National Credit Act 34 of 2005

1. National Credit Act 34 of 2005 Overview

2. Protection of Consumers • To promote a fair & non-discriminating market for the access of credit • To prohibit unfair practices

3. Responsible credit granting practice • Prohibit reckless credit granting • Provide for general regulation of consumer credit • Provide debt restructuring in cases of over-indebtedness • Establish NCR & National Consumer Tribunal

4. Types of Credit Agreements • Credit facility eg credit card • Credit transaction eg pawn transaction; discount transaction; instalment transaction; mortgages, secured loans, leases; credit guarantees (suretyship)

5. Exclusions under NCA • Policy of insurance • Lease of immovable property

6. Consumer rights and duties • Right to apply for credit, free of discrimination against the borrower • Right to be protected against discrimination on the granting of credit • Right to plain and simple language being used in credit agreements

7. Consumer rights and duties • Right to receive a cop oyf credit agreements • Right to privacy regarding personal information • Right to free Credit Bureaux record once a year • Right to assistance by debt counsellor

8. Right to reasons why credit application may have been refused.

9. Fees and Charges • Closed list of fees, charged interest & items a credit provider may recover from consumer

10. Debt Review • Consumer may apply to debt counsellor to be declared over-indebted. • Debt counsellor may recommend that the magistrates’ court make an order that one or more of the consumer’s credit agreements should be declared reckless credit; or consumer’s obligation should be rea

11. Debt counsellor may recommend that the magistrates’ court make an order that • that one or more of the consumer’s credit agreements should be declared reckless credit; • or consumer’s obligation should be rearranged.

12. Magistrates’ court • It may reject the recommendation or application • Credit provider who received notice of court proceedings may not enforce any right under credit agreement until either court has considered the matter. • S129 of NCA

13. Unlawful provisions of credit agreements • Deprives a consumer or credit provider of any statutory or common law rights & obligations; • Exempt credit provider from liability for any act or representation; • States that consumer has received goods or services which have not in fact been delivered to the consumer;

14. Unlawful provisions of credit agreements • Acknowledges that before the agreement was made, no representations or warranties were made in connection with the agreement by the credit provider; • Agrees to forfeit money to the credit provider if the consumer exercises the right of rescission

15. Unlawful provisions of credit agreements • Appoints credit provider as an agent of the consumer; • Authorises any person acting on behalf of the credit provider to enter any premises to take possession of the goods; • Undertakes to sign in advance any document to enforce the agreement;

16. Unlawful provisions of credit agreements • Undertakes to sign in advance any document to enforce the agreement; • Consents to predetermined value of costs for enforcement of the agreement; • Limits the credit provider’s liability for court action

17. Unlawful provisions of credit agreements • Consents to the jurisdiction of any court outside the area inc which the consumer resides or works; • Agrees to deposit with credit provider an ID, bank account or atm access card. • Provides personal identification code or number to be used to access an account

18. Unlawful provisions of credit agreements • States that the rate of interest is variable.

19. Four additional protection available to parties to a credit agreement • Consumer must disclose location of goods. • Obligations are imposed on pawn brokers. • Limits are imposed on the costs of credit. • Statements of account must be provided

20. Termination of credit agreement • Rescission • Early settlement. • Surrender of goods. • Debt enforcement by repossession or court judgement

21. Rescission • Consumer can withdraw from lease or an instalment agreement only if it was entered into at a location other than the registered business premises of the credit provider. • Creditor provider must refund any money the consumer has paid under agreement with seven days after the delivery of the notice to terminate.

22. Early settlement • Consumer can terminate the agreement at any time wi.thout notice to the credit provider by payment of the full settlement amount

23. Surrender of goods • Consumer under an instalment agreement secured by loan or lease may give written notice to the credit provider to terminate the agreement.

24. Debt enforcement by repossession or court judgement A credit provider may go to court for a judgement if: • Consumer has been in default under the credit agreement for at least 20 days. • At least ten days have passed since the credit provider deliver a notice to the consumer & consumer has not responded. • In the case of instalment agreement, secured loan, or lease, the consumer must also not have surrendered the relevant property to the credit provider.

25. 2nd Test • Monday 01 October 2012 • Time: 16h30 • Venue: Elco • Scope Contract of Sale