National Credit Act
The National Credit Act, which came into effect on 1 June 2007, governs the granting and management of credit by all credit providers, including micro lenders, banks and retailers.
The Act was introduced to reduce reckless credit behaviour (by credit providers and consumers) and over-indebtedness in South Africa. It applies to all categories of credit agreements entered into between Investec Private Bank and affected parties, at arm’s length. Juristic persons (companies, close corporations and certain trusts) are largely excluded from the ambit of the Act.
There are certain requirements that we, as credit providers, need to meet. This includes:
- Greater disclosure on the cost of credit
- Regulation of advertising and marketing at home or the workplace
- Prohibition of unlawful terms, conditions or clauses
- Prohibition of negative option marketing and automatic credit increases
In terms of the Act, there is much greater focus on the affordability assessment in respect of the proposed loan, as there are serious sanctions in the event of reckless lending. It is therefore critical that you fully disclose your financial obligations and income (the onus is on the client to give full disclosure).
Enforcement of the Act
The National Credit Regulator and the National Consumer Tribunal have been established to ensure effective enforcement of the Act. The Ombudsman for Banking Services and debt counsellors are also available to assist you with complaints regarding dealings with credit providers or to help should you feel that you are in danger of becoming over-indebted.
Your best interests are our priority
As we continue to offer you more exciting and innovative financial options, our responsibility to maintain principles of best advice and business practice increases.
As a highly respected international business, it is our responsibility to ensure that we operate within the Act. Our Private Bankers are fully trained on the requirements of the Act and will guide you if you have any questions on how the Act may affect you.
For further information, please contact your Private Banker or click on one of the links below.
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Investec Private Bank. A division of Investec Bank Limited registration number 1969/004763/06. Investec Private Bank is committed to the Code of Banking Practice as regulated by the Ombudsman for Banking Services. Copies of the Code and Ombudsman’s details are available on request. An authorised financial services provider. A registered credit provider registration number NCRCP9.