The National Credit Act was introduced by the South African government in 2007 to promote and advance the social and economic welfare of South Africans, to promote a fair, transparent, competitive, sustainable, responsible and accessible credit industry as well as to protect all credit-active consumers. (National Credit Act, 34 of 2007).
With this view in mind, certain rights have been bestowed upon credit-active consumers as well as other parties such as banks and other financial institutions. Financial institutions are well aware of their rights in terms of the act, however, most consumers are still not quite clued up about their rights and often suffer the consequences of ignorance.
Consumer rights are contained in Part A, Chapter 4 of the National Credit Act. These rights generally outline what is and what is not acceptable in the credit industry where consumers are concerned. The National Credit Act gives consumers the following rights:
- The right to apply for credit
- An adult natural person has a right to apply for credit. This, therefore, means that consumers cannot be refused to apply for credit. The right to apply to for credit does not necessarily mean that consumers have a right to be granted credit as credit providers have a right not to grant a consumer credit on any reasonable commercial grounds. In essence, its your right to apply for credit but it may or may not be granted
- Protection against discrimination in respect of credit
- Credit Providers cannot discriminate against a consumer when such a consumer has applied for credit. Among others, a credit provider cannot discriminate on a consumer based on race, gender, religion, sexual orientation, etc. All consumers are to be treated fairly and equally
- The right to information for credit being refused
- Credit Providers have a right to refuse to grant credit to a consumer, however, a consumer has a right to request a reason for credit not being granted to them. Credit Providers are required to provide to such a consumer, in writing, the dominant reason why credit was refused
- The right to information in official language
- Though consumers have a right to information in an official language, the act also takes into account several aspects in the provision of such information in any other language other than the language used by such a credit provider. The act takes into account usage, practicality, expense, regional circumstances as well as the balance of needs and preferences of the population ordinarily served by the credit provider
- A submission of this request may be required and may need to be processed before the information is made available in another language. It might be best to inquire with the concerned credit provider what their language policy is when applying for credit if they are using a language you are not able to read or understand
- The right to information in plain and understandable language
- This right essentially centres on the idea of a consumer being able to comprehend the credit agreement before agreeing to it. The information should be easily understandable by an ordinary person that the credit provider will be extending credit to, taking into account the literacy skills and credit experience of such ordinary persons
- The right to receive documents
- A credit provider is required to make available to you, often upon request. So, if you have a credit agreement, you may request a copy of the actual agreement months or years later and the credit provider is required to furnish you with such documents
- The act allows for various methods at which this information may be made available to consumers, including providing this information person, by mail, email, fax or even web page
- The protection of consumer credit rights
- This right has an over-arching role in the sense that credit providers are required to protect consumer rights above. They may not alter or propose to alter any of the rights bestowed by the act as a term or condition of the credit agreement. For instance, the credit provider may not include a clause that you accept that certain documentation in relation to the credit agreement will not be furnished to you upon conclusion of the agreement as it would be a violation of your right to receive documents. Consumers may not be penalized for enforcing their rights nor can legal action be taken against a consumer who is enforcing the right under the National Credit Act
It is important to know the general rights that are granted to consumers by the National Credit Act. It is also important to note that these rights are not exhaustive, but are rather general as the National Credit Act goes on to detail many other rights in a wide variety of situations.