Consumers to be educated on their rights

“This is part of our education and awareness drive; we empower consumers with information that will enable them to make informed financial decisions," said NCR Senior Manager for Education and Strategy, Peter Setou. “We believe that an informed consumer is a protected consumer.”

The announcement is part of the celebrations of the World Consumer Rights Day which is celebrated annually on 15 March.

The day is celebrated by promoting the basic rights of all consumers and for demanding that those rights be protected.

During this period, he said the NCR would intensify its education campaign to reach more consumers, in a bid to better protect them against unscrupulous lenders and promote fair lending practices.

Does anyone know their Consumer Rights?

“The majority of South Africans across race, class and gender are increasingly dependent on loans and other forms of credit for various reasons like the establishment and/or expansion of small businesses, housing, education and general consumption,” he said.

Lack of awareness on rights and obligations, he said made consumers vulnerable to unfair lending practices which may result in consumers being caught in debt trap.

A report conducted in 2003 by the Department of Trade and Industry echoes the same sentiments.

Titled the “Consumer and Corporate Regulation Division: National Consumer Survey”, the results of the research show that South African consumers do not have a clear idea of what their consumer rights are.

A large number of respondents said they would like more information about all aspects of consumer rights.

Terms of the NCA

The National Credit Act (NCA), which became effective from 1 June 2007, was set to make it easier for consumers to make responsible financial decisions and choices, and promotes disclosure on the part of consumers when applying for credit.

Consumer rights as provided for in the Act indicate that when entering into a credit agreement, a consumer has the right to receive documentation regarding that agreement.

“A credit provider must provide you with a pre-agreement statement and quotation before you can sign the credit agreement.

“This must disclose the amount borrowed, deposit to be paid [if any], number of instalments, interest payable, any additional charges, credit life insurance, date of first instalment and the date of last payment,” the Act reads.

The Act advises consumers to always make sure that they get a pre-agreement statement and quotation.

“You have the right to receive information and documents in plain language,” it says.

This means that the contents, meaning and importance of the document must be easy to understand and consumers are advised not to sign unless they understand the terms and conditions of the agreement.

With regards to credit information, consumers have the right to be informed about what the credit provider intends to report on the consumer to a credit bureau.

The consumer has the right to know before the credit provider actually reports a consumer to challenge information kept by credit bureaux if they are unhappy with the information.

For consumers who experience problems with servicing their debts, the Act allows them to contact their credit provider to discuss their situation and negotiate an affordable repayment plan.

A need for consumers countrywide to educate themselves more on their rights is a necessity to prevent them from unfair lending practices.

The implementation of the Act has marked a milestone towards effective regulation of the credit market and consumer protection.

Article published courtesy of BuaNews