Know your legal credit/ debit rights
All consumers must know their rights when it comes to applying for credit
IT is vital for all consumers to know their rights when applying for credit before signing on the dotted line.
Below is some helpful advice from African Bank’s Group Executive: Sales and Branch Network, Mellony Ramalho.
Knowing whether or not a credit agreement is lawful – before signing the agreement – is critical.
‘A credit agreement is considered to be unlawful when the consumer is, for example, a minor and no guardian was present at the time of signing,’ said Ramalho.
‘The consumer also has to be mentally fit and the credit provider must be registered with the National Credit Regulator.’
Negative option marketing, where a credit provider offers a consumer credit which then automatically becomes a credit agreement unless the consumer rejects the offer, is also
unlawful and can be challenged.
‘Never accept a clause which says you have waived certain rights that may apply to credit agreements.
‘The rights that cannot be waived include a consumer’s right to apply for debt review when over indebted, the right to have repossessed goods sold at a fair, market-related price, and the right to dispute any debits that pass through a consumer’s account,’ said Ramalho.
Other noteworthy unlawful credit clauses include those that require consumers to acknowledge receipt of goods or information from a credit provider before these have been received, and clauses requiring the consumer to agree to forfeit monies paid to credit providers in the event of the consumer terminating the agreement.
‘It’s also important to note that there should never be a clause in an agreement that requires you to leave items including ID books, bank cards or PIN codes with credit providers,’ said Ramalho.
For more information or clarity on specific issues, the National Credit Regulator can be contacted on 0860 627 627 or complaints@ncr.org.za.
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