Are there reckless lending cases in South Africa?
Are there reckless lending cases in South Africa?
1. What is it? Many consumers are unaware that there are numerous reckless lending cases in South Africa. This is why it is important to know your rights as a consumer, and understand the rules set out by the National Credit Act (NCA) before taking out credit offered to you by credit providers.
Who are the banks found guilty of reckless lending?
Late last year, leading banks – Absa, African Bank, Capitec, First National Bank (FNB) and Nedbank – were among a host of credit providers found guilty of reckless lending in seven cases heard in the Vryheid magistrate’s court in KwaZulu-Natal.
Why is the NCR concerned about reckless lending?
“The NCR views reckless lending in a serious light, due to its negative impact on consumers and the current high levels of consumer over-indebtedness in the country,” Motshegare says. The National Credit Act (NCA) makes provision for the imposition of a fine for reckless lending.
How much can you be fined for reckless lending?
The National Credit Act (NCA) makes provision for the imposition of a fine for reckless lending. It can be up to R1 million or 10 percent of a credit provider’s annual turnover, whichever is greater.
1. What is it? Many consumers are unaware that there are numerous reckless lending cases in South Africa. This is why it is important to know your rights as a consumer, and understand the rules set out by the National Credit Act (NCA) before taking out credit offered to you by credit providers.
What happens if you fall into reckless lending?
If you fall into arrears even though your financial circumstances have not changed, your credit providers could be at fault. This means you could have the court declare that the credit agreement was a case of reckless lending. Consequently, you could have the debt written off, which means that you would not have to pay it.
Can a consumer accuse a credit provider of reckless lending?
While the act does state that consumers can’t accuse a credit provider of reckless lending if they were not 100 percent truthful about their financial situation when the contract was entered into, Steyn said her office’s counter argument was that the credit provider did not take “reasonable steps to assess the consumer’s affordability”.
When did reckless lending start in the UK?
If you took out credit after 2007 and fell into arrears, you may have fallen victim to reckless lending. Credit providers are legally required to perform affordability assessments to ensure that you can afford to make repayments on your debt.