Credit providers had better watch out: the overcharging of initiation fees, the overselling of credit insurance, and the practice of denying high-risk consumers secured credit only then to sell them unsecured credit are “undesirable market practices” and they will not be tolerated.
This hard-hitting warning comes from Nomsa Motshegare, chief executive officer of the National Credit Regulator (NCR).
Motshegare this week added her voice to the national debate about the rapid and ongoing growth in unsecured lending and the risk of a credit bubble should this growth persist.
The NCR is investigating “multiple credit providers”, she says.
“The NCR is investigating the manner in which unsecured lending is conducted, with specific concern as to whether the market approach could or is giving rise to the provision of reckless lending and over-indebtedness of the consumer.”
At the conclusion of the investigation, the NCR will advise the Minister of Trade and Industry if there is a need for specific intervention, she says.
Motshegare labelled “undesirable” the following market practices: