To celebrate World Consumer Rights Day on 15 March, the National Debt Mediation Association (NDMA) urges consumers to be aware of their rights when it comes to credit.
“In South Africa we have progressive legislation in the form of the National Credit Act (NCA) which protects credit consumers,” says CEO of the NDMA, Magauta Mphahlele. “But consumers are often not aware that they can demand certain basic rights when it comes to credit.”
The theme for World Consumer Day is “Consumer Justice Now!“ Mphahlele says this is a universal theme that is particularly relevant to South Africa. She further says that “Justice is only possible where consumers are well informed and there are effective institutions and mechanisms through which consumers can access redress”.
World Consumer Rights Day is inspired by the United Nations (UN) Guidelines on Consumer Protection. This is a manifesto that outlines a number of rights for consumers that should be recognised by governments across the globe. Mphahlele says some of the most important rights contained in the UN Guidelines have, in South Africa been recognised and given legal backing in both the National Credit Act and the Consumer Protection Act.
The right to be informed
Under the NCA, it’s 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.
You have to be given a pre-agreement statement and quotation when seeking credit. This will outline the terms and conditions of the proposed agreement and all costs involved such as cost of credit, interest, service fees, initiation fees, credit insurance, deposit required, number of instalments, date of first instalment and last instalment, amongst other information. 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 statements of account and various notices where specific actions are undertaken by the credit provider. You also have the right to choose how you receive these documents, through email, post, fax or any other agreed or prescribed method ”But 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,” says Mphahlele. “If you do not update your details regularly, or sign something you do not understand, you risk compromising your rights.”
The right to choose
It’s your right to compare interest rates and deals across different credit providers. Ask for a quotation which outlines the credit providers’ 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,” says 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 - while some matters do need to be resolved in court, 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 be 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 them. If you skip more than three month’s payment, you may face legal action which leads to more unnecessary costs and fees, so the earlier you tell them, the better. You can also approach an alternative dispute resolution agent, such as the NDMA or Credit Ombud or a debt counsellor 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 1 January 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 like the National Credit Regulator, National Consumer Tribunal, Provincial Consume 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. The NDMA, for example, provides information through workshops, its website, helpline, SMS line and community outreach programmes. Adds Mphahlele: “Empower yourself with knowledge and seek advice so that you can make informed decisions and choices”.
For further assistance please call the NDMA Helpline 086 111 6362 or SMS the word “Rights” to 44238 (R1.50/sms) and a Service Initiation Officer will call you back.
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