Warning over unregulated credit providers
Consumers have been warned to ensure that they do not borrow money from one of the 4 000 credit providers whose registration with the National Credit Regulator has lapsed.
The Citizen reports that these providers are now operating illegally and often charge exorbitant interest, impose hidden and often illegal fees and use dubious collection practices.
As the economy continues to face challenges consumers increasingly turn to credit providers to afford to pay for basic necessities, but they are often unaware of the stark differences between legal, registered credit providers and the dangers posed by illegal lenders, Leonie van Pletzen, CEO of MicroFinance SA (MFSA), says.
The MFSA calls on consumers to prioritise using regulated credit providers and emphasises the need for sustainability in the lending sector through an urgent review of the rates and fees these credit providers charge.
Credit providers who are registered with the National Credit Regulator operate within a strict regulatory framework that ensures consumer protection, affordability and fairness.
‘They are bound by the National Credit Act and must comply with affordability regulations that safeguard borrowers from over-indebtedness and require transparency about interest rates, fees and repayment terms.’
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
