What is the purpose of the NCA?
The purpose of the NCA is to promote and advance the social and economic welfare of South Africans; promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry; and to protect consumers while balancing the rights of suppliers.
Who does the NCA apply to?
What is a credit agreement?
The NCA defines credit agreements which include credit cards, cheque accounts, loans by financial institutions, clothing accounts on credit, cell phone accounts on credit, and suretyship agreements.
What are the key features of the NCA?
The language in credit agreements must be plain and understandable.
Quotes must be given before credit agreements are entered into and which are binding for 5 days.
Advertising and marketing must contain information on the cost of credit.
Credit sales at a person's home or work are not allowed unless the consumer says otherwise.
Reasons must be provided if a credit application is declined.
Automatic increases in credit limits are allowed unless the consumer says otherwise.
Reckless lending is prohibited.
Interest and fees are charged as according to the NCA (including micro-loans).
Credit bureaus are regulated and consumers have the right to see their credit bureau record.
Debt counselling was introduced to enable restructuring of debts for over-indebted consumers.
What are my rights as a consumer?
How does the NCA protect a consumer against over-indebtedness?
The NCA requires that credit providers must perform a full credit assessment before entering into a credit agreement with the customer. Such an assessment includes taking reasonable steps to ensure that the customer understands the rights, obligations, risks and costs associated with the credit agreement; and it must assess the consumer's financial position.
How will a consumer know that he/she may be over-indebted?
A consumer may be over indebted if, after deducting reasonable living expenses from the total income, the consumer will not be able to repay his/her debts. LegalWise can assist by referring a consumer to the debt counselling department for an assessment (for further information on debt review, refer to the debt counselling QuickLaw
What is the National Credit Regulator (NCR)?
What are the functions of the NCR?
The NCR must:
Register credit providers, credit bureaus and debt counsellors; and monitor the conduct of these parties.
Educate and create awareness of the protection the NCA offers.
Research the credit market to monitor access to credit and the cost of credit.
Identify factors that may undermine access to credit, competitiveness and consumer protection.
Advise government on policy and legislation changes.
Receive and investigate complaints.
Ensure that a consumer's rights are protected.
Enforce the NCA and take action against contravening institutions.
What is the National Consumer Tribunal (NCT)?