The flip side of this coin, is that creditors and lenders will tighten their lending policies – making access to credit more difficult, according to Adv Kate Thambiran, MD of LUCID Clear Credit.
The National Credit Regulator had referred Lewis and Monarch Insurance Company to the National Consumer Tribunal following an investigation into loss-of-employment cover sold to people who would not be able to claim the benefits.
EAOs, which are imposed on a debtor’s salary by a creditor to recover outstanding money, have been widely abused by unscrupulous unsecured lenders and debt collectors.
The NCR says that if a court is presented with evidence that the credit provider failed to take these reasonable steps, the credit provider may be found to have granted credit recklessly. The court may set aside the credit agreement.
A pay-day loan is a small unsecured loan, which attracts the highest interest rate allowed by the NCA – five percent a month.
And because of the year-end hype and excitement, the festive season provides the perfect opportunity to spend money that you do not have.
The NCR said it ordered Wonga to submit an audit report and remove adverse credit bureau listings from some of its customers’ records at its own expense.
1,370 cases of ID Theft had been reported by the end of April. The category of crime surged from 3,327 cases in 2012 to 3,873 last year, and the figure is expected to continue to soar this year.
Standard Bank believes it could take at least another two to three years to get rid of SA’s overhang of distressed properties, given the worrying state of consumers’ financial positions.
“As anticipated, banks have adjusted their credit underwriting to account for the effect of the credit amnesty” said Advocate Kate Thambiran, Managing Director of LUCID Clear Credit, a credit rehabilitation firm.