When the National Credit Act, 34 of 2005 (hereinafter the NCA) came into operation on 1 June 2007 it’s sole intent was to provide protection for the over-indebted consumer. What Must I as a Consumer Know About Reckless Credit?
The South African Credit Market is governed by the NCA and its amendments introducing the concept of reckless credit, also known as reckless lending.
What is Reckless Credit?
Reckless Credit is an act by the Credit provider when credit is granted to the Consumer when the Consumer could not afford to repay such Credit at the time when it was granted to the Consumer.
The aim of the NCA, when introducing the principle of Reckless Credit was to promote responsible credit granting and discourage reckless lending.
When Do I Know If I Entered Into an Agreement Which Was Granted Recklessly?
According to Section 79(1) of the NCA, a Consumer is over-indebted, when the Consumer will be unable to satisfy her obligations under all the credit agreements entered into at that specific moment in time.
If you, therefore, entered into a credit agreement at such a time when you could not afford it, and the Credit provided did not apply the necessary caution to determine your indebtedness at that moment in time, you will be abused by reckless credit or reckless lending.
How is The Over Indebtedness Then Determined?
To determine the Consumers’ over-indebtedness, the Credit provider must look at the Consumer’s financial means, prospects and obligations as well as the probable propensity to satisfy all obligations under all credit agreements in a timely manner at the time of application for credit.
This determination is known as the Consumer’s financial means to settle his or her debts. Financial Means also include consumers’ assets and liabilities and his/her prospects of improving their financial position.
What To Do If I Receive Free Credit In The Mail?
It happened to all of us at some point in time that we have received a letter in the mail offering us credit.
The content of the letter normally states that you qualify for an amount of credit without you even applying for this.
To ensure that you do then receive this money, you need to provide your financial documents to the store/credit provider.
This is an easy way to lure the Consumer in to apply for credit the Consumer did not even intend to apply for in the first instance.
This is mostly also in these circumstances where reckless credit is provided when the credit provider is providing credit and not doing a proper investigation into the Consumer’s financial affairs.
What Must I do If This Has Happened To Me?
This can save you a lot of stress. Your Debt Angel will also do an analysis to determine if reckless credit was provided to you.
Should your Debt Angel determine that an agreement was made recklessly, your Debt Angel will apply to the Court to make an Order of reckless lending, and you will not be held liable for reckless lending debts accrued.
Do not delay! Apply Today. On the wings of your Debt Angel, you will fly to financial freedom!
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