Credit agreements in South Africa

Credit agreements in South Africa are agreements or contracts in South Africa in terms of which payment or repayment by one party (the debtor) to another (the creditor) is deferred. This entry discusses the core elements of credit agreements as defined in the National Credit Act, and the consequences of concluding a credit agreement in South Africa.

Definitions of types of credit transactions

It is essential that the meanings of important terms used in the practice of consumer law are clearly understood. Most of the definitions below are obtained from the National Credit Act 34 of 2005 (“the Act”).

Agreement

An “agreement” simply means a contract.

Credit

“Credit” means a deferral or delay of payment of a sum of money to another person, or a promise to pay money.

The critical role of credit in the economy is explained in the August 2004 policy framework of the Department of Trade and Industry:

Credit enables people to have use of a product or service, at a cost represented by an interest rate, prior to their having paid for that product or service or, where an item cannot be afforded from a single month’s salary, to spread payments over a number of months.

This document goes on to describe credit as a “double-edged sword,” because of the “considerable imbalance of power between consumers and credit providers,” due to poor consumer education levels and knowledge of consumer rights, and inability to enforce such rights through negotiation or legal action:

Credit cannot therefore be seen as a universal basic service to which access should be extended in the same way as access to water, health care and electricity. There is a greater need to balance access to credit with protection for consumers, especially the vulnerable.

Credit provider

A credit provider is the party who supplies goods or services (in terms of an instalment sale agreement, for example), or who pays money (in terms, for example, of a secured or unsecured money loan, overdraft facility, pawn transaction or mortgage loan). The credit provider is often also referred to as “the creditor,” in particular when steps are taken to recover amounts due from the consumer.

Consumer

A consumer is the party to whom goods or services are sold, or to whom money is loaned in any of the examples referred to above. When steps are taken to recover amounts due, the consumer is often referred to as “the debtor.”

Credit agreement

An agreement is a credit agreement if it provides for a deferral or delay of payment, and if there is a fee or interest charged for the deferred payment. The Act does not require that a credit agreement be in writing and signed by both parties, although this is implied throughout the Act. A credit agreement may be a credit facility, a credit transaction or a credit guarantee (or a combination of these). These three terms are defined in section 8 of the Act.

Credit facility

A credit facility is an agreement in terms of which a credit provider supplies goods or services, or pays an amount to the consumer. The consumer’s obligation to pay the price or repay the money is deferred, in exchange for which the consumer pays interest and fees. Examples of a credit facility are credit advanced

• on an overdrawn cheque account in terms of an overdraft facility; or
• on a credit card account.

Credit transaction

A “credit transaction” may refer any one of a number of different types of transactions. Most important for present purposes are the follow

Instalment agreements

In terms of instalment agreements, movable goods (like furniture, clothing or a car) are sold, the price is paid in instalments, and the item is delivered to the consumer. The consumer becomes owner only once all instalments have been paid.

Unsecured money loans

Unsecured money loans are usually smaller money loans (micro-loans) re-payable in instalments, where the lender is given no security for re-payment of the debt.

Pawn transactions

In terms of pawn transactions, money is lent and the borrower provides an item of property as security, the resale value of which is greater than the loan. The creditor is entitled to sell the property if the money is not repaid by an agreed date, and to keep the proceeds of the sale.

Mortgage agreements

Mortgage agreements are money loans secured by the registration of a mortgage bond over land, the proceeds of which are usually used to buy land or housing.

Secured loans

In terms of secured loans, money is paid, and the credit provider receives a pledge of any movable property or something else of value as security for repayment of the loan.

Leases of movable goods

Leases of movable goods—that is, not land or housing—would include, for example, a telefax machine or a motor car, with rent being paid in instalments, together with fees and interest. (If interest and fees are not charged, it will not be a credit transaction in terms of the Act). The total instalments will usually amount to the value of the item let. Once all instalments are paid, ownership passes to the consumer. This is contrary to the common law of lease. If, however, the agreement provides that ownership will always remain with the lessor, it will still be a credit transaction in terms of the Act.

Credit guarantees

In terms of a credit guarantee, a third party agrees to pay to a creditor the amount due by a consumer, on demand (as, for example, in the case of suretyship, in terms of which personal security is provided for the debt of another person resulting from an overdrawn cheque account).

Incidental credit agreements

Incidental credit agreements occur when goods or services are provided to a consumer over a period of time and a fee or interest is charged only if payment is not made by an agreed date. Examples include

• accounts for municipal services, such as water or electricity; and
• sales of clothing where no interest is charged provided that the account is paid by a certain date.

Incidental credit agreements do not fall under the definition of credit agreements in the Act. Section 5 sets out the limited provisions of the Act applicable to them.

A number of other agreements are not regarded as credit agreements by the Act, including

• transactions between a stokvel (a voluntary association involving a rotating financial scheme with entertainment, social or economic functions) and its members;
• an insurance policy; and
• a lease of immovable property.

National Credit Act

The National Credit Act is a complicated and lengthy piece of legislation that tries to regulate closely every sector of the consumer credit market. The last provisions of the Act became effective on June 1, 2007. The Act repealed the Usury Act and the Credit Agreements Act, and bears very little resemblance to these Acts. It represents a clean break from the past. All consumer credit law is contained within the Act, which applies to all credit agreements and all credit providers.

The Act has the ambitious and extremely difficult objective of promoting a competitive, efficient and effective credit industry and market which is at the same time fair, transparent, responsible and accessible. The overriding theme of the Act is consumer protection. Section 3 of the Act sets out a number of methods that the Act adopts to achieve this.

Important consumer credit institutions

National Credit Regulator

Much of the responsibility for implementing the purposes of the Act lies with the National Credit Regulator (NCR), which oversees the entire consumer credit industry, including all the functions and responsibilities of the former Micro-finance Regulatory Council (in the micro-lending context). The NCR is an independent organisation governed by a Board, with a Chief Executive Officer who may appoint inspectors and investigators.

The NCR has an enormous number of responsibilities. These are set out in great detail in sections 13 to 18 of the Act. It remains to be seen whether or not it will have the necessary capacity to perform all these functions. Its responsibilities include

• the promotion and development of a credit market accessible to all;
• monitoring and reporting annually certain market trends to the Minister;
• conducting research and proposing policies to the Minister regarding the consumer credit industry;
• regulating the industry by registering credit providers, credit bureaux and debt counsellors, and suspending or cancelling registration;
• enforcing the Act in numerous ways listed in section 15;
• promoting public awareness of consumer credit matters in various ways listed in section 16 (consumer education);
• engaging with provincial regulatory authorities;
• advising the Minister; and
• recommending and reporting to the Minister on various aspects of consumer credit practice, policy and legislation.

National Consumer Tribunal

The National Consumer Tribunal is an independent body, separate from the NCR. It has jurisdiction throughout South Africa, and comprises a chairperson and at least ten other members appointed by the President. A tribunal of record, it conducts its proceedings in public in an informal, inquisitorial manner. It applies principles of natural justice, and has the function of ruling on any matter brought before it in terms of the Act. The Act provides rules of practice, procedure, evidence and a list of possible orders in relation to the Tribunal.

The powers of the Tribunal are mentioned throughout the Act, the most important of which are

• to hear cases of alleged contraventions of the Act, mostly by credit providers;
• to impose fines;
• to make orders reflecting resolutions agreed in other fora; and
• to function as an appeal body. (Decisions of the NCR, for example, may be taken on appeal to the Tribunal.)

Registers

The NCR is required to establish and maintain two important registers:

1. a register of certain persons; and
2. a national register of credit agreements.

Register of certain persons

Credit providers, credit bureaux and debt counsellors are required to register with the NCR. Once a credit provider

• provides at least 100 credit agreements; or
• has an outstanding book debt (total principal debt owed) of over R500,000,

it has to register with the NCR.

There will therefore be many credit providers (micro-lenders in particular) that will not be required to register. (The position of unregistered credit providers is discussed below.) The NCR has the power to suspend or cancel registration in certain circumstances.

Any person may access this register on the NCR website or may obtain a copy of an extract from the register on payment of a fee. Any person may also obtain a copy of a registration certificate on payment of a fee.

Credit providers and credit bureaux were required to register with the NCR by July 28, 2006. Debt counsellors may register at any time.

National register of credit agreements

The NCR may be required by the Minister to establish a single national register of outstanding credit agreements, but it has not done so yet. Once established, credit providers will have to submit the following information in relation to every credit agreement:

• names and addresses of the credit provider and the consumer;
• the registration number of the credit provider;
• the identity number of the consumer;
• the principal debt under a credit agreement;
• the credit limit under a credit facility; and
• the amount and schedule of the monthly instalments payable.

Certain information regarding credit agreements entered into prior to the coming into effect of the Act must also be provided. This register will be accessible to any person on application in the prescribed form. It will also provide a way of monitoring South Africa’s consumer debt levels, which the NCR is required to do.

Credit bureaux

A credit bureau is an entity that is engaged for payment in the business of receiving reports or investigating credit applications and agreements, payment history or patterns, and other consumer credit information. Credit bureaux are also in the business of compiling and maintaining data and issuing reports concerning consumers based on this data. As indicated above, credit bureaux were required to register with the NCR by July 28, 2006. Credit bureaux assist credit providers with information that could prevent over-indebtedness of consumers and the granting of reckless credit.

Debt counsellors

Debt counsellors are not defined in the Act. The NCR’s “Debt Counsellor Training Program Learners’ Guide” describes the debt counsellor as “a registrant who is required to do certain tasks stipulated in the Act—including facilitating, investigating, and recommending solutions for over-indebtedness.”

Debt counsellors have a number of functions which appear throughout the Act. The main role of debt counsellors is to evaluate consumers’ indebtedness (upon referral of the consumer by a court, or upon application by the consumer directly to the debt counsellor). The debt counsellor may then recommend to the court

• that the consumer is over-indebted;
• that one or more credit agreements are reckless (and should be set aside or suspended); and
• that the consumer’s debts be re-structured.

This procedure is explained in more detail below.

Debt counsellors must apply to the NCR to be registered as such. The Act contains a lengthy list of reasons for disqualification as a debt counsellor. In addition, the Regulations provide that debt counsellors must

• have a Grade-12 or equivalent qualification;
• complete an NCR-approved debt counselling course;
• have a minimum of 2 years’ working experience in certain fields; and
• show an ability to manage their own finances, and to provide counselling or transfer skills.

Consumer courts

Consumer courts are tribunals established by provincial legislation. The Act allows these courts to be used in various circumstances. There is only one instance where these courts operate at the same level as the National Consumer Tribunal, which is when the NCR refers a complaint to it. Most provinces have introduced their own legislation, but only Gauteng presently has a properly-functioning consumer court.

Ombuds

The Act uses the gender-neutral term “ombud” (often known as ombudsman). The Act provides that certain disputes between a financial institution (like a bank) and a consumer, arising from a credit agreement, may be referred to the relevant ombud. The ombud will then act as mediator between the institution and the consumer with a complaint.

Conclusion of credit agreements

Pre-agreement disclosure

Before concluding a credit agreement, the credit provider must give to the consumer, free of charge, a statement and quotation in the form prescribed by the Regulations (Form 20 to the Regulations, in the case of small credit agreements). No agreement is entered into at this stage; the consumer does not have to sign anything or pay any fee. This is a new development in the law, designed to protect consumers. This document must contain the financial details of the proposed agreement (like the amount of credit provided, the number and amount of instalments payable, interest and other fees, deposit required and credit insurance). Consumers must accept or reject the quotation within five days, giving them a chance to shop around for better or cheaper credit. Once the consumer has accepted the quotation, the credit agreement itself can then be concluded.

Form and contents of credit agreements

The form of the document that records the credit agreement is prescribed by regulation, and varies for different-size credit agreements. The details required for a small credit agreement (a principal debt of less than R15 000) are set out in Form 20.2 to the Regulations. This is not really a form, but rather a framework for the minimum contents of the agreement. These details include

• the parties’ personal particulars;
• the financial details of the agreement (similar to those required for the pre-agreement disclosure above); and
• certain of the consumer’s statutory rights and duties (discussed below).

The credit provider must give to the consumer, free of charge, a copy of the signed credit agreement (in paper form or printable electronic form).

Credit agreements may be altered only in very specific circumstances, most importantly in relation to the reduction or increase in credit limits.

Rights and duties of consumers and credit providers

Many consumer rights are contained in the Act, but very few rights for credit providers. (By contrast, credit providers have many duties.) The Act is biased towards consumers, because it seeks to redress imbalances inherent in our common law. This is not unusual for legislation of this kind.

Right to apply for credit and non-discrimination

Every adult person has the right to apply for credit, but no-one has the right to be granted credit. A credit grantor may choose to refuse credit for reasonable business reasons, but may not unfairly discriminate against a consumer relative to other consumers on the grounds of race, religion, pregnancy, marital status, ethnic or social origin, gender, sexual orientation, age, disability, culture, language, etc. A consumer may ask for reasons for the refusal of credit, which must be given by the credit provider in writing.

Right to understandable language

The consumer has the right to be given a quotation and credit agreement in an official language that he reads or understands, to the extent that this is reasonable. Any documents where no form is prescribed must be in plain language (language which an ordinary consumer with average literacy skills and minimal credit experience will understand).

Rights regarding information held by credit bureaux

Credit bureaux have an important role. For example, they provide credit providers with information on the creditworthiness of consumers. This information could, of course, be damaging to consumers. Credit bureaux are therefore obliged to check with other sources that the information given to them by credit providers is correct. Consumers have the right to have information relating to rescinded judgments expunged (removed) from the records of credit bureaux. Likewise, a consumer who has satisfied all his obligations in terms of a debt rearrangement has the right to have the fact that a debt rearrangement previously existed removed from these records.

A credit provider must advise a debtor before reporting unfavourable information to a credit bureau. Any person may challenge the accuracy of any information reported to or held by a credit bureau. The credit bureau or NCR is then obliged to investigate at no charge and rectify any incorrect information.

The regulations prescribe maximum periods of time that different categories of consumer credit information may be retained by credit bureaux. For example, civil judgments may be retained for the earliest of

• five years;
• until date of rescission by a court; or
• abandonment by credit provider.

Anyone has the right to a free credit bureau report once per year. After that it will cost R20 per enquiry. Two important credit bureaux, with contact numbers, are: • ITC — 086 148 2482 (Website: www.mycredit.co.za). • Experian — 086 110 5665 (Website: www.creditexpert.co.za)

Protection against marketing practices

The Act contains a number of rules in this regard:

• The advertising and marketing of credit must contain prescribed information on the cost of credit (interest and all other charges).
• Negative-option marketing (in terms of which an agreement will automatically come into existence unless the consumer declines an offer) is not permitted.
• Advertisements must not be misleading, fraudulent or deceptive.
• Credit providers may not harass anyone, or try to coerce or persuade anyone to apply for credit.
• Credit sales at a person’s home are strictly prohibited, unless
  • the sale of credit occurs during a pre-arranged visit for that purpose by the consumer; or
  • the provision of credit is incidental to the sale of goods or services.
• A credit provider may require that a consumer have credit life insurance during the existence of a credit agreement, but has a duty to ensure that suitable options for insurance cover are offered to the consumer.

Right to confidentiality and privacy

Credit bureaux are required to protect the confidentiality of consumer credit information that they hold or report on. Credit providers must also present to consumers the options of being excluded from telemarketing campaigns, marketing or customer lists sold or distributed and mass distribution of e-mail or SMS messages.

Right of cooling-off

In certain circumstances, consumers may terminate agreements (in writing and properly delivered) within five business days of signing them. This cooling-off right applies only to leases and instalment agreements that are concluded at a location other than the registered business premises of the credit provider. Typically, this right will apply to credit sales on instalments (as in the cases of cars, books, household appliances) concluded at the consumer’s home or place of work. The consumer must return the goods bought, and the credit provider must refund amounts paid by the consumer within seven days of termination, less the following:

• reasonable costs of return and repair of damages after sale;
• rent for use of the goods, unless they are still in their original packaging; and
• compensation for depreciation in value of the goods (by agreement or court order only).

Early settlement and repayments

Consumers are entitled to settle their debts in advance at any time, with or without advance notice, after requesting a statement from the credit provider of the amount required to settle the account. No settlement charge is payable for small agreements; interest and other fees are payable only until date of settlement. This means that a consumer may request from the credit provider the balance due, pay the entire amount, and not be penalised for doing so.

This, however, does not apply to large agreements such as mortgage bonds. If a consumer wishes to settle a bond he must first give notice of cancellation for a period of three months to the credit provider. When a mortgage bond is cancelled, the consumer will be liable for bond cancellation costs.

Consumers may prepay any amount due under a credit agreement (e.g. instalments due) and credit providers are obliged to accept such amounts, even if they are not due. Such payments are used for unpaid interest and fees first, and then to reduce the principal debt.

Surrender of goods

A consumer may, at any time, return to a credit provider goods that are subject to a credit agreement, whether or not the consumer is in default. The credit provider must then sell the goods and use the proceeds to settle the account. In terms of the former Credit Agreements Act, this procedure applied only when the consumer was in default. This new provision gives the consumer an extraordinary right, enabling him to rid himself of the agreement when he chooses to.

The following procedure must be followed if the consumer elects to enforce this right:

1. The consumer must notify the credit provider in writing of the termination of the agreement, and return the goods to the credit provider.
2. If the credit provider is already in possession of the goods, the consumer may require the credit provider to sell the goods.
3. The credit provider must notify the consumer within ten days of the estimated value of the goods.
4. Once the consumer receives this notice of estimated value, he may withdraw his notice of termination within ten days, and resume possession of the goods, unless he is in default under the agreement.
5. If the consumer does not respond to the credit provider’s notice of estimated value within ten days, the credit provider must sell the goods as soon as possible for the best price possible.
6. After the goods have been sold, the credit provider must credit or debit the consumer’s account with the proceeds of the sale, less the reasonable costs of the sale.
7. The credit provider must give to the consumer a notice indicating the settlement amount before the sale, the amount realised by the sale, and the net proceeds of the sale (after deduction of default charges and the costs of the sale).
8. If the result of the sale is a credit balance on the account, this amount must be repaid to the consumer. If there is a debit balance, the credit provider may demand and, if necessary, sue the consumer for the outstanding balance.
9. If the consumer is not satisfied that the goods were sold as soon as possible or for the best price possible, he may attempt to resolve the dispute with the credit provider, or through alternative-dispute methods, or through referral to the National Consumer Tribunal. The Tribunal may award the consumer an additional amount if this is deemed necessary.

Statements of account

The Act contains detailed provisions regarding statements of account. The Regulations prescribe the form and content of statements in the case of small agreements. Credit providers must deliver to consumers periodic statements of account, usually once a month (but once every two months for instalment sale agreements).

Credit providers are also obliged to provide consumers with statements of account on request, at no charge. The consumer may choose how the statement must be delivered:

• orally (in person, or by telephone); or
• in writing (in person, by SMS, by mail, by fax or by email—provided that the credit provider has these facilities).

Credit providers need not give written statements on demand more than once every three months.

Right to apply for debt review and re-structuring of debt

These provisions are explained in detail below.

Duty to report location of goods

In the case of certain credit agreements (typically instalment agreements), the consumer becomes the owner only once the full purchase price has been paid, and the credit provider has a right to repossession on breach of the agreement. Until then, the credit provider has an interest in the whereabouts of the goods.

The consumer has a duty to inform the credit provider of any of the following changes:

• changes of business or residential address;
• changes of the premises where the goods are kept; and
• changes of the name and address of any other person who has possession of the goods.

The consumer must also give to the credit provider or sheriff, on request, the address where the goods are kept, and the name and address of the landlord of the premises.

Rights of credit providers

The credit provider’s most important rights are

• the right to enforce the agreement;
• the right to receive payment of the credit extended, together with agreed interest and fees; and,
• upon breach of contract, the right to cancel the agreement and recover any goods sold.

A credit provider may suspend a credit facility (like a credit card or cheque account) at any time if the consumer is in default, or otherwise close the facility on ten business days’ notice.

A credit provider who has incurred costs in the attachment of goods while enforcing a debt may ask a court to order the consumer to pay the costs of attachment. The court will make such an order only if the consumer provided false information about his address or the location of the goods.

Duties of credit providers

Every consumer right entails a duty on the part of credit providers. The duties on credit providers are onerous; they provide many administrative burdens. Some of the credit provider’s more important duties are

• to register as a credit provider once it has 100 credit agreements or a book debt of R500,000;
• to make a credit assessment of the consumer;
• to give to the consumer a pre-agreement statement and quotation;
• to give to the consumer a copy of the agreement;
• to give to the consumer periodic statements of account, and further statements on request;
• to protect the confidentiality of information about consumers;
• to report to the NCR, or to a credit bureau, the details of every credit agreement concluded, as well as the termination of the agreement when the debt has been paid in full;
• to propose to the consumer to seek advice when the consumer is in default;
• to maintain records of credit applications, agreements and accounts as prescribed in the Regulations;
• to sell goods subject to a credit agreement as soon as possible, for the best price possible, should the consumer request it, and to provide the consumer with a financial statement.

Over-indebtedness and reckless credit

Over-indebtedness is frequently a disastrous consequence of the high cost of credit. Levenstein summarises this state of affairs:

Unfortunately, in South Africa, too many people with too little money have been given too much credit. This ultimately leads to over-indebtedness which results in a never-ending circle of frustration for the consumer who can never repay his debts.

The Department of Trade and Industry’s 2004 policy framework describes credit as “a double-edged sword:”

Whilst credit allows access to products or services that cannot be acquired out of a single month’s income, it can also be a dangerous instrument that can lead to high levels of debt and indebtedness.

It is quite easy for credit to lead to financial hardship and destroy a household’s wealth. Taking on extra loans in order to pay back existing loans can lead people into a debt spiral out of which it may be difficult to escape. Over-indebtedness has a negative impact on families and has in some extreme cases even led to family suicides. Over-indebtedness further has an impact upon the workplace, can lead to de-motivation, absenteeism and even a propensity to commit theft.

A Human Sciences Research Council survey on household indebtedness in South Africa showed that, in 2000, over sixty per cent of the regular disposable income of households earning less than R5,000 per year was used to service debt: that is, to pay interest on debt. Levels of indebtedness increased by more than 200 per cent between 1995 and 2000 in the poorest households, with incomes of less than R25,000 per year. This trend seems to have continued since.

It has been argued that consumers are often to blame for allowing themselves to become over-indebted by unwisely borrowing too much money, or by buying too much on credit. This is usually the result of economic desperation and lack of understanding of the difficulties of repaying or servicing their debt. Credit providers are, however, often to blame for recklessly giving too much credit to consumers who cannot afford to service their debt. One of the most important objectives of the Act is to combat over-indebtedness and reckless credit granting. Sections 78 to 88 of the Act contain detailed, far-reaching and extremely important provisions in this regard.

Over-indebtedness

A consumer is over-indebted if the available information indicates that the consumer is unable to pay the amounts due under a credit agreement in time. When deciding whether or not a consumer is over-indebted, a court must consider the consumer’s

• financial means (primarily income);
• financial prospects (income-earning potential);
• other debt; and
• history of debt repayment.

In any court proceedings, a court may declare a consumer to be over-indebted. Alternatively, a debt counsellor may have a role in one of two ways:

1. A court may refer a consumer to a debt counsellor for a recommendation as to whether or not the consumer is over-indebted.
2. A consumer may apply in person to a debt counsellor to be declared over-indebted (although this is not permitted if the credit provider has already taken steps to recover the debt). The consumer must apply by completing and submitting Form 16 to the Regulations. The consumer must provide details of the debt and pay a fee of R50 to the debt counsellor.

A debt review must then take place. The debt counsellor must notify all credit providers and credit bureaux listed in the application; they must co-operate fully with the debt counsellor. The debt counsellor must then evaluate the consumer’s indebtedness. The evaluation can have one of three possible results:

1. The consumer is over-indebted. The debt counsellor may recommend to the magistrate’s court thatone or more credit agreements be declared reckless, and/or that one or more of the consumer’s debts be re-arranged (for example, by extending the period of a contract and requiring smaller payments, and/or by postponing the dates of payments).
2. The consumer is not over-indebted, but is having difficulty paying his debts on time. The counsellor may recommend that the consumer and credit providers try voluntarily to agree on a plan of debt re-arrangement, which may be filed as a consent order in court. If no agreement can be reached, the debt counsellor may make a recommendation to the court, which may make an appropriate order.
3. The consumer is not over-indebted, and the application is rejected. The consumer may then apply himself to the magistrate’s court for a debt review by completing and submitting Form 18 to the Regulations.

A credit agreement may be declared to be reckless only if the consumer is found to be over- indebted. If the debt counsellor finds that the consumer is not over-indebted, but is of the view that one or more credit agreements are reckless, these agreements may not be declared to be reckless. Credit providers may therefore still enforce credit agreements that are in fact reckless, but they may not be formally declared to be reckless.

While this process is under way, a consumer may not use his credit facility (for example, his credit card); nor may he enter into another credit agreement. A credit provider who enters into a credit agreement with a consumer while the consumer is under debt review runs the risk of the credit agreement’s being declared reckless credit.

Also, if a consumer is in default under a credit agreement, and the credit provider has already commenced debt-enforcement proceedings, that agreement may not be subject to the debt review. This could encourage credit providers to start proceedings to recover debt earlier than they otherwise might have done.

The debt-review procedure might well be used by shrewd consumers to delay or avoid payment under a credit agreement. This is so because there are many provisions in the Act which limit the rights of credit providers to enforce debts under review. However, if the consumer is in default under a credit agreement subject to review, the credit provider may give notice to the consumer, the debt counsellor and the NCR to terminate the review. This notice may be given at least sixty days after the date of application for debt review: that is, if the debt-review process is dragging on too long. The credit provider may then take steps to enforce the agreement. The court then has the discretion to order that the debt review resume if appropriate. Finally, it should be noted that an application for debt review by a consumer has serious implications for the consumer as to his creditworthiness and the conclusion of future agreements.

Reckless credit

A credit provider must not enter into a reckless credit agreement with a consumer. Before entering into a credit agreement, a credit provider must first take reasonable steps to assess the consumer’s

• general understanding of the risks and costs of the proposed credit;
• debt repayment history; and
• existing financial means, prospects and obligations.

A credit agreement is reckless

• if, at the time it was concluded, the credit provider failed to conduct the necessary assessment (described above), irrespective of what the outcome of the assessment might have been; or
• if the credit provider entered into the agreement despite the fact that information available to the credit provider after the assessment showed that
  • the consumer did not generally understand the consumer’s risk and the costs or obligations under the proposed credit agreement; or
  • the conclusion of the agreement would cause the consumer to become over-indebted.

This provision helps to prevent credit providers from taking shortcuts by simply accepting seemingly creditworthy debtors at face value. A credit provider may use its own assessment mechanisms, provided these are fair and objective. The consumer, in turn, must fully and truthfully provide the requested information. Failure by the consumer to do so could provide the credit provider with a complete defence to an allegation of reckless credit granting.

In any proceedings that concern credit agreements, a court may declare that a credit agreement is reckless, in which case the court may make an order

• setting aside all or part of the consumer’s rights and obligations under that agreement (so that, for example, the consumer may not have to repay a loan or pay the instalments on a credit sale at all); or
• suspending the force and effect of the agreement for a specific period.

If a court declares that a specific credit agreement is reckless, it must also decide whether or not the consumer is over-indebted at the time of the court proceedings. All the debt of the consumer must be considered. If the court finds the consumer to be over-indebted, it may make an order

• suspending the force and effect of that agreement for a specific period; and
• restructuring the consumer’s obligations under any other credit agreements.

While an agreement is suspended (not set aside),

• the consumer is not required to pay anything in terms of the credit agreement;
• no interest or fee may be debited to the consumer; and
• the credit provider’s rights in terms of the agreement are unenforceable.

After the period of suspension ends, all the parties’ rights and obligations are revived and become enforceable again. However, interest or fees that would normally have accrued during the period of suspension may not be charged to the consumer. This is a drastic remedy indeed.

The reckless-credit provisions do not apply to a number of credit agreements, including

• a school loan;
• a student loan; and
• an emergency loan.

A student loan, for example, could be granted to an unemployed consumer, who might not have a credit record (so that the credit provider does not know his payment history). The consumer might not be creditworthy, and there is no security. The nature of these agreements excludes them from being reckless lending.

The negative results for credit providers of either

• contracting with over-indebted consumers; or
• concluding reckless credit agreements

are serious. Many of the provisions are designed to penalise credit providers. Credit providers will be very careful to reduce the risk of bad debt. These provisions are therefore likely to reduce over-indebtedness and reckless credit granting, at least in the formal sector. A negative result for consumers, however, could be that credit grantors will be much more reluctant to grant credit in the future, and that, therefore, fewer people will be able to access credit. Further, this could lead to an increase in the number of unregistered and illegal credit providers.

The cost of credit

It is critical that one understand the full implications of the new cost-of-credit provisions in the National Credit Act and Regulations.

Interest rates until 1 June 2007

Until June 1, 2007, the Usury Act (which has now been repealed by the National Credit Act) prescribed limits on the interest rates that credit providers could charge. Until this date, the maximum interest rate was twenty per cent per year on all credit agreements up to R10,000 and seventeen per cent per year on credit agreements over R10,000. However, registered micro-lenders were made exempt from the Usury Act from 1992, meaning that they were entitled to charge whatever interest rates they liked. This resulted in exorbitant interest rates, with micro-lenders charging typically thirty per cent per month (or 360 per cent per year)—eighteen times more than the limit of twenty per cent per year for other credit. Because of the enormous profits that micro-lenders could make, the industry spiralled out of control, growing rapidly year-on-year. In the three years between September 2003 and August 2006, for example, industry disbursements more than doubled. The industry grew by an average of over thirty per cent per year. For the twelve months ending August 2006, the total Rand-value of loans disbursed in the registered micro-finance sector was over R30,000,000,000.

The socio-economic impact of excessive interest rates

Excessive interest rates have caused terrible socio-economic hardships and suffering for low-income individuals and communities. A high percentage of personal income is used to service micro-lending debt, leaving very little of borrowers’ personal income to pay for other household expenses. Borrowers on thirty-day loans in particular are very soon caught in debt traps from which they are unable to escape. Tens of billions are lost to lower-income communities in the form of interest on micro-loans every year, contributing to the perpetuation of poverty.

Levels of indebtedness are high and appear to be increasing. The problem of over-indebtedness is made worse by high levels of consumption finance and consumer ignorance and illiteracy. (32 per cent of the adult population of South Africa were functionally illiterate in 2001.) By allowing the micro-lending industry to function without legislated and enforced interest-rate limits since 1992, the Government effectively made possible the exploitation of the ignorance of lower-income communities, which arguably amounted to legislated economic abuse.

The cost of credit in terms of the National Credit Act

The National Credit Act prescribes limits on interest rates for all forms of credit, including micro-loans. However, the Act introduces other fees (the initiation fee and the service fee) which cause the total cost of credit to remain extremely high. No longer is it sufficient to consider only interest rates. Interest rates, initiation fees and service fees must all be carefully calculated in order to work out the total cost of credit for borrowers. The new cost-of-credit provisions came into force on June 1, 2007.

Interest

Different interest rates apply to different categories of credit agreements:

Short-term credit transactions

“Short-term credit transactions” are agreements up to R8,000 repayable within six months; usually these are micro-loans. The maximum interest rate permitted is five per cent per month, or sixty per cent per year.

Unsecured credit transactions

“Unsecured credit transactions” are agreements for which there is no security for the debt at all (like loans or sales on credit). There is no limit on the amount or repayment period. Unsecured agreements for more than R8,000 and/or repayable over more than six months fall into this category. The maximum interest rate is linked to the South African Reserve Bank (SARB) Repurchase Rate ((Repurchase Rate x 2.2) + 20% per year), and is currently 39,8 per cent per year (based on the current repo rate of nine per cent). This maximum rate is nearly double the maximum permissible rate in terms of the Usury Act that applied until May 31, 2007 (20 per cent per year). Sales of furniture, for example, could now cost twice as much to service.

Credit facilities

Secured bank loans, credit card or cheque accounts fall under the category “credit facility.” The maximum interest rate is also linked to the SARB Bank Repurchase Rate, and is currently 29.8 per cent per year.

Developmental credit agreements

“Developmental credit agreements” are credit agreements entered into to develop a small business, an educational loan, or a loan for purposes of building low-cost housing. The maximum interest rate is 38.8% per year.

Mortgage bond agreements

For mortgage bond agreements, the maximum interest rate is 24.9 per cent per year.

The initiation fee

The initiation fee is intended to cover the costs of initiating a credit agreement, although it is not clear exactly what costs the fee is intended to cover. It is a once-off payment made by the consumer on conclusion of the credit agreement or payable in instalments (as a separate loan attracting interest).

The maximum initiation fee in terms of the Regulations is R150 per credit agreement, plus ten per cent of the amount of the agreement in excess of R1,000, but never to exceed R1,000. Also, the initiation fee may never exceed fifteen per cent of the principal debt.

File:Table A - Maximum initiation fees for different size loans.png

Examples of the calculation of maximum initiation fees for different-size credit agreements.

It will be extremely difficult for consumers to find the necessary cash to pay the initiation fee up front at a time when they are taking out a loan precisely because they are in need of cash. Most lenders will thus be unable to afford to pay the initiation fee on taking out a loan, particularly in the case of the very poor borrowing for consumption purposes. These people will thus be forced to allow the initiation fee to be capitalised and re-paid, probably in the same number of instalments as the initial loan, and subject to the same interest rate as the initial loan. The result will be that the effective monthly cost of credit will increase.

The service fee

The service fee is defined as a fee that may be charged periodically (usually monthly) by a credit provider in connection with the routine administrative cost of maintaining a credit agreement. The maximum service fee in terms of the Regulations is R50 per month, or R600 per year. The same “flat-rate” maximum service fee of R50 is applicable to all categories and sizes of credit agreements. It appears that the service fee was standardised in order to simplify the application of the Act, justifiable on the basis that every loan, no matter what its size, needs to be administered.

File:Table B - The effective cost of the service fee on different size loans.png

The effect of the flat-rate service fee of R50 per month on different size loans in terms of South African law, shown as a percentage of the loan amount.

The smaller the loan, the more expensive will be the service fee relative to the loan. When this cost is shown as a percentage, it is clear that the service fee adds significantly to the cost of the loan, increasing rapidly with smaller and smaller loan amounts. The “flat-rate” service fee of R50 per month is exorbitant in the case of small loans of less than R1,000 and is still too high in the case of loans up to R5,000.

This result is so unfair that borrowers of very small loans (who are almost invariably from the poorest communities) will be discriminated against. The Act itself provides that the service fee must vary relative to the principal debt: that is, that it should be higher for bigger loans, and lower for smaller loans. This is not so. The Regulations should be amended to set the service fee at a percentage of the loan amount, subject to both a minimum and a maximum rand amount (as is the case for the initiation fee). Alternatively, the service fee should be scrapped on smaller credit agreements, and the maximum interest rate increased if necessary. If the service fee is not amended or scrapped, then it should be challenged in court.

Maximum limits and probable market costs

The prescribed interest rates and fees are maximum amounts only. The Department of Trade and Industry hopes that the credit industry will not “jump to the maximum rates”, and has said that it has the power to adjust these rates quickly if necessary.

The micro-lending industry in particular was born and grew on the strength of exorbitant interest rates, and many micro-lenders will struggle to stay in business with the new limits in place. It is therefore very likely that most lenders will charge the maximum rates of interest and fees to keep their profits as high as possible. Bigger lenders such as banks, on the other hand, are able to afford to be competitive, and are likely to charge lower rates.

The danger of masking the total cost of credit

The drastic reduction in interest rates has the effect of masking or obscuring the true total cost of credit when the initiation and service fees are added. It is possible that these fees could to a large extent remain hidden, with the emphasis being placed on interest rates (which are more familiar to consumers) when products are marketed. The fees help to keep interest rates lower, which makes credit look cheaper, when in fact credit may not be cheaper. The skewing of credit costs away from interest and towards fees (which are not familiar to consumers) will increase the chances of consumers’ being misled as to the actual cost of credit. Many will be lured into borrowing money which will cost much more than they had initially expected. It is essential that paralegals understand the danger of this masking of the true cost of credit, in order to be able to warn their clients of this danger.

The combined impact of interest, the initiation fee and the service fee

File:Table C - Illustration of the cost of credit in terms of the National Credit Regulations.png

The total cost of credit (for either short-term or unsecured loans) applied to a number of loan amounts and loan periods. The total cost of credit (for either short-term or unsecured loans) is applied here to a number of loan amounts and loan periods. The total monthly cost of credit is indicated in rands; this rand amount is indicated as a monthly percentage of the initial loan. This monthly percentage gives the most accurate possible indication of the total cost of credit in each case. The annual cost may be obtained by multiplying these figures by twelve. It is assumed for the purposes of these calculations that the maximum rates of interest and fees are charged, for the reasons explained above. It is also assumed that the total initiation fee is charged to the borrower and capitalised: that is to say, is paid off over the same period as the loan, at the same interest rate (five per cent per month if it is a short-term loan, or 3.3 per cent per month if it is an unsecured loan). If the initiation fee were regarded as a separate loan, it would attract its own initiation and service fees, which would make the initiation fee even more expensive. For the sake of simplicity, interest is not charged on unpaid interest and other fees (although this is permitted by the Act), which would make the total cost of credit even more expensive.

The new credit limits have a negative impact on smaller loans. The smaller the loan, the more expensive it is. A one-month loan of R500 will cost about the same as the typical thirty per cent per month charged prior to the Act. Smaller loans will be even more expensive than that. A R200 loan will cost 46 per cent per month (552 per cent per year), which is more than nine times the maximum interest of five per cent per month.

The positive impact of capped interest rates, furthermore, is negated by the high maximum initiation and service fees.

The impact of the initiation and service fees on smaller loans amounts to a skewing of the cost of credit away from interest and towards these fees, so that interest decreases relative to these fees. This skewing has the dangerous effect of masking the true cost of credit from the consumer, and of misleading the consumer.

A more equitable result could be achieved by removing or reducing the initiation and service fees, reducing the maximum permissible interest rate, and reducing the maximum size amount of short-term credit transactions. This will require amendments to the Regulations.

The socio-economic consequences of the new cost of credit

The new structure for costing of credit will work best for the biggest credit advances, in excess of R8,000. The cost of credit on agreements of less than R1,000 is comparable with the typical thirty per cent per month charged with no interest limits on small loans, The vast majority of borrowers of micro-loans are from low-income groups. The poorest households carry the greatest debt-servicing burden. Low-income individuals and communities who borrow small amounts are therefore likely to continue to suffer the same devastating socio-economic hardships referred to above, contributing to the perpetuation of poverty.

Borrowers of one-month loans are most vulnerable, since these loans are much more expensive than other short-term loans. Low-income borrowers are usually unable to afford to pay back these loans at the end of the month; repeated loans have often to be taken out to fund in full the re-payment of previous loans. Borrowers are caught in debt spirals and subsequent debt traps, with the disastrous consequence that borrowers in effect remain permanently indebted.

File:Table D - Illustration of the application of the new cost of credit to one-month loans and resultant debt spiral.png

The new cost of credit, applied to two examples. In each case, the cost of credit is calculated as follows: interest at 5% per month + initiation fee at 15% of loan amount (+ 5% interest per month) + service fee (always R50). In Example A, by Month 2 the loan repayment (R840) has already exceeded the old-age pension of R820. In Example B, the loan repayment in Month 3 almost exceeds the total wage. These examples confirm that debt spirals and debt traps will continue to occur on a wide scale when the new cost of credit is applied, and could prove to be one of its greatest dangers.

Conclusion

The National Credit Act has made great strides towards consumer protection, and the new limits on interest rates will provide welcome relief for many borrowers. The combined effect of interest, the initiation fee and the service fee will, however, cause the cost of credit on small loans to remain exorbitant. This will have a devastating negative impact on poorer individuals and communities.

Legal remedies provided by the Act

The Act provides only a relatively short list of offences that attract criminal penalties. By contrast, the Usury Act provided that any person who contravenes any provision of the Act commits an offence. Thus, for example, it was a criminal offence to charge interest higher than the Usury Act maximum, which is no longer the case.

However, the Act does provide a number of civil legal remedies for consumers, some of which are drastic departures from previous law. The most important of these remedies are outlined below.

Unlawful credit agreements

Section 89 lists a number of credit agreements that are unlawful, including

• an agreement with a consumer who is a minor unassisted by a guardian;
• an agreement with a person who has been declared mentally unfit;
• an agreement with a person under an administration order without the administrator’s consent;
• an agreement resulting from negative-option marketing (explained above);
• an agreement with an unregistered credit provider who was supposed to be registered (unless application for registration is made within thirty days after the credit agreement was concluded); and
• an agreement with a credit provider who was subject to a notice by the NCR to stop extending credit.

If a credit agreement is found to be unlawful, a court must order

• that the credit agreement is void;
• that the credit provider refund to the consumer any monies paid by the consumer, with interest; and
• that the credit provider’s rights to recover monies paid or goods delivered to the consumer be cancelled or forfeited to the State (if the court is of the view that the consumer would otherwise be unjustifiably enriched).

The credit provider will not get back the money lent or property sold, and the court does not have a discretion to order this. This is a drastic remedy and a departure from the common law. It was not previously available in the case of unregistered micro-lenders, and is a significant new remedy readily available to consumers.

Thus, for example, a court will be able to declare a loan from an unregistered micro-lender to be void (if the Act requires the micro-lender to be registered), and order the micro-lender to refund all instalments paid, with interest. Furthermore, the court must order that the loan amount paid to the consumer be retained by the borrower or forfeited to the State. The amount loaned is therefore lost to the unregistered micro-lender altogether.

Unlawful provisions of credit agreements

Section 90 lists numerous provisions of credit agreements (as opposed to the entire agreements) that are unlawful and not permitted. They are too many to list here. The list is broadly-worded and far-reaching; many of the provisions will probably be open to a wide range of interpretations, which is likely to lead to uncertainty. For example, a provision is unlawful if its general purpose or effect is to defeat the purposes or policies of the Act, or to “deceive” the consumer. Further, a provision is unlawful

• if it avoids a credit provider’s obligation or duty in terms of the Act;
• if it sets aside or overrides the effect of any provision of the Act;
• if it authorises the credit provider to do anything that is unlawful in terms of the Act, or to fail to do anything that is required in terms of the Act;
• if it waives or deprives a consumer of a right afforded by the Act;
• if it waives any common-law rights applicable to the credit agreement;
• if it expresses the consumer’s consent to a pre-determined value of costs of enforcement of the agreement;
• if it expresses the consumer’s consent to the jurisdiction of the High Court, or any court that would normally not have jurisdiction for reasons of its geographical location;
• if it provides for the consumer’s depositing an identity document, credit or debit or access card, or providing a PIN;
• if it authorises a person acting on behalf of the credit provider to enter premises to repossess goods; or
• if it contains an undertaking to sign in advance any documentation relating to the enforcement of the agreement (like a consent to judgment or emoluments-attachment order).

An unlawful provision is void. Whenever a court has a matter before it which concerns a credit agreement that contains an unlawful provision, the court may

• sever (remove) the unlawful provision from the credit agreement;
• alter the provision to render it lawful; or
• even declare the whole credit agreement unlawful and make orders similar to those provided for unlawful credit agreements, set out above (another major departure from the common law).

The consumer alleging the unlawful provision is entitled to apply to court for orders in these terms.

Thus, for example, if a credit agreement for the sale of furniture provides for interest or fees in excess of the maximum amounts permissible, a court must declare the offending provisions to be void and enforce the remainder of the agreement. However, it seems that the court may be able to declare the entire agreement void, order the furniture shop to refund all amounts paid, and order that the furniture sold be retained by the borrower or forfeited to the State.

In duplum rule

The Act has codified the in duplum rule for the first time in South Africa’s legislative history, and extended the rule further to include all credit costs. This rule states that, while a consumer is in default, all credit costs will stop being added to the debt when their total equals the unpaid balance of the principal debt. It is likely that increased use will be made of the rule since it has been legislated. It must be remembered, however, that it will apply only when the consumer is in default.

Reckless credit and over-indebtedness

Other legal remedies for consumers already discussed above include

• a court order declaring a loan agreement to be reckless, which could result in the setting aside of all or part of the borrower’s rights and obligations under the agreement, or the suspension of the force and effect of the agreement for a determined period; and
• a finding that a consumer was over-indebted at the time of the conclusion of the agreement, in which event the court may order the suspension of the force and effect of the agreement and the restructuring of the consumer’s obligations under any other credit agreements.

Dispute settlement and debt enforcement

Dispute settlement

If the Act has been contravened, a person has one of two options:

1. to lodge a complaint with the NCR; or
2. to make use of one of the other dispute-resolution mechanisms established by the Act.

Lodging a complaint with the NCR

The Act contains detailed provisions regarding the role of the NCR. Complaints to the NCR must be lodged by completing and submitting to the NCR Form 29 to the Regulations. The NCR may resolve complaints lodged with it; the resolution may become a consent order by a court or the Tribunal. The NCR may also refer the dispute to a debt counsellor, an ombud with jurisdiction or a consumer court. After investigating the matter, the NCR may refer the matter to a provincial consumer court or the Tribunal for an order allowed by the Act.

Other dispute-resolution methods

Alternatively, disputes may be referred for resolution directly to the relevant ombud if the credit provider is a financial institution (like a bank), to a consumer court or to an alternative dispute resolution agent. With the consent of the parties, the resolution may be recorded in writing and made an order of court or the Tribunal.

In his book The National Credit Act Explained, Otto concludes,

All in all, the muscle of the National Credit Regulator, the far-reaching powers of the National Consumer Tribunal and the courts, the almost paternalistic protective inclination of the legislature, and the extensive network of dispute-solving account for consumer legislation that is going to have a huge impact on the enormous credit industry in South Africa.

Debt enforcement

The Act limits the credit provider’s common-law rights to enforce debt: that is, to claim what is due in terms of the credit agreement. This is in line with international consumer legislation, but the Act’s provisions have been criticised as being unusually cumbersome and detrimental to credit providers.

Default notice to the consumer

If a consumer is in default, the credit provider must notify the consumer of his default in writing. This is effectively a letter of demand. The notice must do more, however: The credit provider must propose to the consumer that the consumer refer the credit agreement to, among others, a debt counsellor to resolve the dispute or agree on a plan to get payments up to date.

As regards the method of delivery of the written default notice, the consumer may choose to be informed in one or more of these ways:

• in person at the credit provider’s business premises;
• at any other place chosen by the consumer, at the consumer’s expense; or
• by ordinary mail fax or email or printable web-page.

Must the default notice actually reach the consumer to be effective? The Constitutional Court held in Sebola v Standard Bank that the Act, although it gives no clear meaning to “deliver,” requires that the credit provider, in seeking to enforce a credit agreement, must aver and prove that the notice was delivered to the consumer. Where the credit provider posts the notice, proof of registered despatch to the address of the consumer, together with proof that the notice reached the appropriate post office for delivery to the consumer, will constitute sufficient proof of delivery (in the absence of contrary indication).

Debt procedures in court

A credit provider may go to court to enforce a credit agreement only if

• the consumer has been in default for at least 20 business days;
• at least ten business days have elapsed since the credit provider delivered the default notice;
• the consumer has not responded to the notice or responded by rejecting the proposals in the notice;
• the consumer has not surrendered to the credit provider the goods subject to the credit agreement him/herself (in the case of an instalment agreement, secured loan or lease agreement).

The twenty days and ten days referred to above may run concurrently: that is, the ten-day period may occur during the 20 day period.

Where a case has been referred to the National Consumer Tribunal, debt counsellor, ombud, alternative-dispute-resolution agent or consumer court, or the credit agreement is subject to a debt review, the court will adjourn the case.

A much larger number of requests for default judgment on credit agreements now have to be referred to a magistrate, rather than being dealt with by the clerk of the court. This will greatly increase the workload of the magistrates, and could cause debt enforcement procedures to take much longer, resulting in frustration for credit providers.

Attachment and sale of goods

If a credit provider properly cancels a credit agreement, the court may order the attachment of the goods, allowing for the sale of the goods to settle the account. This procedure follows the usual common law.

If the proceeds of the sale are not sufficient to settle the account, the credit provider may approach the court for an order to recover the outstanding balance. This applies in the case of the instalment agreement, secured loan or lease. Strangely absent from this list is the mortgage agreement. This implies that the mortgagee (a bank, usually) will be able to rely only on the proceeds of the sale of the property to settle the account—even if this is insufficient, and even if the mortgagor (the debtor) is very wealthy and has other assets that could be attached.

Interim attachment orders

Common practice is that a credit provider asks the court for an “interim attachment order,” pending cancellation of the agreement, in order to protect goods at risk (like a motor car) from deterioration or damage. This order will allow the sheriff to attach the goods for safekeeping until such time as the court action is finalised, which can take a long time. It is not clear from the Act whether or not credit providers will still be able to obtain interim attachment orders. The past practice of obtaining such orders may well continue.

Re-instatement of credit agreement by consumer

At any time before cancellation, a consumer may reinstate a credit agreement that is in default by paying all amounts overdue, plus default charges and the costs of enforcing the debt to date. The consumer may then repossess property attached, but not if the goods have already been sold.

Surrender of goods

The consumer may choose at any time to surrender the goods that are subject to the credit agreement, whether or not the consumer is in default. This provision is discussed in detail above.

Unlawful collection practices

A credit provider may not use an identity document, credit or debit card, access card or PIN to enforce a credit agreement or collect on the agreement. A contravention of this provision is a criminal offence.

See also

• Credit (finance)
• South African law

References

• Otto The National Credit Act Explained (LexisNexis, 2006).
• JW Scholtz et al. Guide to the National Credit Act [looseleaf] (LexisNexis, 2011).