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Give information and know laws on credit

RIGHTS: NDMA CEO Magauta Mphahlele Photo: Robert Tshabalala
RIGHTS: NDMA CEO Magauta Mphahlele Photo: Robert Tshabalala

CONSUMERS are obliged to provide the correct information regarding their income, expenditure and other financial commitments so that credit providers can make a proper assessment of their affordability and creditworthiness.

This is the assertion of the chief executive officer of the National Debt Mediation Association (NDMA), Magauta Mphahlele.

After the introduction of the National Credit Act (NCA) in July 2007 and the Consumer Protection Act in 2010, consumers enjoy a host of rights.

"But these rights mean nothing if consumers are not aware of them and do not exercise their rights and corresponding obligations," Mphahlele said.

"Credit can only be rejected on reasonable commercial grounds that are customary with the risks of the credit provider's management and underwriting practices or in line with the requirements of the NCA," Mphahlele says.

"Consumers are obliged to provide the correct information regarding their income, expenditure and other financial commitments so that the credit provider can make a proper assessment of their affordability and creditworthiness," said Mphahlele.

On the other hand, consumers have a right to know why their applications have been declined.

Mphahlele says if a credit provider declines an application, the credit applicant has a right to know why. If it is because of a credit bureau report, the consumer must be provided with the name, address and other contact details of that credit bureau. However, consumers are responsible for annually requesting their credit bureau reports to ensure that the information contained in them is correct.

"Should a lender decline to enter into a credit agreement, refuse to increase a credit limit or to renew an existing credit card or other facility, the provider should supply written reasons," she says. If consumers experience difficulties they should contact the credit provider or the NDMA for advice.

"Consumers have a right to receive any documents that are required to be delivered to them in terms of the Act in plain language," she said. Mphahlele urged consumers to take time to read their contracts.

"If more consumers familiarise themselves with their rights in terms of the NCA, they would avoid the cost, time and stress of having to deal with disputes regarding the agreements they have entered into," she says.

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