South Africa 7.8.2017 04:41 pm

Credit regulator warns of illegal credit providers

Image courtesy Chance Agrella/Freerangestock.com

Image courtesy Chance Agrella/Freerangestock.com

The NCR announced that 11 people had been arrested in a joint operation to curb fraud and illegal retention of Sassa cards.

The National Credit Regulator (NCR) has urged consumers not to enter into loans with credit providers that retain bank cards as a method of debt collection, reports the Mpumalanga News.

“Consumers are warned not to enter into loans with credit providers that use unlawful collection methods, such as the retention of bank and South Africa Social Security Agency (Sassa) cards, as well as the retention of identity documents. Further, consumers are urged to only enter into loans with registered credit providers,” NCR spokesperson Lebogang Selebi said.

The warning comes as the National Consumer Tribunal (NCT) heard the case between the NCR and Hua Xiang Cash Loans CC (Hua Xiang), a registered credit provider operating in Makhado and Malelane.

At the hearing on July 27, the National Credit Regulator argued that Hua Xiang was in contravention of the provisions of the National Credit Act, 34 of 2005, as amended (the Act).

 The National Credit Tribunal made an order whereby the registration of Hua Xiang was cancelled, with immediate effect. The NCT — which is an independent adjudicative entity — found that the nature of the contraventions were so severe and of a serious nature that it warranted the immediate cancellation of the registration of Hua Xiang.

Hua Xiang’s contraventions included failure to conduct proper affordability assessments, failure to provide consumers with pre-agreement statements and quotations.

Other contraventions included failure to furnish consumers with credit agreements in the prescribed form; the charging of an interest rate in excess of the imposed limit; and the use of prohibited collection and enforcement actions.

The National Consumer Tribunal derives its mandate from the National Credit Act and, as such, hears all sides of a case before making a decision. A decision by the Tribunal has the same status as one made by a High Court.

Meanwhile, the NCR will continue to conduct industry-wide investigations on credit providers who use prohibited collection and enforcement methods.

Last week, the NCR announced that 11 people had been arrested in a joint operation to curb fraud and illegal retention of SASSA cards between the NCR, the South African Police Service (SAPS) and SASSA.

The National Consumer Tribunal and the National Credit Regulator — which is responsible for the regulation of the South African credit industry — are entities of the Department of Trade and Industry.

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