Cape Town - Minister of Trade and Industry Rob Davies has recently warned that credit providers must step up their attempts to inform consumers of coming changes to the Credit Act.
This would involve, among other things, the requirement of a credit provider doing an affordability test before granting credit.
READ: Rob Davies warns reckless lenders
In reaction to Fin24's report on Davies' concerns about certain practices in the credit industry, a Fin24 user responds:
I am a debt collector and agree with the new Credit Act to be released soon.
Many debtors lie about their expenditure when applying for a loan. A payslip is a true indication of a person's income, but when it comes to providing their expenditure, only a small percentage provides precise expenditure figure to avoid the credit application not being granted.
When we as debt collectors visit the client for repayment documents and consulting repayment structure, then only their true expenditure figures are given to avoid paying the original instalment and to obtain a reduced instalment.
It is about time that old debt books are no longer sold to another party for collection. Old debt books are being sold to several different companies and on that basis interest and lawyer fees are just calculating all the time as the books change hands over the years. Some debt books are up to 14 years old.
The furniture companies are very much to blame where it comes to old debt books. They collect from the insurance companies on written off accounts and/or write debt off against Sars, but then after a period of time sell these written off accounts to companies to collect on those accounts.
Furniture companies also don't explain the hire-purchase law to consumers. When goods are reposessed, many collectors tell the debtor that the account is now a written-off account or say that they don't owe anything on the account anymore as the goods have been repossessed. The sales person should explain in detail to the client what the HP-law entails, especially when it comes to repossessing the goods.
Furniture companies turn away when there are faulty goods delivered to the customer. They are very keen to sell, but handle customer complaints very poorly in most cases.
The situation is very much 50/50. The consumer does not always provide the correct information and many companies are guilty as well.
The law should also forbid the selling or provision of peoples' mobile telephone numbers and other details to telemarketing companies who keep pestering the public. The public knows who to contact for whatever they need.
Disclaimer: All letters and comments published in MyFin24 have been independently written by members of the Fin24 community. The views are therefore their own and do not necessarily represent those of Fin24.