Also note that Section 8 (2) of the Act excludes NCA Aum insurance policies, leases and Stokvel agreements. Auxiliary credit contracts are not covered by the definition of credit contracts in the act. Section 5 defines the limited provisions of the law that apply to them. A credit provider cannot enter into a careless credit contract with a consumer. Before entering into a credit contract, a credit provider must first take appropriate steps to assess the consumer. When a debtor finds that a customer is in fact over-indebted, a proposal to repay the liability may be recommended to the customer and his credit providers. If the proposal does not agree, the matter will be dealt with before the Magistrate, who can in turn restructure the client`s debts: “The parties to an auxiliary credit contract are considered to have been concluded 20 working days later – A consumer may at any time return to a credit provider goods subject to a credit contract. The lender must then sell the merchandise and use the product to settle the account. With regard to the old Credit Contracts Act, this procedure applied only in cases of consumer delay. This new provision gives the consumer an extraordinary right to opt out of the agreement if he chooses to do so. A lender who, if a debt is liable, has caused foreclosure charges may ask a court to charge the consumer with the foreclosure fee. The court will only take this injunction if the consumer has provided false information about his address or the location of the goods.
The lender will not recover the money or property sold and the court will not have the power to order it. This is a drastic remedy and an abandonment of the common law. It was not available from unregistered microcredits and is an important new remedy that is readily available to consumers. If a credit agreement (as provided by the NCA and not excluded, as provided above) is entered into by the consumer and the credit provider does not register as a lender pursuant to Section 40 of the NCA, the contract is void. Nevertheless, the creditor reserves the right to demand restitution on the basis of unjust enrichment. This was confirmed in the National Credit Regulator/Opperman e.a. 2013 (1) SA 1 (CC). A number of other agreements are not considered by law to be credit contracts, including when a court declares that a particular credit contract is unwise, it must also decide whether or not the consumer is over-indebted at the time of the court proceedings. All consumer debts must be taken into account.
If the court finds that the consumer is over-indebted, it may issue an order that the President signed by the President on 15 March 2005, governing the assessment, application and maintenance of credit granted by a credit provider to a consumer in the Republic of South Africa. The consumer can transfer the property subject to the credit contract at any time, whether the consumer is late or not. This provision is the subject of an in-depth discussion above. Every adult has the right to apply for a loan, but no one has the right to get credit. A lender may choose to refuse credit on reasonable business grounds, but should not unfairly discriminate against a consumer against other consumers on the basis of race, religion, pregnancy, marital status, ethnic or social origin, sex, sexual orientation, age, disability, culture, language, etc.