Ditch the debt, urges ENSafrica

Kim Eichorn, an associate at ENSafrica, writes:

For those who cannot avoid buying items on credit, it is important that they protect themselves from reckless credit and or credit providers.

All credit providers are required to register with the National Credit Regulator, but this does not mean that all credit providers are in fact registered.

Obtaining credit from a registered credit provider will assist in protecting consumers from lenders who do not follow the protective measures contained in the National Credit Act. The best way to avoid exploitation is for consumers to know their rights.

When applying for credit, it is of utmost importance that a consumer is entirely honest about their financial commitments and expenses. This assists the credit provider to conduct a realistic assessment of the amount of debt a consumer can afford. If the credit provider limits the amount of credit as a result of accurate information, this will ultimately protect the consumer from debt they cannot afford.

Once a consumer has approached a credit provider, he/she has the right to:

• An understandable credit agreement.
• A quote/pre-agreement statement that is binding for five days, allowing for the consumer to approach other credit providers and see which one offers the best interest rate and repayment terms, and the least charges.
• An explanation on the cost of the credit.
• Feedback or reasons why a credit application was unsuccessful (if applicable).

Credit providers are not entitled to:

• Keep a consumer’s ID book or passport.
• Keep a consumer’s bank card or to ask a consumer to provide his/her pin number.
• Go with a consumer to the ATM on, or just after, payday to draw money to make a repayment.

A consumer must read through the pre-agreement terms and conditions and decide whether he or she can afford the repayments and to be aware of his or her obligations before signing the actual credit agreement.

Consumers must also check if any additional fees are payable in addition to the interest. If there is anything in the pre-agreement that a consumer does not understand, he or she should ask the credit provider to explain this in a language that the consumer understands.

Consumers based in Alexandra who need help in understanding the terms and conditions outlined in pre-agreements may bring these to our offices for an explanation.

For free legal services to the people of Alexandra, contact ENSafrica at 011 555 0980 or visit our office at Sankopano Centre.

Read: Check your credit report

Are you also caught up in a debt trap? Share your plans for recovery with other readers on the WhatsApp group on 079 439 5345.