Bayport Blog

Your rights as a consumer

As a consumer, you have specific rights when it comes to credit, be it short-term or long-term loans. In South Africa, the National Credit Act (NCA) sets out the basic rights – and responsibilities – you have with regards to the credit market, all aimed at protecting you against reckless lending. Let us have a look at them.

Throughout the lending process, from how loans are marketed to debt relief options, the NCA gives consumers specific rights.

Application for credit The NCA says every person has the right to apply for credit. However, that doesn’t mean that you have the right to receive the short-term or long-term loan you have applied for.

Discrimination A credit provider can refuse to give you credit for reasonable business reasons, such as a poor credit record. However, it may not discriminate against you on the grounds of race, gender, religion, age, and so on. Everybody must be treated equally and their applications must be assessed in the same way.

Credit assessment Credit providers must take reasonable steps to prevent reckless lending and over-indebtedness by first making sure that you can afford the loan you’ve applied for. However, the Act only protects you if you have answered the questions on the application form honestly and fully.

Decline of credit You have the right to be given a reason, in writing, why your credit application was refused.

Language Credit agreements must be easy to understand, written in plain language. The credit provider must also explain the document to you and answer all your questions. If you do not understand the terms and conditions of the document, you should not sign it.

Documents The NCA states that you have to receive a pre-agreement statement and quotation (which is valid for five days so that you have time to make a decision), and what information can and cannot be written into the final agreement. It also states how often the credit provider must send you a statement.

Fees and charges The NCA states what fees credit providers may charge, and how much those fees can be.

Credit information Credit providers must report new credit agreements, or changes to existing agreements, to all credit bureaus in South Africa. You have the right to one free credit report a year, and you can query or challenge any information about you that is kept by credit bureaus. The credit bureau or National Consumer Regulator (NCR) must investigate your query at no charge to you, and correct any mistakes.

Confidentiality Credit bureaus and credit providers must protect the confidentiality of the information they have about you. Credit providers must give you the choice to not receive mass email and SMS messages, and for your information to not be shared with telemarketing companies. In fact, credit providers may only use your information for the purpose you gave it to them.

Marketing of credit Credit providers may not harass you, or be untruthful in their marketing. This means an agent may not come to your house or place of work unless you have invited them or they have an agreement with your employer.

Termination and settlement You have the right to settle your loan, and end the credit agreement, at any time.

Debt enforcement The NCA states how a credit provider can go about collecting outstanding debt from you. This include the letters they have to send you and how long you must be in default before they can take legal action against you.

Debt counselling When you cannot repay your debts, you have the right to ask for help from a debt counsellor. You will not be able to get more credit while the debt counselling process is taking place.

The credit provider’s rights Under the NCA, credit providers have the right to:

• Access your credit records – with your permission – when you apply for credit.
• Decline credit, but they must tell you why.
• Receive regular repayments from you, as agreed in the credit agreement.
• Take steps to collect the debt you owe, as per the credit agreement.
• Ask that a court orders you to pay any costs they have incurred in collecting debt from you.

The credit provider’s duties In terms of the NCA, credit providers have to:

• Do a credit assessment to avoid reckless lending.
• Take all reasonable steps to prevent you from becoming over-indebted.
• Supply you with a statement of account.
• Give you a pre-agreement statement and quotation.
• Give you a copy of the credit agreement.
• Tell you about all the costs involved in the agreement.
• Report regularly to all registered credit bureaus and the NCR.
• Advise you to seek help when you are in default.
• Keep records of all applications, agreements and accounts for a specific time.

Perhaps your biggest responsibility as a consumer, is to make sure you know what your rights are. So, before you apply for credit, whether it is a short-term or long-term loan, take the time to find out what these are. It is a great investment in your financial wellbeing.Your rights and responsibilities.