The National Credit Regulator (NCR) has urged consumers to be aware of their rights when it comes to credit agreements.
"It is your money and therefore, it is your right as a consumer to have full knowledge of all credit agreements you enter into," says Education & Communications Manager at the NCR, Cornie Tema.
Internationally, the 15th of March is celebrated as World Consumer Rights Day. In South Africa, March is dubbed the Consumer Rights Month. The National Credit Regulator in conjunction with the Consumer Protection Forum (CPF) is embarking on programmes aimed at educating South African consumers about their rights and obligations.
The CPF comprises of the National Credit Regulator, nine Provincial Consumer Affairs Directorates, the Council for Medical Schemes (CMS), Financial Services Board (FSB), Independent Communications Authority of South Africa (ICASA) to mention a few. The international theme which has been adopted is "our money, our rights: campaigning for real choice in financial services".
The National Credit Act (NCA) came into effect to level the playing field. Consumers have rights; however, they also have obligations when entering into credit agreements. Obligations such as honouring the terms and conditions of credit agreements they enter into.
"Drawing up a budget to assess whether you will be able to afford the credit you intend taking, comparing deals between credit providers and understanding the terms and conditions of credit agreements are important steps before signing a credit agreement", says Tema.
He says when taking out credit, consumers should always ask for a pre-agreement statement and quotation which clearly shows the borrowed amount, deposit payable if any is needed, interest charged, period of repayment, date of first installment, date of last installment etc.
"Additional charges such as initiation fees, monthly service fees and credit life insurance should also be stated in the pre-agreement statement and quotation, he adds".
Under the National Credit Act, consumers have the right to receive information and documents in plain, simple language. "This means that the content, meaning and importance of the documents must be easy to understand.
Consumers also have the right to receive any documents required in terms of the NCA in an official language of the consumer's choice to the extent that it is reasonable having regard to usage, practicality, expense, regional circumstances and the balance of the needs and preferences of the population ordinarily served by the person required to deliver that document", adds Tema.
"Do not sign unless you fully understand the content including the terms and conditions of the credit agreement", adds Tema. "While the National Credit Act provides that every person has the right to apply for credit from any credit provider, it does not prevent credit providers from turning down your application.
"However, if your application is declined, you have the right to be provided with reasons on why it was declined. "Please note that the National Credit Act does not decline credit applications, it is merely an Act of Parliament enforced by the National Credit Regulator", explains Tema. "The credit provider should provide you with reasons on why they are declining".
You also have a right to have information held about you treated confidentially. Therefore credit providers may only use information for the purpose which it was given for.
Tema further explains that consumers have the right to access and challenge information held by a credit bureau. "Consumers are entitled to a free copy of their credit report from any of the eleven registered credit bureaux when they request for it. Additional credit reports can be accessed at a nominal fee of R20 excluding VAT."
"You also have the right to be informed if a credit provider intends to report negative information about you to a credit bureau before the credit provider actually does so. Therefore, it would be of benefit to all consumers to check their credit reports regularly to know what it entails.
By checking your credit reports, you will be able to pick up if there's any incorrect information on your credit report", adds Tema. He says one of the most important aspects of the National Credit Act is that it gives consumers the right to get assistance when they are over-indebted.
"If you are experiencing difficulty in servicing your debts, act as soon as possible," he says. "Don't wait until you start receiving final demand letters. Speak to your credit providers soonest, preferably before defaulting", says Tema.
He says the first step is to contact your credit provider to discuss your situation and negotiate an affordable repayment plan. "If you cannot reach an agreement with your credit provider, contact a registered debt counsellor in your area for assistance soonest."
"Remember, you will not get any further credit whilst under debt counselling. Never skip your payments, even when you are under debt counselling. You should continue making payments, because if you do not pay, you could lose your house or your car", concludes Tema.