Staff Writer @ Lucid Living
As part of Consumer Rights Month, the National Credit Regulator (NCR) has urged consumers to be aware of their rights when it
comes to credit agreements.
“It is your money and therefore, it is your right as a consumer to have full knowledge of all credit agreements you enter into,”
says Education & Communications Manager at the NCR, Cornie Tema.
In South Africa, March is dubbed the Consumer Rights Month. The National Credit Regulator in conjunction with the Consumer Protection Forum (CPF) is embarking on programmes aimed at educating South African consumers about their rights and obligations. The international theme which has been adopted is “our money, our rights: campaigning for real choice in financial services”.
Consumers have rights; however, they also have obligations when entering into credit agreements. Obligations such as honouring the terms and conditions of credit agreements they enter into.
“Drawing up a budget to assess whether you will be able to afford the credit you intend taking, comparing deals between credit providers and understanding the terms and conditions of credit agreements are important steps before signing a credit agreement”, says Tema.
He says when taking out credit, consumers should always ask for a pre-agreement statement and quotation which clearly shows the borrowed amount, deposit payable if any is needed, interest charged, period of repayment, date of first installment, date of last installment etc.
“Additional charges such as initiation fees, monthly service fees and credit life insurance should also be stated in the pre-agreement statement and quotation, he adds”.
Under the National Credit Act, consumers have the right to receive information and documents in plain, simple language. “This means that the content, meaning and importance of the documents must be easy to understand.
Consumers also have the right to receive any documents required in terms of the NCA in an official language of the consumer’s choice to the extent that it is reasonable”, adds Tema.
“Do not sign unless you fully understand the content including the terms and conditions of the credit agreement”, adds Tema.
“While the National Credit Act provides that every person has the right to apply for credit from any credit provider, it does not prevent credit providers from turning down your application.” However, if your application is declined, you have the right to be provided with reasons on why it was declined. “The credit provider should provide you with reasons on why they are declining”.
Tema further explains that consumers have the right to access and challenge information held by a credit bureau. “Consumers are entitled to a free copy of their credit report from any of the eleven registered credit bureaux when they request for it.
“You also have the right to be informed if a credit provider intends to report negative information about you to a credit bureau before the credit provider actually does so. Therefore, it would be of benefit to all consumers to check their credit reports regularly to know what it entails. By checking your credit reports, you will be able to pick up if there’s any incorrect information on your credit report”, adds Tema.
He says one of the most important aspects of the National Credit Act is that it gives consumers the right to get assistance when they are over-indebted. “If you are experiencing difficulty in servicing your debts, act as soon as possible,” he says. “Don’t wait until you start receiving final demand letters. “Contact a registered debt counsellor in your area for assistance soonest.”