National Credit Act Incidental Credit Agreement

[17] Section 4(1) of the ANCA applies to any credit contract between parties who rely on long-term weapons. Section 4, paragraph 2, points b) and (iv) of this notification refers to agreements for which the parties do not act on the road: the law pursues the ambitious and extremely difficult objective of promoting a credit sector and a competitive, efficient and efficient market that is fair, transparent, accountable and accessible. The main theme of the law is consumer protection. Section 3 of the Act contains a number of methods used by law to achieve this objective. In certain circumstances, consumers may terminate contracts (in writing and duly provided) within five business days of signing. This cooling fee applies only to leases and temperance contracts in a location other than the lender`s registered premises. As a general rule, this right applies to increments (such as cars, books, household appliances) made at the consumer`s home or workplace. The consumer must return the purchased goods and the credit provider must repay the amounts paid by the consumer within seven days of termination, less: (d) at the time of the agreement, the credit provider has not been registered and this law requires that credit provider be registered. Credit agencies, credit bureaus and debtor advisors must register with the NCR.

Before entering into a credit contract (R-zero threshold), a credit provider must register with the NCR. This is serious. Many of these provisions are intended to penalize credit providers. Credit providers will be very careful to reduce the risk of non-performing loans. These provisions should therefore reduce over-indebtedness and reckless lending, at least in the formal sector. However, a negative result for consumers may be that lender loans will be much more reluctant in the future and, as a result, fewer people will have access to credit. In addition, this could lead to an increase in the number of unregistered and illegal credit providers. A credit contract can only be declared unwise if it is established that the consumer is over-indebted. If the debtor finds that the consumer is not over-indebted and feels that one or more credit contracts are reckless, these agreements should not be declared unwise.

As a result, credit providers may continue to impose credit contracts that are in fact reckless but not formally declared unwise. [16] The limine point raises, among other things, the question of whether the relationship between the applicant and the respondent was a mutually symbiotic relationship with the benefit of both parties or whether it was a party who benefited from the relationship by paying an unfair advantage. Was there a family relationship between the parties or was the agreement an arm length transaction? During this transaction, a consumer is not entitled to his credit card (z.B his credit card); nor can he enter into any other credit contract. A credit provider who enters into a credit contract with a consumer while the consumer is in the process of controlling the debt risks making the credit contract a reckless credit. The National Credit Act is a complex and time-consuming law that attempts to regulate precisely every consumer credit sector. The final provisions of the Act will come into force on June 1, 2007. The Act repealed the Usury Act[2] and the Credit Agreements Act[3] and bears little resemblance to these statutes. It`s a clear break with the past. All consumer credit law is included in the law applicable to all credit contracts and credit providers. All credit providers or suppliers operating in South Africa should be fully aware of the impact of NCA on transactions in which they authorize any form of deferral, fee or fee.