Johannesburg - South African consumers should be aware of their rights regarding credit, the National Debt Mediation Association (NDMA) said on Wednesday.
“In South Africa, we have progressive legislation in the form of the National Credit Act (NCA), which protects credit consumers,” NDMA CEO Magauta Mphahlele said in a statement.
The association was publicising the matter to celebrate World Consumer Rights Day, under the theme “Consumer Justice Now”, on Friday.
“Justice is only possible where consumers are well-informed and there are effective institutions and mechanisms through which consumers can access redress,” she said.
Under the NCA, service providers needed to ensure that information contained in credit applications was accurate and truthful, and that the consumer could afford the loan.
The consumer needed to receive a quote and a pre-agreement statement with the terms and conditions and the costs involved. If credit was not approved, the consumer had the right to know why.
“But consumers should be aware that they are responsible for ensuring that they understand what they sign and update their contact details so that any correspondence from the credit provider reaches them on time,” Mphahlele said.
“If you do not update your details regularly, or sign something you do not understand, you risk compromising your rights.”
Consumers were entitled to compare interest rates and deals across different credit providers.
They should also not feel under pressure to sign agreements they did not understand.
A consumer also had the right to lodge complaints or negotiate their payment terms if they could not afford repayments.
“If you skip more than three months' payment, you may face legal action which leads to more unnecessary costs and fees, so the earlier you tell them, the better.”
The NDMA, Credit Ombud or a debt counsellor could be approached to negotiate on one's behalf with credit providers.
When faced with a dispute, consumers could request debt mediation services. The NDMA provided this service free of charge to both credit providers and consumers.
Mphahlele encouraged South Africans to empower themselves with knowledge and seek advice to make sure they made informed decisions. - Sapa