7) National Credit Act (NCA)

• Purpose

  • Promote fair competitive credit market.
  • Promotes social and financial interest of consumers.
  • Register credit bureau and debt counselling services.
• Impact

  Positivists

  • Bad debts resulting in better cash flow
  • Protects businesses against non-paying consumers
  • Authorised credit providers attract more customers
• Impact

  Negatives

  • Businesses no longer do credit marketing
  • Debt collection procedures more complex and expensive
  • Increases administration burden on credit providers
• Discriminatory actions

  • Refusing credit to customers based on gender/ race
  • Blacklisting customers without making efforts to recover debt.
• Penalties for non-compliance

  • Business may not demand payment, sue or attach clients/ consumers salaries/ assets.
  • Business may not charge any fee/ interest/ other charges under that specific credit agreement.
  • The National Credit Regulator may impose fine/ penalty on business for non-compliance
• Ways to comply

  • Disclose costs of loan/ no hidden costs should be charged/ added
  • Credit providers must be registered with National Credit Regulator.
  • Businesses submit an annual compliance report to National Credit Regulator
• Consumer rights in terms of NCA

  • Receive documents as required by the Act
  • Fair and responsible marketing
  • Obtain reasons for credit being refused