Credit can be a risky business and you may be afraid of credit providers taking advantage of you. That’s what the National Credit Act 34 of 2005 (NCA) is for – to protect you.
The NCA regulates credit providers such as banks, micro lenders and retailers that provide store accounts, as well as debt counsellors and the credit bureaus. Credit products covered under the NCA include home loans, vehicle finance, overdrafts, credit cards, personal loans and clothing or furniture accounts.
The NCA also created an independent consumer forum, the National Consumer Tribunal, so that you’d have a fair, impartial body to adjudicate any disputes between you and a credit provider, as well as a place to go about any contraventions of the NCA.
What are your rights and responsibilities?
You have the right to apply for credit and not be discriminated against because of your race, religion, political affiliation, sexuality, marital status, gender etc. This doesn’t mean you have the right to get credit – the credit provider may decline your application if, for example, you can’t afford the repayments.
If your application is declined, you have the right to request a written reason from the credit provider. If it was because of your credit report then the credit provider needs to give you the details of the credit bureau they got it from.
You have the right to be given written documents relating to any credit transaction you enter into and the documents must be in plain language so that they are easy to understand. However, it’s your responsibility to ensure that you understand all the terms and conditions of any contract before you sign it.
You have the right to confidentiality. You provide a lot of sensitive information when applying for credit and your credit provider can’t just use your information as they please. Your information can only be released on your specific instruction or in terms of any legislation.
You have the right to periodic statements – once a month or every two months for an instalment sale agreement or once every six months for a home loan.
You have the right to access the information that the credit bureaus have on you – you are entitled to one free credit report a year from each bureau. You also have the right to challenge the information if anything is incorrect, however, it’s your responsibility to report this to the bureau.
What the credit bureau is allowed to know
Credit bureaus are companies that collect people’s credit payment information from credit providers (and the courts if a person has a judgement against them).
Credit bureaus are regulated by the NCA in terms of what information they are allowed to keep. They are allowed to retain your previous credit history, your financial history, personal details like your ID number, education, employment and career history as well as information that can be used to detect fraud. They are not allowed to keep information on your race, political connections, trade union membership, sexuality, religion or beliefs or your medical history.
When you apply for credit, the credit provider can access your payment history information from the credit bureau – but remember that they need your permission to do so. If you see any credit applications on your credit report that you didn’t make, it is probably a sign of identity theft. This is one reason why it’s important to get your free credit report every year.
Being in the know will help you make wiser decisions about your financial future! Make sure you know what you’re agreeing to, know your rights and try to #LearnSomethingNew every day.