1. Business Law
National Credit Act 34 of 2005

2. The National Credit Act: Objectives
Aims to promote fair, competitive & accessible credit and to protect consumers by:
Prohibits unfair marketing
Provides information to consumers
System to resolve disputes
Debt reorganisation
Credit bureaux etc

3. Who does it apply to? Every credit agreement except:
Juristic persons with asset value or T/O in excess of R1 million
The State
Credit provider located outside RSA
Large Credit Agreements

4. Types of Credit Agreements
Small Credit Agreements
Intermediate Credit Agreements
Large Credit Agreements

5. Small Credit Agreement
A pawn transaction, credit facility or credit transaction of less than R10 000

6. Intermediate Credit Agreement
A credit facility or credit transaction of between R and R

7. Large Credit Agreement
A mortgage agreement, credit facility or credit transaction of more than R

8. Regulation National Credit Regulator National Consumer Tribunal
Regulations
Register if more than 100 agreements or total exceeds R
Credit bureaux to register
Debt counsellors to register

9. Consumer Rights Right to apply for credit Right to reasons for refusal
Right to information in official language
Right to plain & understandable language
Right to receive documents
Right to confidentiality

10. Credit Marketing No automatic agreements unless refused
No automatic credit limit increases
If comparing alternatives show costs of each

11. Prevention of Reckless Credit
No reckless credit granting
Assess consumers understanding of risks & costs, rights & obligations, financial history & financial means
Recklessly granted credit may be set aside

12. Debt Review
Consumer may apply to debt counsellor to be declared over indebted
Debt counsellor investigates & if over indebted makes recommendation to Magistrates Court
If not over indebted may suggest parties voluntarily agree on debt rearrangement

13. Debt Review
If over indebted – Mag Court to receive debt counsellor recommendation and decide if to reject or to declare any agreement reckless or rearrangement of consumer obligations
If not over indebted & creditor rejects DC recommendations, DC may refer to Mag Court

14. Unlawful Provisions
Any clause in a credit agreement that does any of the following is unlawful:
Deprives consumer of any statutory rights
Exempts CP from liability
Excludes any implied warranty
States that no warranties were made before agreement
States that goods have been received (if not)
Forfeits any money paid if default
Requires deposit of ID book, ATM card etc etc..

15. Other protections
Consumer must advise CP of address where goods kept & of change of address
Pawn brokers must specify date on which agreement ends & must deliver goods if paid by this date
Limits on costs of credit
CP must provides statements to consumer

16. Termination On payment in full
By rescission within 5 days (unless at CP premises)
Early settlement
Surrender of goods
Debt enforcement by court order