The common law in duplum rule holds that “interest stops running when the unpaid interest equals the outstanding capital.”

Confirmation that this ancient Roman doctrine was part of our law was eventually settled in the case of LTA Construction Bpk v Administrateur, Transvaal 1992 (1) SA 473 (A).

The NCA enacts the in duplum rule into legislation in Section 103(5) but the NCA takes the definition further than the common law definition of the in duplum rule, specifying that not only interest stops running when the unpaid interest equals the outstanding capital, that:

• initiation fees;
• Service fees;
• Credit insurance;
• Default administration charges; and
• collection costs
  should be included, together with the interest in an aggregate amount which should not exceed the principal debt.

This is another example of the NCA going to far when their was sufficient protection for debtors in the common law in duplum rule.

Particularly by including collection costs, which are the legal or debt collectors costs incurred in getting payment from the debtor. This means in a long drawn out and costly collection matter, which could be the result of the debtor frustrating the collections process, you will get less and less if and when the interest and legal costs be exceed the principal debt.