Who regulates credit applications

04 January 2021 , Dries Knoetze 586

Who regulates credit applications (i.e. loan agreements) and where can one complain if you are not satisfied?

“Due to Covid 19, I was necessitated to approach a small credit provider for a micro loan amount of R5 000.00. I signed all the necessary documents after it was explained to me and was to repay the loan in two installments. Upon payment of the last installment I was confronted with a statement indicating that I still owe an amount of R3 500.00 towards the debt. I requested an explanation from the credit provider who indicated that interest was charged at 30%. I want to complain as I did not agree to 30 % interest being levied”

The regulatory authority dealing with credit agreements and credit providers is the National Credit Regulator or the NCR.

The NCR was established in terms of the National Credit Act, and in terms of this act all credit agreements and providers are regulated in order to give effect to its purpose being to promote and advance social and economic welfare of South Africans; to promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumer.

Now returning to the question at hand, who can complain to the NCR?

Any ordinary consumer may lodge a complaint against any institution offering credit, against a debt councilor and a credit bureau provided the NCR has jurisdiction.

Only persons with a power of attorney may lodge complaints on behalf of another person.

Juristic (trust, companies etc) may lodge a complaint if the person making the complaint is authorized to do so and the annual turnover of the business or group of businesses is less than R1 000 000, or if the agreement in question is less than R 250 000.00

Although the NCR has jurisdiction over certain complaints consumers are encouraged to first lodge a complaint with the respective credit providers, debt counselors or credit bureau before escalating to the NCR.

After answering the above question, a follow up question would be what type of complaints can be handled by the NCR:

The NCR can assist you if your complaint relates to:

a credit agreement and its contents e.g. interest, initiation fee etc
arose after the implementation of the NCA (1 June 2007);
a debt counselors and credit providers;
the credit bureau, provided you have first lodged a dispute with the credit bureau, (who has 20 working days to investigate) and you are not satisfied with their decision;
·over-deductions/ overcharging
refusal to issue statements;
disputed settlement amounts
refusal to cancel during the cooling off period which is 5 days;
reckless lending
·non-adherence to section 127 & 129, Taking legal action or repossessing without following the prescribed steps
PDA not distributing monies
Unprofessional conduct by the debt counselor
Creditors taking legal action whilst under debt review
Accounts not restructured in accordance with the debt review court order.
Creditors terminating debt review
Creditors listing consumers while on debt review;
Debt counselors not contactable
Overcharging by debt counsellors

Certain complaints that fall outside the NCR’s mandate and cannot be adjudicated over, which are the following:

Service agreements, e.g. Vodacom, MTN, Levies, Municipal accounts, gym etc.
A matter that would more appropriately be dealt with by a court of law or another dispute resolution process;
A matter which is or has been or currently is the subject of litigation, subject to certain exceptions.
A matter relating to administration or Administrators;
Debts collected by debt collectors, these should first be addressed to the Council for Debt Collectors;
Complaints relating to damaged goods, these should be sent to the National Consumer Commission or Motor Vehicle Ombudsman for vehicles;
Debit orders going off on the wrong dates;

Now turning to the factual problem indicated above, it would appear that the complaint in fact can be adjudicated upon by the NCR due to the fact that the interest is charged at 30% and due to the fact that there is a dispute relating to the settlement amount.

In order to establish if your dispute can be handled by the NCR, it is advisable to approach the office of your local attorney to assist you to properly lodge a complaint or to determine if your complaint falls within the ambit of the NCR.

You can also contact the NCR directly for assistance.

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