Johannesburg - South African consumers - and lenders - now have a Consumer Tribunal to turn to for help with credit issues.
Following the introduction of the National Credit Act on June 1 - which replaced the Usury and Credit Agreement Acts and aims for equity in the credit market - the country now has a National Consumer Tribunal which will decide on applications and allegations of prohibited practice made in terms of the act.
Not to be confused with the National Credit Regulator (NCR), the 16-member tribunal (one of which is a full-time member) was created in October 2006 but only started operations on August 28, 2007 - the day on which the rules for the conduct of matters before it were published in the government gazette.
The tribunal - which is based in Centurion, Gauteng - will hear cases on conduct that has been outlawed by the act, and can also review decisions made by the NCR. Applications can be brought and matters can be referred to the tribunal by consumers, registrants (credit providers, credit bureaux and debt counsellors), consumer courts, courts, and the NCR.
The regulator - and in certain instances complainants - may refer cases of alleged prohibited conduct to the tribunal for a determination.
'Help people make informed decisions'
"Part of the tribunal's role is to establish a basis to get people in a position to make informed decisions," said tribunal chairperson Diane Terblanche, an attorney and founder of the Consumer Institute of SA, who is also the deputy chairperson of the Advertising Standards Authority of SA.
The tribunal has, however, only been allocated a budget of R7,3m by the National Treasury, which is insufficient to enable it to embark on a nationwide marketing campaign to raise awareness.
Terblanche acknowledged that for the tribunal to be accessible it would require "significant resources", saying that to get around this, the tribunal is engaging with the regulator - which has funding for consumer education - and that it has an "open invitation" from the NCR for it to take part in roadshows.
Also, hearings will be open to the public, with the tribunal planning to keep people up-to-speed by informing them of upcoming hearings via its website, thenct.org.za. Members of the public are also invited to participate in the hearings: "If the consumer feels that the issue affects them, they are allowed to make an application to intervene. By doing this, we can resolve a number of matters once-off."
Where to go
With several options now open to consumers and the credit industry, consumers may be bewildered or intimidated by the choice.
The tribunal's full-time member, Magauta Mphahlele, says that consumers and credit providers should first try resolving dispute between themselves. Should this not work, the next step is alternative dispute resolution (ADR). Dispute resolution agents are not accredited by the tribunal, but they could try the Legal Aid Board, law clinics or non-governmental organisations. The ADR process may result in a consent order that can be confirmed by either a court or the tribunal.
If the credit provider the consumer has an issue with is a financial institution as defined in the Financial Advisory and Intermediary Services Act, consumers could go to the relevant ombudsman.
The tribunal and the courts are next in line. The courts deal with matters like debt enforcement through repossessions or judgement; declaring credit agreements to be reckless and suspending those that are; re-arranging consumers' obligations under credit agreements; and authorising searches and seizures.
The tribunal, on the other hand, can:
- Grant interim relief - where, for example, a consumer has paid off their debt but a credit provider is in the process of repossessing their house. In this case, the consumer would lodge a complaint with the NCR and then come to the tribunal for relief, which would be done with urgency;
- Declare conduct to be prohibited;
- Issue an interdict for prohibited conduct;
- Impose administrative fines. This can be hefty, amounting to either 10% of turnover or R1m, whichever is greater;
- Confirm consent orders;
- Condone non-compliance with its rules and procedures;
- Confirm an order against an unregistered person to cease engaging in any activity that registration with the regulator; and
- Cancel or suspend a registrant's registration.
The tribunal's orders may be served or executed and enforced as if they are the orders of the high court.
Fin24 will run a further article to explain the tribunal's application process.
- Fin24