17 October 2007
The National Credit Regulator (NCR) has spent the last four months conducting an intensive outreach campaign to educate consumers, lenders and court officials about the new National Credit Act, members of Parliament have heard.
The Act, which came into effect on 1 June this year, protects consumers from undue risk and creates a fair and non-discriminatory lending market by prohibiting reckless credit extension and providing for debt reorganisation in cases of over-indebtedness.
It also outlaws the practice of job applicants being turned down from prospective offers due to their poor credit histories.
NCR chief executive Gabriel Davel told members of Parliament that the regulator had, since the Act came into effect, focussed on incremental awareness on the general content of the act, promoted cautionary messages in relation to over-indebtedness and informed citizens about their rights in respect of credit bureau information.
He said that to date, the NCR had hosted 128 consumer education workshops, 32 workshops and presentations to industry and had placed 37 educational advertisements, while there were 185 articles on the act in the print media, 170 inserts on radio and 25 television interviews relating to the Act.
Davel added that the new Act was a radical departure from previous legislation and would put huge demands on magistrates, who deal with approximately 65 000 debt-related judgements per month.
Accordingly, the Justice College has developed a training manual and implemented a training programme to get magistrates acquainted with interpreting and applying the Act. More than 700 magistrates would have undergone training by the end of the year.
“There was a huge effort in preparing for the implementation of debt counselling, and it remains the biggest challenge of the institution,” Davel said, adding that various initiatives had been undertaken to make debt counselling a reality.
The effective implementation of debt counselling, he said, depended on the good will and cooperation of a number of stakeholders, including credit providers, credit bureaus and magistrate courts.
Davel also pointed out to some of the key findings of research conducted by the NCR into the growth in credit extension:
- Household credit provided by banks increased by R391-billion over 4 years, representing a 135% growth;
- The bulk of this growth was mortgages, which grew by R270-billion over the period.
- Credit cards also grew considerably, and although amounts remain relatively small, they are an important contributor to debt stress; and
- Consumer credit extension grew faster than household consumption and the country’s gross domestic product (GDP) growth.
The National Credit Act requires credit bureaus to remove information on a number of small debts (below R500) and paid up judgments.
All credit bureaus must also be registered with the National Credit Regulator and will have to follow the steps clearly laid out by the Act, which sets out how consumer information can be used.
Consumers can request their credit records from the credit bureaus once a year at no charge, thereafter at a fee not more than R20 per record.
To verify that the information held by a credit bureau is correct, members of the public may enquire at the credit bureau and present their Identity Documents and address.
To complain for non-compliance by the credit bureau, consumers can contact the Credit Information Ombudsman at 0861 622 837. Further to this, complaints can be lodged with the National Credit Regulator at 0860 627 627.