DEBT COLLECTION LAWS AND RULES IN TANZANIA
In Tanzania, there are no specific laws or regulations that have been enacted to manage debt collectors. But since the debtor collectors stand as the agent of the principal, Part X of the Law of Contract Act, Cap. 345 regulate commercial relations between the agent (debt collector) and the principal (creditor).
Who is a Debt Collector / Agent
The Law of Contract Act describes the agent as a person employed to do any act for another or to represent another in dealings with third persons and the person for whom such act is done, or who is so represented, is called the "principal".
In response to this interpretation of the law, agent
A person whether natural or legal
Employed by the principal to do act or to represent him/her
Deal with another person’s whether natural or legal
Power of Attorney
The commercial relationships between an Agent and Principal to deal with another person are done using documents called Power of Attorney (PoA). In PoA basically, the principal must declare and identify the agent that he recognizes him and that he appoints him as his representative to carry out the necessary action.
The PoA must be signed by the principal and sometimes the agent will be required to sign to show that he agrees with the responsibilities given to him by the principal. However, the PoA is an external document that must be shown to the debtor. So, since it is not wise and healthy to debtor to know secrets information such payment between the agent and the principal, the principal and the agent are advised to sign another contract that shows the manner of their payment and other basic things.
Extent of agent's authority
An agent having an authority to collect debt has authority to do every lawful thing which is necessary in order to recover the debt.
An agent having authority to carry on a business has authority to do every lawful thing necessary for the purpose, or usually done in the course of conducting such business.
Agent's duty to communicate with principal
It is the duty of an agent, in cases of difficulty, to use all reasonable diligence in communicating with his principal, and in seeking to obtain his instructions.
Enforcement and consequences of agent's contracts
Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner, and will have the same legal consequences as if the contracts had been entered into and the acts done by the principal in person.
