This comes on the eve of World Consumer Rights Day, March 15, with the
regulator billing March as Consumer Rights Month.
With most South Africans increasingly dependent on loans and other forms
of credit, a lack of awareness on rights and obligations makes consumers
vulnerable to unfair lending practices and other pitfalls, which may result
in them being caught in a debt trap or spiral, says Peter Setou, the senior
manager of education and strategy at the NCR.
"As part of our education and awareness drive, we empower consumers with
information that will enable them to make informed financial decisions.
We believe that an informed consumer is a protected consumer," says Setou.
The National Credit Act, which came into being on June 1 2007, provides for
consumer rights in the following ways:
When entering into a credit agreement, consumers have the right to receive
documentation regarding that agreement.
A credit provider must provide consumers with a pre-agreement statement and quotation before they can sign the credit agreement. This must disclose the
amount borrowed, deposit to be paid (if any), number of instalments, interest
payable, any additional charges, credit life insurance, date of first instalment
and the date of last payment.
"Always make sure that you get a pre-agreement statement and quotation," says Setou.
Consumers have the right to receive information and documents in plain language. This means that the contents, meaning and importance of the document must be easy to understand. "Ask if you do not understand. Do not sign unless you understand the terms and conditions of the agreement," says Setou.
Consumers also have a right to have information held about them treated
confidentially. This means the credit provider may only use information for the purpose for which it was given.
With regards to credit information, consumers have the right:
to be informed that the credit provider intends to report negative information on them to a credit bureau before the credit provider actually reports the consumer;
to receive a copy of their credit record from a credit bureaux when request. "You can get one free record per year, but the credit bureaux may charge you a fee for any further records," says Setou;
to challenge information kept by credit bureaux if they are unhappy with the
information; for their information to be kept confidential, and for their information to be used only for purposes allowed by the act.
Setou says that if consumers experience problems with servicing their debts, they should take contact their credit provider to discuss their situation and negotiate an affordable repayment plan. "If you cannot reach an agreement with your credit provider, you may contact a debt counsellor in your area," says Setou.
Consumers who are under debt counselling will not be able to get further credit until they have settled all their debts.