National credit act Flashcards
NCR
The regulatory body that applies the NCA, educates consumers about their rights and monitors, administers and ensures adherence of the NCA and the credit industry
Purpose
-Promotes the responsible granting of credit by credit providers
-Ensures that credit is equally available to all qualifying consumers
-Ensures that the credit providers are registered to avoid consumer exploitation
-Promotes the social and financial interests of South African consumers and by extension the South African economy
Impact (Positive)
-The NCA protects businesses against non-paying customers
-Businesses that are authorised credit providers may attract more consumers
-The whole credit process is transparent, both the providers and consumers know their responsibility
-Businesses complete thorough credit checks and receive up-to-date documentation from the consumer as proof that they can afford the credit
Impact (Negative)
-The implementation of the NCA is time-consuming,expensive, prescriptive, and administratively burdensome especially complex and expensive debt collection procedure
-Failing to comply with the NCA may result in legal action faced by the business
Non-compliance
-Blacklisting customers without exhausting all efforts to recover the debt by the consumer
-Charging different interest rates to different consumers based on discriminatory grounds such as race and age
-Failing to conduct affordability assessments to determine whether the customer can afford the credit being offered
-Granting credit recklessly to consumers and failing to explain the credit contract to consumers
Penalties
-The business license may be revoked for reckless granting of credit and gross violations contravening the NCA
-The business bears all costs of removing the negative information of clients who were blacklisted as a result of granting credit recklessly
-Businesses may not demand payment, sue or attach the client’s assets/salaries to repay debt
-Businesses may not charge any fee under that specific credit agreement
Ways to comply
-Conduct credit checks with a registered credit bureau or consult the NCR
-Register the business with the NCR
Submit annual compliance reports to the NCR
-Conduct affordability assessments to ensure that consumers can meet the obligations
FICA
South Africas primary anti-monetary laundering and counter-terrorism financing legislation
Rights of consumers in terms of the NCA
The right to:
-Fair and responsible credit marketing
-Refuse a credit limit increase
-Receive documentation as required by the NCA
-Receive protection of their personal information
NCA
-Concerned with consumer credit and the credit industry
-The NCA has resulted in the establishment of the Nation Credit Regulator
