collections will start effectively on March 1.
From March 1, this deposit payment plan concession will lapse and any outstanding debt, including the balance on the deposit, will attract full credit control actions.
