Understanding the National Credit Act
Though you may feel stressed and isolated by your debt problems, you are not alone. It is easy to fall on financial hard times due to circumstances that are completely out of your control, such as loss of employment, death of a relative or high medical expenses. If you are experiencing a time of financial crisis, your distress may be exacerbated by aggressive debt collectors demanding money. If this is the case, it is important that you understand the National Credit Act.
The National Credit Act was passed in June 2007. Its purpose is, among other things, to protect consumer, like you, from aggressive creditors trying to lend you money or demand money from you. Even though you are in debt you still have consumer rights and debtors are not entitled to harass you.
The South African National Credit Act (NCA) covers a number of specific areas to protect consumers. These are:
Credit Transactions – The NCA is responsible for regulating and controlling all credit transactions. This includes credit cards, mortgages, contract loans, micro-loans and hire purchase.
Credit Institutions – The NCA regulates all institutions that are responsible for providing consumer credit. This includes banks, retail outlets such as furniture or clothing stores who may provide hire purchase agreements, pawnbrokers and micro-lenders.
Credit Information – The NCA is also responsible for regulating credit bureaus and any information relating to individual consumer credit. This information must be provided at the request of consumers. Consumers are entitled to one, free credit report per year. The NCA also provides a free process, by means of which any errors in consumer credit records may be corrected.
Debt Counseling – The act also ensure that there is provision of debt counselors for consumers who need advice and solutions to help them restructure their debt, with a view to reducing it and restoring their credit rating.
The NCA provides you with the following consumer rights:
- The right to apply for credit without being discriminated against
- The right to an explanation if your application for credit is declined
- The right to receive documentation regarding any credit agreement, by hand, fax, email or internet, in a language you can understand
- The right to confidentiality of all your personal information
- The right to notification of credit bureau information and the right to challenge this information
- The right to receive credit statements every two or three months
The act allowed for the creation of the National Credit Regulator (NCR). The purpose of the NCR is to oversee the research, education and development of adequate policy within credit institutions. The NCR is also responsible for making sure that the act is enforced and investigating complaints.
The NCR can also help you search for debt counseling, within your location, that is suitable for your individual needs. They have qualified personnel available to inform you of your rights as a consumer and to give you tips on avoiding debt problems.
If you wish to lodge a complaint against an aggressive debt collector, you can contact the Council for Debt Collectors. You must provide them with a written letter which clearly states the time, date and particular details of the incident relating to the complaint. You should also include the name of the debt collector and the names and addresses of any witnesses. This should be submitted to the counsel as soon after the incident as possible. To aid your registration, the Counsel for Debt Collectors has a printable, online complaint form. Once you have filled this in, you can return it by mail or fax, or scan it and return it by email.