Are you a possibly a victim of reckless lending?
How do you know if you have been granted credit recklessly?
What can you do if you have been given credit recklessly?
Not many South African consumers understand what reckless lending is, how to identify it and what to do when they have been extended credit recklessly.
In a nutshell, the National Credit Act (NCA) require all credit providers to perform certain tasks and assessments before granting credit. If they have failed to complete these tasks or assessments before granting crediting credit, such a credit agreement becomes reckless.
Reckless Lending is contained in Section 80 and 81 of the National Credit Act and this is how you can identify if credit has been extended recklessly:
- A credit provider did not do an affordability assessment to evaluate if you are able to repay the credit agreement
It does not matter whether you could actually afford to repay the credit agreement. The mere fact that a credit provider failed to do this assessment makes the credit agreement reckless.
- A provider gave a consumer a credit agreement that made such a consumer over-indebted
Being over-indebted is a financial position where your net income is not sufficient to cover all of your living expenses and debt obligations. Essentially, if as a result of a certain credit agreement, a consumer became over-indebted, such a credit agreement would be reckless.
- A credit provider entered into a credit agreement with a consumer that did not understand the risks, costs and obligations of the credit agreement
Therefore, if a consumer did not understand the above mentioned, such a credit agreement will be deemed to be reckless.
If you believe any of your credit agreements to have been granted to you recklessly, you may contact the credit provider and request them to prove to you that the credit agreement was not granted to you recklessly.
If you are still convinced that the credit agreement is still reckless, you may then contact the National Credit Regulator on 0860 627 627 or the Banking Ombudsman on 0860 800 900 to lodge a complaint.
You need to be aware that it is a complete defence for any credit provider if you did not provide them with accurate and complete information. For instance, if they asked if you had any other expenses and you stated no…and it turns out that you actually have banking charges that did not disclose to them, your case might be compromised.