Consumer Protection

• National Credit Act (NCA)

  Establishes rights for consumers, including measures that enable them to make informed decisions. Places greater responsibility on credit providers to refuse credit to those who cannot afford it and regulates how credit bureaus do business.
• National Credit Regulator (NCR)


  • Registers all credit providers, credit bureaus & debt counsellors to ensure they comply with the NCA
  • Educates consumers - makes info available
  • Reports to Parliament on credit related issues to help with policy development
  • Investigates complaints & audits credit providers
  • Promotes accessible credit market, particularly to disadvantaged, low income people or those living in remote areas

  
• National Consumer Tribunal

  • An informal court that deals with all credit problems
  • Consumer - if credit provider doesn't comply with the law, address their complaints
  • Credit provider, credit bureau & debt counsellors - any breach of the NCA can be taken to this court
• Consumer Credit Agreement

  Where the credit provider supplies good/services/lends money to consumer, consumer pays for goods in instalments or as a single payment on a clearly defined date, and consumer pays interest/charges on outstanding balance
• Agreements not covered by the NCA

  • When the 2 parties are related
  • Stokvel member borrows money from stokvel
  • Company director lends money to company
  • A government institution lends/borrows money from any source eg. Bank borrows from Reserve Bank
• Consumer rights relating to credit agreements

  • Right to apply for credit
  • Right not to be discriminated when applying for credit
  • Right to reasons why credit is declined
  • Right to documents in your own language
  • Right to documents in plain language
  • Right to be given documents in your method of choice
  • Right to confidential treatment
  • Right to access & challenge info held by credit bureau
  • Right to receive statements
• Unlawful credit agreements


  • Where the consumer is an unaccompanied minor
  • Where the consumer has been declared mentally unfit
  • Where the agreement is a result of negative option marketing
  • Where the credit provider is not registered with the NCR
• Prohibited clauses in credit agreements

  • Purposefully misleading consumers, making them waive their rights or making them leave ID, bank cards or PIN codes with credit provider
  • Changes to original credit agreement that are not signed by the consumer
  • Credit increase that occurs without consumer's consent in writing. Automatic credit limit increases can only happen once a year
• Interest


  Charged on outstanding balance of credit agreement. Interest rate must be specified according to NCA specifications
• Service Fees

  Max R50 per month. This is the amount charged to manage the credit agreement.
• Credit Insurance

  Required for home loan/credit card. Insurance covers the debt if the consumer dies. NCA says that consumers must have option to take out their own insurance & not be forced to take what is offered by credit provider.
• Other costs regulated by NCA

  • Default administration costs
  • Collection costs
• Debt Counselling

  1. Debt counsellors mediate between consumer and credit providers to reach a repayment agreement

  2. Consumers can approach debt counsellors voluntarily, be referred by credit providers if payments are behind, or a consumer may be referred by the court

  3. Over indebted = when income over an extended period is not enough to meet living expenses and pay debt