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Johannesburg - World Consumer Rights Day on Friday March 15 offers consumers an opportunity to review and understand their rights.
While South Africa has a progressive legislation in the form of the National Credit Act (NCA), consumers are often not aware that they can demand certain basic rights when it comes to credit, says Magauta Mphahlele CEO of the National Debt Mediation Association (NDMA).
Here is what you need to know:
The right to be informed
Under the NCA, it is your right as a consumer to apply for credit and be treated fairly throughout the process.
"During the application process, the credit provider has to ensure that you can afford the loan and you have to give them the correct and truthful information to ensure that they make a proper assessment of your ability to afford the loan," Mphahlele says.
You have to be given a pre-agreement statement and quotation when seeking credit.
Mphahlele explains this will outline the terms and conditions of the proposed agreement and all costs involved. These include cost of credit, interest, service fees, initiation fees, credit insurance, deposit required, number of instalments and date of first and last instalment.
If you are refused credit, you have the right to be provided with reasons and if the reasons relate to an adverse credit bureau report, you have the right to be provided with the details of the bureau and its contact details.
Consumers also have the right to receive copies of required documents in plain language, including contracts, regular account statements and various notices where specific actions are undertaken by the credit provider.
Mphahlele added that consumers also have the right to choose how they receive these documents: through email, post, fax or any other agreed or prescribed method.
"However, 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.
"If they do not update their details regularly, or sign something they do not understand, they risk compromising their rights," Mphahlele says.
The right to choose
Consumers are entitled to compare interest rates and deals across different credit providers. They should also not feel under pressure to sign agreements they don't understand.
Ask for a quotation which outlines the credit provider's terms and rates, and use this to shop around for the best rate between different credit providers.
"Don't feel pressurised into signing an agreement that you don't understand - and make sure you know what your repayments will be each month," cautions Mphahlele.
You also have the choice of deciding how you will repay your loan - through a debit order, or directly by yourself.
You can also choose how you would prefer to resolve disputes with your credit provider. Some matters do need to be resolved in court, but others can easily and cost effectively be resolved through mediation.
The right to be heard
You have the right to lodge a complaint, and for your complaint to be taken seriously and resolved to your satisfaction.
If you find you are battling to make repayments, you have the right to approach your credit provider as soon as possible to try to discuss a way to either restructure the repayments or negotiate a payment holiday.
You have the right to be heard by your credit provider. If you skip more than three months' payment, you may face legal action which will lead to more unnecessary costs and fees, so the earlier you speak up if you have any difficulties, the better.
The NDMA, credit ombud or a debt counsellor can be approached to negotiate on your behalf with credit providers.
The right to redress
In cases of dispute, consumers have the right to access an effective dispute resolution mechanism that is cheap and accessible.
The NDMA provides debt mediation services, including general debt management advice, complaints and debt mediation for consumers and their credit providers free of charge.
Since January 1 2011, the NDMA has dealt with more than 9 000 complaints and enquiries and has handled more than 35 316 incoming calls through its helpline.
Other entities such as the National Credit Regulator, National Consumer Tribunal, provincial consumer affairs offices and ombudsman offices can assist with resolving disputes.
The right to consumer education
As a consumer, you have the right to access educational information that will improve your knowledge about your rights and obligations when dealing with a credit provider or any other supplier of goods and services.
When faced with a dispute, consumers can request debt mediation services. The NDMA provides this service free of charge to both credit providers and consumers.
"Empower yourself with knowledge and seek advice so that you can make informed decisions and choices," Mphahlele says.
While South Africa has a progressive legislation in the form of the National Credit Act (NCA), consumers are often not aware that they can demand certain basic rights when it comes to credit, says Magauta Mphahlele CEO of the National Debt Mediation Association (NDMA).
Here is what you need to know:
The right to be informed
Under the NCA, it is your right as a consumer to apply for credit and be treated fairly throughout the process.
"During the application process, the credit provider has to ensure that you can afford the loan and you have to give them the correct and truthful information to ensure that they make a proper assessment of your ability to afford the loan," Mphahlele says.
You have to be given a pre-agreement statement and quotation when seeking credit.
Mphahlele explains this will outline the terms and conditions of the proposed agreement and all costs involved. These include cost of credit, interest, service fees, initiation fees, credit insurance, deposit required, number of instalments and date of first and last instalment.
If you are refused credit, you have the right to be provided with reasons and if the reasons relate to an adverse credit bureau report, you have the right to be provided with the details of the bureau and its contact details.
Consumers also have the right to receive copies of required documents in plain language, including contracts, regular account statements and various notices where specific actions are undertaken by the credit provider.
Mphahlele added that consumers also have the right to choose how they receive these documents: through email, post, fax or any other agreed or prescribed method.
"However, 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.
"If they do not update their details regularly, or sign something they do not understand, they risk compromising their rights," Mphahlele says.
The right to choose
Consumers are entitled to compare interest rates and deals across different credit providers. They should also not feel under pressure to sign agreements they don't understand.
Ask for a quotation which outlines the credit provider's terms and rates, and use this to shop around for the best rate between different credit providers.
"Don't feel pressurised into signing an agreement that you don't understand - and make sure you know what your repayments will be each month," cautions Mphahlele.
You also have the choice of deciding how you will repay your loan - through a debit order, or directly by yourself.
You can also choose how you would prefer to resolve disputes with your credit provider. Some matters do need to be resolved in court, but others can easily and cost effectively be resolved through mediation.
The right to be heard
You have the right to lodge a complaint, and for your complaint to be taken seriously and resolved to your satisfaction.
If you find you are battling to make repayments, you have the right to approach your credit provider as soon as possible to try to discuss a way to either restructure the repayments or negotiate a payment holiday.
You have the right to be heard by your credit provider. If you skip more than three months' payment, you may face legal action which will lead to more unnecessary costs and fees, so the earlier you speak up if you have any difficulties, the better.
The NDMA, credit ombud or a debt counsellor can be approached to negotiate on your behalf with credit providers.
The right to redress
In cases of dispute, consumers have the right to access an effective dispute resolution mechanism that is cheap and accessible.
The NDMA provides debt mediation services, including general debt management advice, complaints and debt mediation for consumers and their credit providers free of charge.
Since January 1 2011, the NDMA has dealt with more than 9 000 complaints and enquiries and has handled more than 35 316 incoming calls through its helpline.
Other entities such as the National Credit Regulator, National Consumer Tribunal, provincial consumer affairs offices and ombudsman offices can assist with resolving disputes.
The right to consumer education
As a consumer, you have the right to access educational information that will improve your knowledge about your rights and obligations when dealing with a credit provider or any other supplier of goods and services.
When faced with a dispute, consumers can request debt mediation services. The NDMA provides this service free of charge to both credit providers and consumers.
"Empower yourself with knowledge and seek advice so that you can make informed decisions and choices," Mphahlele says.
