July is national savings month in South Africa and consumers are once again made aware of ways and means to implement and make healthy financial decisions, which will ultimately assist the country in creating a sustainable savings culture.
One of the first things that enable consumers to make healthy financial decisions, is knowing what their rights are, specifically insofar as credit agreements in terms of the National Credit Act 34 of 2005 (“NCA”) are concerned. Mieke Whitehead of Moonstone Compliance shares some noteworthy rights for both consumer and credit provider. “These rights are specifically granted to consumers under the NCA and therefore consumers should ensure that they are aware of these rights so that they can level the playing field when entering into credit agreements with credit providers”, Whitehead advises.
The right to information in plain and understandable language
Every consumer has the right to information in plain and understandable language, which entails that he or she must be able to understand the context, significance, and importance of the document without undue effort. Consumers must be cautious of signing any documentation which they do not understand and must insist that the credit provider explains anything that they might find unclear or even ambiguous.
Protection of consumer rights
When a consumer exercises, asserts or seeks to uphold any of its rights in terms of the NCA, a credit provider may not discriminate directly or indirectly against the consumer for doing so, as compared to the treatment of another consumer who has not exercised its rights. The credit provider may also not penalise the consumer, alter the terms and conditions to the consumer’s detriment; or take any action to accelerate, enforce, suspend or terminate a credit agreement with the consumer, if it elects to exercise its rights.
The right to access and challenge credit records and information
A consumer has the right to be advised by the credit provider before any adverse information pertaining to the consumer is reported to a credit bureau and to receive a copy of such information upon request. A consumer may furthermore challenge the accuracy of any information concerning him or her that is submitted to, or held by a credit bureau.
The right to apply for debt review
Where a consumer exercised his or her right to apply for debt review, the credit provider must endeavour to assist the debt counsellor in any way.
The right to terminate or settle an agreement or make early payment
The consumer has the right to terminate a credit agreement at any time by paying the credit provider the settlement amount or by way of early payment, without the credit provider penalising the consumer.
The right to the surrender of goods
This right is only applicable to lease agreements, instalment sale agreements and secured loans. The consumer may give the credit provider written notice that he or she wishes to terminate the credit agreement and return the financed goods to the credit provider if they are not already in possession thereof.
Consumers should also be aware of the following rights, which are provided to them in terms of the NCA:
- the right to apply for credit;
- the right to protection against discrimination in respect of credit;
- the right to be given reasons for refusal of credit;
- the right to information in an official language;
- the right to rescind an agreement;
- the right to receive documents and
- the right to confidential treatment
In light of the above, it is clear that consumers should be aware of the various rights they have at their disposal, in order to ensure that they are making sound decisions insofar as their finances are concerned.
An informed consumer is a smart consumer…always.
Moonstone Compliance offers various compliance-related services to registered credit providers, including assistance with the implementation of internal controls and credit agreement reviews, to ensure that you comply with the requirements of the Act. Should you require further assistance in this regard, please contact Mieke Whitehead, our Junior NCA Compliance Officer on email@example.com or 021 883 6178.