Consumer Credit Counseling and your Rights
Consumer credit counseling in accordance with the National credit Act of June 2007 was specifically designed to protect the rights of consumers in South Africa. This means that credit providers must adhere to the Act and cannot take undue advantage of debtors. Every credit agreement supplied by a credit institution must be clear and transparent and written in language that is simple and easy to understand. Small print and hidden clauses must be removed from the contracts. Any additional fees or charges must be highlighted so that the person entering into the agreement is aware of them. Interest charges as well as the repayment period must be calculated on behalf of the consumer and clearly defined.
A credit provider may also not charge more interest over any period of time than the original amount of the loan or the purchase price of an item on credit. Retail credit limits may not be raised without the signature of the debtor. Should the consumer miss an instalment, they must be informed that they have neglected to pay in writing and given a period of time to correct the situation. Continual non-payment must be dealt with through the legal system. The credit provider has a period of 5 years to recover bad debt from a consumer where after the debt becomes prescribed. Any infringement of these or other consumer rights by a creditor is considered to be reckless behaviour by the National Credit Act and the issues can be addressed through consumer credit counseling.
A debt counsellor can assess your debt and ensure that you have not been taken advantage of in any way. When a creditor has been found to be reckless, the matter will be forwarded to the National Credit Tribunal who will enforce fines or other legal measures against such a creditor. This does not mean that your debt will be cleared, only that any extraneous amounts will be removed from the amount that you owe.
To find out more about your rights as a consumer and how consumer credit counseling can help you, please contact us.