Smart money management is an important component of developing a sound financial life and future, especially in volatile economic times such as these. Now is a great time to focus on spending smart. For example: A credit card with a balance of R20,000 with monthly fees of R50 and an interest rate of 22% (R4,400 […]
28 November 2012
By PRINCE MOENG
Cape Town – The national credit regulator yesterday kick-started a campaign to educate consumers about their rights under agreements with credit providers and to help them borrow more prudently.
The awareness campaign would continue for the rest of the month, said the watchdog, which was established under the National Credit Act to regulate the credit industry.
Peter Setou, the education and communications manager at the national credit regulator, said the body would host workshops and seminars for non-governmental and community-based organisations, trade unions and businesses in all the provinces.
Setou said thousands of South Africans borrowed money or applied for credit, but few were aware of their rights. This made consumers vulnerable to unfair lending practices and might result in them becoming caught in a debt trap.
“The majority of South Africans are increasingly dependent on loans and other credit for various functions.”
Setou said the regulator had a close relationship with provincial advice centres, where members of the public could launch complaints. The challenge was to empower borrowers and create awareness on the regulator’s role.
This would pave the way for the implementation of compliance sections of the National Credit Act, which take effect on June 1. The act would repeal the Credit Agreements Act, the Usury Act and Usury Act exemptions notice, Setou said, but transactions entered into before June 1 still had to comply with the old legislation.
Key features of the act include that all credit agreements must use simple, understandable language and give quotes.
Advertising and marketing must contain prescribed information on the cost of credit, and debt counselling will be introduced from June 1 for the restructuring of debts of over-indebted consumers.
Reasons must be given if a credit application is declined. Setou said credit bureau information was regulated and consumers had the right to a free credit bureau record