South Africa can only experience real economic growth when consumers have trust in their preferred providers. South African consumers have the right to be offered quality service and products. And, they should be protected and valued at all times. Since March is all about rights and World Consumer Rights Day was on March 15, 2021, it is an encouraging reminder of the various consumer (aka applying-for-credit) rights South Africans already have in place.
South African consumers have, amongst others, rights in terms of the National Credit Act (NCA) to:
- Apply for credit
- Know why credit was declined
- Receive information and documentation in their desired official language
- Be given information and documentation in simple and clear language
- Receive documentation in their preferred delivery manner
- Receive statements at no cost/without charge
- Get access to a free credit report once a year from any registered credit bureau
- Question/dispute incorrect information via credit bureaus (if evidence is available)
- Let their privacy be respected/confidentiality of information be protected
- Prohibit reckless lending practices
- Not be misinformed via marketing/advertising material or methods used to ‘sell credit’
- Apply for debt review/counselling when over-indebted/not able to meet all their debt/credit obligations.
South Africans should ‘shop around’ to get the best terms and rates available when they want to apply for credit. And, consumers should receive a quotation before any credit agreement is accepted. The quotation received, should clearly disclose the fees and instalments involved.
Regarding the importance of the examples above, here are a few scenarios consumers can relate to, and by knowing their rights in similar situations will surely come in handy:
Buying a vehicle
Mrs X wants to buy a car and applies for credit. Unfortunately, her application for credit has been declined. She has the right to inquire why her application has not been accepted and is informed via the credit provider that her credit profile is in a bad state. She disagrees with the given feedback because she knows she is in a position to get financing for a car. Mrs X’s dispute (together with evidence provided) has been logged at the credit bureau and within 20 days receives feedback that the mistake on her profile has been corrected. She can now apply for credit again.
Taking out a personal loan
Mr Y has the right to ask for a quotation when applying for a personal loan. The credit provider has to disclose all the fees, instalments and necessary terms involved. Mr Y, therefore, needs to ask for the credit agreement (free of charge) to also see what the credit life instalment entails, for example. He has the right to take a look at the credit life premium and can also decide to choose his own credit life insurance provider instead.
Although the above scenarios are only a drop in the bucket when it comes to consumers applying their rights while taking out credit, March is the perfect awareness month for South Africans to start getting familiar with their rights. This can also allow them to then manage their debt effectively and accordingly.
Over-indebted consumers are encouraged to get the best assistance from skilled professionals to fix their debt sooner rather than later. It is one of consumers’ various rights after all.
Carla Oberholzer is a spokesperson and debt advisor at DebtSafe.