Areas of Law and Guides
National Credit Act Law
In essence, the National Credit Act is designed to promote a fair and non-discriminatory marketplace in South Africa. As such, credit providers are supposed to do everything in their power to ensure that the manner in which they grant credit always upholds the intentions and requirements of the legislation, while still meeting the varied lending requirements of all its clients in a responsible manner.
This area of law aims to provide protection for laypersons unfamiliar with their legal rights and in an unequal bargaining position to that of big business.
What benefit will you or your business gain from the National Credit Act in South Africa?
Most recent Articles posted
Capitec, which grew into SA’s biggest bank by customer numbers by focusing on those traditionally excluded by commercial lenders, says it has been actively reducing its exposure to low-income earners in anticipation of the recently-approved debt relief legislation.
Local banks are concerned that some of their customers will get away with not having to repay their debt under the National Credit Amendment Act, signed into law by President Cyril Ramaphosa last week.
President Cyril Ramaphosa has signed into law the controversial National Credit Amendment Bill which is geared to provide relief to over-indebted consumers, according to a Fin24 report.
A full Bench of the Gauteng High Court (Pretoria) has reserved judgment in a case that will determine how they deal with applications from consumers who want to get out of debt review before they have been able to pay off all their debts.
Is your bank entitled to clean out your current account’s credit balance – with neither notice to you nor your permission – to settle a separate debt you owe it?
The National Credit Regulator (NCR) has withdrawn its referral of Foschini Retail Group – a subsidiary of listed clothing retailer TFG – to the National Consumer Tribunal for an alleged breach of the National Credit Act.
Borrowers with more than one debt outstanding were given some protection last week when the SCA ruled that the interest rate on short-term loans after the first loan cannot exceed 3% a month. GroundUp reports Micro Finance SA (MFSA) had challenged regulations promulgated under the National Credit Act reducing the interest rate on a second short-term loan taken out in a 12-month period from 5% to 3% a month.
It seems logical that the very strong consumer protections in the NCA (National Credit Act) are designed for commercial situations in which credit is advanced by “credit provider” businesses to “credit consumers”. But does the NCA also apply to non-commercial, once-off loans? Like a loan to a friend or relative? And what about property sales?
Edgars’ right to collect more than R450m in club fees from those who buy on credit is under attack again as the National Credit Regulator (NCR) has applied – and been granted – leave to appeal against a Gauteng High Court (Pretoria) decision that Edcon’s club fees are lawful.
The Credit Ombud, Nicky Lala-Mohan, says it seems there is still widespread abuse of the garnishee order system to deduct debt repayments from employees, despite a far-reaching Constitutional Court ruling tightening up the issuing of these orders. In September 2016, the Constitutional Court confirmed a High Court ruling by Judge Siraj Desai that aspects of the enforcement of emolument attachment (EAO) were unconstitutional, notes a report on the IoL site.
The National Credit Regulator has advised a financially-vulnerable consumer to seek the services of a debt counsellor to ‘assist her with possible over-indebtedness’ but has not found Nedbank guilty of reckless lending practices as contended, notes a Moneyweb report.
The National Credit Regulator is considering appealing a recent Western Cape High Court judgment that on the face of it makes qualification for credit that much easier, notes Legalbrief. In the case brought by leading retailers Truworths, Foschini and Mr Price, the High Court ruled credit applicants would no longer be required to provide proof of income when applying for credit, as previously required by the National Credit Act.
The Treasury estimates the total debt that could fall under debt extinguishing provisions of the National Credit Amendment Bill proposed by Parliament’s Trade and Industry Committee could range from R13.2bn to R20.7bn, notes a Business Day report.
Debt counselling, implemented as an alternative to sequestration for indebted consumers, is a ‘disaster’ for many consumers, according to practitioners. Rapport notes that the issue of customers wanting to abandon the debt review process has become more complicated with the Western Cape and Gauteng High Courts at odds on the matter.
Capitec Bank is the latest target of Viceroy Research – the team that produced an explosive report detailing how Steinhoff cooked its books to hide losses and inflate earnings, says a BusinessLIVE report. Viceroy describes Capitec as a ‘loan shark with massively understated defaults masquerading as a community finance provider’ in a report it released yesterday.
There are so many companies and individuals out there trying to escape their responsibilities of payment of monies due to others. It is distasteful at the least, but people often loan goods or services or even monies to somebody. They promised to pay you back for services, goods or monies lent.
The National Credit Regulator (NCR) has stepped in to investigate a case of alleged reckless lending against Nedbank after reading about it in the press. Moneyweb previously reported that retired education specialist, Myrlene Pieterse, approached the Ombudsman for Banking Services on behalf of a financially uneducated employee, contending that Nedbank engaged in reckless lending practices by not adequately explaining the implications of the credit.
Johannesburg attorney Gilad Cohen believes the Constitutional Court’s decision to dismiss an application to access the court by defaulting debtors who cannot meet their home loan payments does not help to alleviate unscrupulous behaviour by resellers, according to a Business Day report.
Despite the Constitutional Court’s landmark ruling on the illegality of certain practices in the administration of garnishee orders – made more than a year ago – activists claim that fee-gouging and fraudulent court orders are continuing unabated, according to Business Day. Lisinda Bailey, one of the applicants in the Western Cape High Court case on garnishee orders that was confirmed by the Constitutional Court, says her life was ruined by the irresponsible granting of credit and subsequent garnishees.
The National Credit Regulator (NCR) has directed BMW to refund its customers for charging them an on-the-road fee on credit agreements, says a TimesLIVE report. The regulator said it was not aware what the fee was for as BMW did not explain when it inquired. The charges ranged from R3 000 to R6 000.