Transcript Business Law

National Credit Act 34 of 2005
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Aims to promote fair, competitive &
accessible credit and to protect consumers
by:
Prohibits unfair marketing
Provides information to consumers
System to resolve disputes
Debt reorganisation
Credit bureaux etc
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Every credit agreement except:
◦ Juristic persons with asset value or T/O
in excess of R1 million
◦ The State
◦ Credit provider located outside RSA
◦ Large Credit Agreements
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Small Credit Agreements
Intermediate Credit Agreements
Large Credit Agreements
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A pawn transaction, credit facility or credit
transaction of less than R10 000
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A credit facility or credit transaction of
between R10 000 and R250 000
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A mortgage agreement, credit facility or
credit transaction of more than R250 000
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National Credit Regulator
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National Consumer Tribunal
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Regulations
◦ Register if more than 100 agreements or total
exceeds R500 000
◦ Credit bureaux to register
◦ Debt counsellors to register
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Right
Right
Right
Right
Right
Right
to
to
to
to
to
to
apply for credit
reasons for refusal
information in official language
plain & understandable language
receive documents
confidentiality
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No automatic agreements unless refused
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No automatic credit limit increases
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If comparing alternatives show costs of
each
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No reckless credit granting
◦ Assess consumers understanding of risks & costs,
rights & obligations, financial history & financial
means
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Recklessly granted credit may be set aside
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Consumer may apply to debt counsellor to
be declared over indebted
◦ Debt counsellor investigates & if over
indebted makes recommendation to
Magistrates Court
◦ If not over indebted may suggest parties
voluntarily agree on debt rearrangement
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If over indebted – Mag Court to receive
debt counsellor recommendation and
decide if to reject or to declare any
agreement reckless or rearrangement of
consumer obligations
If not over indebted & creditor rejects DC
recommendations, DC may refer to Mag
Court
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Any clause in a credit agreement that does
any of the following is unlawful:
Deprives consumer of any statutory rights
Exempts CP from liability
Excludes any implied warranty
States that no warranties were made before
agreement
◦ States that goods have been received (if not)
◦ Forfeits any money paid if default
◦ Requires deposit of ID book, ATM card etc etc..
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Consumer must advise CP of address
where goods kept & of change of address
Pawn brokers must specify date on which
agreement ends & must deliver goods if
paid by this date
Limits on costs of credit
CP must provides statements to consumer
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On payment in full
By rescission within 5 days (unless at CP
premises)
Early settlement
Surrender of goods
Debt enforcement by court order