Author : Homeloans SA

The NCA: Banking Consumer Rights in a Nutshell

One of the most important contributions made by the National Credit Act is that it defines our rights as banking consumers. Before the NCA, the banks did not have to share your credit check information with you; they were not compelled to share their reasons for granting or withholding credit; and nothing stopped them from brokering your private information to any one of the so-called database compilers who feed the tele- and mail marketing industry.

Now it is quite a different story. We take a brief look at the five main consumer rights we enjoy under the Act.

The Right to Apply for Credit

As an adult consumer, The National Credit Act affords you the right to apply for credit to a bank. The main thing here is that the bank has to treat all consumers equally in relation to one another when assessing the application, determining fees and rates, compiling the credit agreement and, eventually in enforcing the credit agreement.

Although the bank is obliged to receive and evaluate your application, they reserve the right to approve or reject the application. The bank is allowed to use their own evaluation model provided that the basis of the model is not in conflict with the Constitution and the Promotion of Equality and Prevention of Unfair Discrimination Act.

If you believe that your application has been rejected due to unlawful discriminatory practices, you can either approach the equality court or the National Credit Regulator.

The Right to Know Why your Credit was Refused

You may ask the bank to explain, in writing, their main reasons for:

1.Refusing your application for a new credit facility;
2.Refusing your application for an increased limit on an existing facility;
3.Refusing to renew a renewable credit facility (such as a credit card);
4.Offering you a lower credit limit than the limit you applied for; or
5.Reducing your existing credit limit.

If your credit report was the main problem, the bank has to disclose the name, address and contact details of the credit bureau that issued the report.

The Right to Receive Information in an Official Language

You have the right to receive information and documentation in a language you can speak, read and understand, provided that the language you choose is an official language of the Republic of South Africa. To enable this right, the bank has to allow you to choose from at least two different official languages.

The Right to Information in Plain and Understandable Language

All information has to be presented in a way that a consumer with average literacy skills and minimal credit experience can understand. To ensure that this is achieved, the bank has to use plain language, simple sentence structures and uncomplicated graphics and illustrations.

The Right to Receive Documents

As a consumer you have the right to receive documents. To enable this right, the bank has to have the following delivery mechanisms in place:

1.Ordinary mail;
3.Email; or
4.Printable web-page.

You can choose from any one of these at no additional delivery charge. Should you prefer to have the document delivered in person this will become a chargeable delivery.

The banks are not allowed to charge you a fee for any of the original documents (i.e. quotes) they have to provide in accordance with the requirements of the NCA. You can also request a replacement copy of these original documents once every twelve months. If you need replacement copies of any other documents not specified as compulsory in the NCA, you may be charged search and production fees.

Interlinked with this particular right, is your right to receive your credit report once a year, every year, from each of the two Credit Bureaus operating in South Africa at no charge. You are entitled to dispute incorrect entries made and, if you cannot come to an agreement with the Credit Bureau, you are allowed to approach the Ombudsman.

The Right to Confidentiality

You have the right to confidentiality. This means that, unless you expressly grant permission, the banks and the credit bureaus are not allowed to disclose your personal information to any other party, except as required by Law or as ordered by the court.

To conclude

The National Credit Act has teeth. It allows us, as banking consumers, to approach the National Consumer Tribunal, the courts and the Ombudsman for assistance in credit related matters that we cannot directly solve with the banks and the credit bureaus.