Overbilled

Interest on a disputed Joburg bill, and how to get it reversed

The City's policy charges interest on overdue amounts and makes no exception for a disputed one. This guide shows how that interest works, how payments are applied, and how to ask for it to be reversed.

General information, not legal advice.

When interest is charged

Clause 15.1 of the City's Credit Control and Debt Collection Policy says: "Simple interest will be charged on all overdue accounts from due date at the current prime rate which the City's banker charges its clients from time to time." Clause 15.4 adds that interest "will be raised for each month for which such payment remains outstanding, and part of the month shall be deemed to be a month."

Simple interest normally means interest on the amount overdue, not on interest already charged. Clause 15 makes no exception for an amount under query or dispute, and clause 16, on queries and disputes, doesn't mention interest. So an amount you hold back while you dispute it can attract interest, even if you turn out to be right. Clause 16.10 lets the City Manager suspend debt collection while a query is investigated, but that is a power, not a right, and it doesn't mention interest.

It doesn't work the other way. Clause 15.2 says the City "will not pay out interest accrued on any credit balances reflected on an account, including on deposits." If you overpaid, the account should be adjusted (clause 16.4), but you earn no interest on the credit. Ask in writing whether the credit will be refunded or left on the account.

Worked example

Say R3,000 of a bill is disputed and stays unpaid for 3 months and 10 days. We use a prime rate of 10.5% a year as an example figure, not today's rate; banks publish their current prime rate.

On a plain reading of clauses 15.1 and 15.4: R3,000 × 10.5% ÷ 12 = R26.25 a month. Part of a month counts as a month, so 3 months and 10 days counts as 4 months: R105.00.

The policy doesn't spell out the calculation, and the City may work it differently, so check the interest lines on your bill. The amount is small next to a wrong bill of R3,000, but it is still money you shouldn't pay if the bill was wrong. A large catch-up bill left unpaid for months adds up faster.

How your payments are applied

Clause 10.10 sets the order in which a payment is allocated: "Oldest outstanding debt, settled first irrespective of the date of payment", followed by administrative cost, sundries, interest, and "Lastly current outstanding debt." Clause 7.2 adds that a payment of less than the full amount "may be allocated to the consolidated debt in an order determined by the City."

So if you hold back an older disputed amount, the City may apply your next payment to that older amount first. Part of your current bill can then show as unpaid, and attract interest too.

Section 102(2) of the Municipal Systems Act limits the City's power to consolidate accounts, credit a payment against any of them, and take credit control action, where there is a dispute about a specific amount. It needs a real dispute about a stated amount, and it is not a licence to stop paying. We have found no source on how it fits with clause 10.10. How to dispute a Joburg bill explains section 102.

What you pay while the dispute is open matters most here. Clause 16.3 says a query or dispute "must be accompanied by payment of, at least, the total amount outstanding on the account", then that where a portion is disputed, payment "shall be based on average monthly previous charges before the query/dispute arises". The two sentences don't fit together, so ask the City in writing what amount it expects. If you pay less than the total outstanding, the City may charge interest on the difference.

Ask the City in writing, too, how it allocated each payment you made after the dispute started.

Getting the interest reversed

Clause 19.1 says a customer "may apply to the City, by providing the requested information for interest or part thereof on an account to be reversed." The policy gives no right to a reversal. There are two routes.

When the bill was wrong. Clause 19.2.3 says interest on arrears may be reversed "When initiated by authorized officials in instances where errors with billing have occurred and outstanding arrears should not have accrued interest in the first instance (for example, unallocated payments)." It has to be initiated by an official, and it doesn't expressly mention interest on a disputed amount. Clause 16.4 says that if a query is found to be correct, "the City will adjust the account accordingly", but doesn't say whether that includes the interest. So:

  1. In your written dispute, ask the City to initiate a reversal under clause 19.2.3 of any interest charged on the disputed amount, if the dispute succeeds.
  2. When the City adjusts the account, check the next bill for the interest lines as well as the charge itself.
  3. If a payment you made doesn't appear on the account, send the proof of payment and ask for it to be allocated, and for the interest it caused to be reversed. Unallocated payments are the policy's own example.

The Interest Adjustment Committee. The City's Interest Charges Query page says this committee considers writing off interest "in certain circumstances", for example when you want to settle in full but can't pay the interest. Its conditions:

This route suits interest on an amount you owe. For interest on an amount the City billed in error, the first route fits better.

Sources

Want us to check your bill? Overbilled checks your last 3–12 months against the City's published 2026/27 tariffs and its Credit Control Policy, and lists anything it couldn't check. Check my bill