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Know your credit rights

Posted: 16 Jul 2014

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Credit rights explained

Did you know that South Africa has one of the most comprehensive, amazing constitutions in the world? Over two million South Africans participated in the making of our constitution, which is part of our legacy that we should celebrate this coming Madiba Day. As a consumer, you are protected by the laws governed by our Constitution. The National Credit Act requires of credit providers to adhere to a number of laws that are in your best interest.

Know your credit rights! Here are five credit laws that you should take note of:

1.  The right to apply for credit The National Credit Act (NCA) gives you the right to apply for credit. All consumers must be treated equally in relation to one another when credit providers assess your application, determine rates/fees and compile and enforce the credit agreement. Banks and credit providers are pleased to receive and evaluate your application, but they are allowed to approve or reject the application. They may also use their own evaluation method provided that the method is not in conflict with the National Credit Act (NCA). If you believe that your application has been rejected due to unlawful discriminatory practices, you have the right to approach the equality court or the National Credit Regulator. 2. The right to know why credit has been refused You may ask the credit provider or bank to explain, in writing, their main reasons for:
  • Refusing your application for a new loan/credit
  • Refusing your application for an increased limit on existing loan/credit
  • Refusing to renew a renewable loan/credit (such as a credit card)
  • Offering a lower credit limit than the limit you applied for
  • Reducing your existing credit limit
If your credit report is reflecting negative information, the bank or credit provider has to disclose the name, address and contact details of the credit bureau that issued the report, so that you can get hold of your report to see what information on the report is keeping you from a successful application. 3. The right to receive your information in plain and understandable language Information has to be presented in a way that anyone can understand. To ensure that this happens, the bank or credit provider has to use plain language, simple sentence structures and uncomplicated graphics and illustrations to help you understand your credit application. 4. The right to confidentiality You have the right to maintain your confidentiality. Unless you give permission, the banks, credit providers and credit bureaus are not allowed to disclose your personal information to any other party, except when required by Law or court order. 5. The right to receive your documentation You as a consumer have the right to receive your documents. The bank and credit provider must have the following delivery mechanisms in place:
  • Ordinary mail
  • Fax
  • Email
  • Printable web-page
They may not charge you for this and you can choose what method you prefer. Should you prefer to have the document delivered in person, you may have to pay for it. You can also request a replacement copy of these original documents once every twelve months. It you need replacement copies of any other documents not specified as compulsory in the National Credit Act, you may be charged search and production fees. It is also your right to receive your FREE credit report once a year, every year, from the Credit Bureaus operating in South Africa. You are entitled to dispute incorrect entries made and, if you can’t reach an agreement with the Credit Bureau, you are allowed to approach the Ombudsman.

The content of this post was developed by Compuscan Academy – the 2013 winner of the BANKSETA [email protected] Award for the accredited training provider category.

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