Reckless Credit Granting

Reckless Credit Granting

Signs of reckless credit granting that you should look out for are
  • Contraventions of the National Credit Act, such as unlawful garnishing or Emolument Attachment Orders (EAO)
  • Credit provider retains your pension card, bank card, ID document or PIN as surety
  • Excessive interest charges
  • No pre-agreement statements or quotations provided
  • Unlawful provisions in credit agreements. You should only pay for what you get so if anything feels unfair to you, it’s best to consult one of our debt counsellors.
  • Ensure that you are not paying more by purchasing a product or service on credit than you would if you were using a debit card or cash
  • While you are under debt review, a trustworthy credit provider will grant you a consolidation loan to help you repay your debts – beware of credit providers who grant you credit for other purposes
Steps taken to curb reckless credit granting by the National Credit Regulator
  • Clamped down on lenders by charging them with hefty fines, sentencing them to prison or confiscating their licences
  • Joined forces with the South African Police Service to conduct on-site investigations at lending institutions across South Africa
  • In November 2013, 76 South African lenders arrested under suspicion of reckless credit granting and 64 criminal cases opened
  • The National Credit Regulator have been put in power over alternative resolution dispute agents to help tackle reckless lending
Crippling negative effects of reckless credit granting
  • Destabilises the unsecured credit market causing more consumers to become over-indebted
  • Causes significant problems in collections space, making collections difficult for honest lenders who don’t employ underhanded tactics
  • Illegal activities of a few dishonest lenders damages the reputation of entire unsecured credit industry
  • If you applied for a debt re-arrangement and a credit provider enters into a credit agreement with you, it will impact any credit provider who offers you a consolidation loan when you are struggling to make repayments