Debt Getting The Better Of You? Get Help And Get Out
This month is an important reminder of South African’s human rights, and rightfully so. But, if there is one thing that the South African consumer should take note of, is their rights as consumers, which is celebrated on World Consumer Rights Day on the 15th of March. Consumers are primarily responsible to not only make sure they protect their human and consumer rights, but also to guarantee their right to a debt-free future. How do they enable their way to a financially-free future exactly?
According to Matthys Potgieter, spokesperson and debt expoert at DebtSafe, South Africans should know what their consumer rights entail for them to ensure themselves a debt-free future. The National Credit Regulator (NCR) outlines various consumer rights in terms of the National Credit Act (NCA). Consumers have the right to:
- Receive a credit agreement in simple and clear language. Individuals with average literacy skills (for example) need to fully understand the information given in plain language.
- A quote and pre-agreement statement, binding for five days. Consumers do not have to accept an offer made in the pre-agreement. The quotation or pre-agreement is valid for five business days – meaning that they have some time to consider whether or not they want to enter into the proposed agreement. Referring to the above right of a consumer, there is also a cooling-off period (when a contract has been signed by the consumer). The consumer has five days to change his/her mind and has to notify the company (in writing) that he/she would like to cancel the agreement.
- Advertising and marketing which contains all the information on the cost of credit. Marketing and advertising have to be authentic and display all the terms and costs involved to the consumer.
- Know why credit was declined. Consumers have the right to ask the creditor why credit was declined. And, if the creditor’s decline is based on a credit bureau report – the credit bureau’s details (name, contact details etc.) – must be given to the consumer.
- The regulation of an automatic credit limit increases. Institutions might phone ‘good credit users’ to increase their credit limit of a credit card, for example. Consumers need to know they can say ‘no’ and the organization cannot increase their credit limit without their consent. Prohibition of reckless lending. Reckless lending is when a credit provider gies a consumer credit, like a loan for example, without following the proper affordability assessment guidelines. Consumers need to make sure this doesn’t happen to them.
- Regular Credit Bureaus and the right to receive their free credit report once a year. Consumers need to get ‘involved’ with their finances and know what their credit profile is currently portraying. They can visit the following regulated credit bureaus: Compuscan, TransUnion, XDS or Experian and download their report once a year, at no cost.
- Assistance when over-indebted, negotiate with a credit provider or debt counselor. Communication is key – consumers need to take the first step to get the support they need. Help is around every corner – why wait? Debt counseling to enable the restructuring of their debts.
Potgieter shares a few pointers regarding debt counseling
1. “Debt counseling is the preferred method to get out of debt, rather than sequestrian or administration,” says Potgieter.
2. Each counseling firm of this nature is unique in the manner in which they handle their client’s statutory and procedural requirements.
3. Debt counsellors provide various skills and services to make sure clients attain their Clearance Certificate (Form 19 in terms of the National Credit Act) at the end of the counseling process.
4. The task involved, can include the following: consolidating debt into one affordable installment, giving clients cash flow relief from their next paychecks, dealing with credit providers and potential harassment, implementing a reasonable payment plan and clearing clients debt history form credit bureaus.
5. Regarding fees – debts counseling fees are regulated by the National Credit Regulator. Debt Counselors cannot simply charge what they want.
6. Debt counseling has a rehabilitative spirit. The whole aim is to get the client active again, but in a responsible manner. Many clients who completed the debt counseling process applied for credit with great success.
South Africans have the right to a debt-free future. If a consumer finds him/herself in an unavoidable over-indebted position, debt counselors are here to assist in attaining a so-desperately-needed debt-free life. Consumers can contact DebtSafe’s efficient debt counseling advisors for assistance at the following link.
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