Consumers are afforded great protection under the National Credit Act, which protection will only be increased with the promulgation of the Consumer Protection Act.
In terms of the National Credit Act (NCA), consumers are protected in, inter alia, the following scenarios:
- When a credit provider had recklessly advanced credit to a consumer, the credit provider may be ordered to forfeit its right to collect the outstanding monies due or re-posses the goods delivered to the consumer;
- A consumer may invoke Section 127, which entitles the consumer to return goods to the credit provider, forcing the latter to sell these goods on behalf of the consumer to decrease the consumer’s debt;
- The credit provider must follow an intricate process of demand before it may collect monies due to it. Should the credit provider fail to do so, the proceedings may be declared a nullity;
- A credit provider may only terminate a credit agreement in terms of Section 123 of the NCA;
- A consumer may, at any time and provided that he qualifies in terms of the NCA’s provisions, apply for and be placed under debt review.
In terms of the NCA, any consumer who has applied for debt review, may not be legally pursued by his creditors for a period of at least 60 days from date of said application in terms of Section 86(10).
However, should the credit provider already have proceeded in terms of Section 129 (Enforcement) to collect the monies due, Section 86 will not have any effect on the collection proceedings.
Further, should a consumer default while his application is being reviewed and after the aforesaid 60 days have lapsed, the creditor may proceed to have the review terminated by notice.
Should a consumer enter into a credit agreement with a credit provider while he is under debt review, he will not be protected and the Credit Provider may proceed against him as provided for in terms of the NCA.
Even though we are moving towards a strong consumer-orientated society, various acts still provide the credit provider with sufficient recourse, provided that the said credit provider has acted in accordance with legislation.
Ian Mc Laren