Download
1 / 16
160 likes | 276 Vues
The National Credit Act 34 of 2005 aims to ensure fair and accessible credit while protecting consumers. Key objectives include prohibiting unfair marketing practices, providing consumers with relevant information, establishing dispute resolution systems, and enabling debt reorganization. It applies to various credit agreements, with specific provisions for small, intermediate, and large credits. The Act emphasizes consumer rights, including the right to apply for credit, receive information in understandable language, and confidentiality. It also prevents reckless credit granting and outlines debt review processes for over-indebted consumers.
E N D
Business Law National Credit Act 34 of 2005
The National Credit Act: Objectives • 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
Who does it apply to? • 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
Types of Credit Agreements • Small Credit Agreements • Intermediate Credit Agreements • Large Credit Agreements
Small Credit Agreement • A pawn transaction, credit facility or credit transaction of less than R10 000
Intermediate Credit Agreement • A credit facility or credit transaction of between R10 000 and R250 000
Large Credit Agreement • A mortgage agreement, credit facility or credit transaction of more than R250 000
Regulation • National Credit Regulator • National Consumer Tribunal • Regulations • Register if more than 100 agreements or total exceeds R500 000 • Credit bureaux to register • Debt counsellors to register
Consumer Rights • Right to apply for credit • Right to reasons for refusal • Right to information in official language • Right to plain & understandable language • Right to receive documents • Right to confidentiality
Credit Marketing • No automatic agreements unless refused • No automatic credit limit increases • If comparing alternatives show costs of each
Prevention of Reckless Credit • No reckless credit granting • Assess consumers understanding of risks & costs, rights & obligations, financial history & financial means • Recklessly granted credit may be set aside
Debt Review • 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
Debt Review • 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
Unlawful Provisions • 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..
Other protections • 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
Termination • On payment in full • By rescission within 5 days (unless at CP premises) • Early settlement • Surrender of goods • Debt enforcement by court order
