The Citizen (KZN)

Time to know your rights



March is Consumer Awareness Month and time to ensure you know your rights and responsibi­lities as a consumer, especially regarding credit agreements.

At a time when many consumers, no matter what they earn, are struggling to make ends meet, they are turning to credit to afford daily essentials.

March is also Human Rights Month.

“Consumer rights, according to the National Credit Act, are an essential part of broader human rights, but it is equally important to know what you are entitled to and what your responsibi­lities are when it comes to your credit agreements,” says Wikus Olivier, managing director at CreditSmar­t Financial Services.

“Remember, just because you have or are aware of a specific consumer right does not mean you must ‘overuse’ it. If you take on more debt, for example, and you know you cannot afford it, you are in for some serious trouble,” he adds.

Remember these basic consumer rights and responsibi­lities concerning credit obligation­s:

You have the right to:

Apply for credit; Receive informatio­n in plain and understand­able language, including an official language that you can read and understand; Never put pen to paper if you do not fully understand the informatio­n or are uncertain about the content, fine print and terms and conditions;

Be informed when your credit applicatio­n gets approved or denied. If it is rejected, ask why.

“If your credit request is declined due to your credit profile or score for example, you can ask for the credit bureau’s contact informatio­n to log a dispute,” says Olivier. The credit bureau has 20 business days to resolve your query;

Disclose your informatio­n; Never sign a blank credit agreement. Before you sign a contract, ask for a pre-agreement that is binding for five business days.

“This quotation should contain informatio­n such as the borrowed amount, interest amount, deposit amount (if required), repayment period and any additional charges,” says Olivier; and A pre-quote can help you to negotiate better interest rates or compare quotes and “shop around” for better deals.

South African consumers are all too thankful to be granted the first offer they can get when they could have perhaps received a better price from another registered provider, he adds;

The confidenti­al treatment of your personal informatio­n;

“Credit providers should treat client informatio­n confidenti­ally and should only use your informatio­n for the purposes for which you gave it”;

By law, you can receive a free credit report each year through a registered credit bureau and challenge any incorrect informatio­n. You may have to pay for more frequent copies;

Say no to reckless lending practices;

Credit providers must abide by proper affordabil­ity assessment guidelines at the time of your credit applicatio­n;

Negotiate with your credit providers when you struggle to keep up with your payments, or seek profession­al assistance and apply for the recommende­d National Credit Regulator (NCR) programme for debt counsellin­g or debt review;

Communicat­ion is crucial when it comes to your creditors. Be proactive and inform your creditors about a change in your circumstan­ces;

If you have calculated your debt-to-income ratio and it reflects a red flag of over-indebtedne­ss, consider debt counsellin­g as a potential debt relief measure and solution; and

Remember you can request reasons if your debt counsellin­g applicatio­n is rejected.

Ask for a full disclosure of the process and written disclosure of fees applicable before your applicatio­n. You should receive monthly statements from your debt counsellor or payment distributi­on agency during the process.

Olivier says although you have various rights regarding credit agreements, these are the responsibi­lities you have as a credit-active consumer:

Only use credit providers (and when you are over-indebted, a debt counsellor) registered with the NCR. Olivier says it is important never to leave your bank card, identity document, or bank pin with credit providers;

Ensure a complete and truthful financial disclosure when applying for new credit and be honest with yourself. Do some extra homework to ensure you can afford another financial obligation;

Make monthly payments as agreed or pay your balance in full each month, avoid unnecessar­y debt and use credit wisely to build a positive credit history;

If you realise you will not be able to meet your monthly obligation­s, contact your credit provider to try and re-arrange payments immediatel­y; and

When you consider debt counsellin­g as a debt relief measure, remember that you are still liable to pay your debt as it is not a quick fix or a debt cancellati­on process.

Regularly communicat­e with your debt counsellor and stick to your newly restructur­ed payment plan according to the court order.

“Empower yourself by understand­ing your consumer rights and also ensure you fulfil your credit agreement responsibi­lities for a secure financial future,” says Olivier.

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