Tag archives: National Credit Act

Judicial oversight of execution against property requires full facts before court

Where an order was sought declaring immovable property specially executable but no facts had been placed before the court by the defendant, the court authorised the sale. The court held that to deny an order declaring a property specially executable where the summons clearly draws a debtor’s attention to their right to lead evidence and … Continue reading

A settlement agreement is not governed by the National Credit Act if the underlying dispute is not

The Supreme Court of Appeal found that if the underlying cause of a settlement does not fall within the parameters of the National Credit Act (NCA), then the settlement agreement cannot logically be converted to a credit agreement under the NCA. The underlying cause (in this case the rental agreement) is of vital significance because … Continue reading

Appeal court reluctantly finds a once-off loan requires registration as credit provider

The appeal court has found that the requirement to register as a credit provider is applicable to all credit agreements once the prescribed threshold is reached (currently zero), irrespective of whether the credit provider is involved in the credit industry and irrespective of whether the credit agreement is a once-off transaction. The appeal court reluctantly … Continue reading

Section 126B(1)(b) of the National Credit Act is not retrospective

Section 126B which prohibits dealing in a debt under a credit agreement extinguished by prescription, and allows the consumer to raise the defence of prescription (even though the consumer agreed to revive a prescribed debt without being aware of the prescription defence) came into force on 13 March 2015. Before section 126B was enacted an agreement … Continue reading

Constitutional Court declares that emolument attachment orders need court consent

In our blogs from July 2015 and August 2015 we dealt with the High Court’s judgment declaring certain aspects of the long-established but often abused debt collecting process of emolument attachment orders unlawful. On 13 September 2016, the Constitutional Court confirmed that changes must be effected to section 65J (2)(a) and (b) of the Magistrates … Continue reading

Registration as credit provider – Final determination threshold set at zero

On 11 May 2016, the Department of Trade and Industry announced in Government Gazette 39981 that the new credit provider registration threshold will be Nil (R0). Is the threshold rational and reasonable? If the threshold is not rational, credit providers whose credit agreements are to be declared void may be able to challenge the threshold. … Continue reading

New NCA regulations prescribing maximum interest rates and service and initiation fees come into force as court application fails

The new regulations prescribing the maximum rates of interest, initiation fees and service fees that credit providers can charge come into effect on 6 May 2016. An urgent application by Micro Finance South Africa (MFSA) to stay the implementation of the new regulations pending the outcome of an application to set aside the Minister of … Continue reading

Many refunds for force-placed insurance

There have been a number of cases internationally where financial institutions have been obliged to refund policyholders for imposing force-placed insurance deals at the time of contracting for financial services. Under the National Credit Act in South Africa, credit insurance must not be unreasonable nor at an unreasonable price and this is a good test … Continue reading

National Credit Act salary attachment procedure revisited

In early July 2015 the High Court declared aspects of a long-established but often abused debt collecting process unlawful, with potential wide-ranging consequences. It could render hundreds of thousands of salary attachment orders unenforceable. In our recent blog post we highlighted the findings of what is known as the Desai Judgment (after the judge who … Continue reading

Comment on the draft regulations limiting interest and fees under the NCA

The Minister published the draft regulations on the review of the limitations of fees and interest rates on 25 June 2015. The regulations will increase and decrease interest rates and fees that credit providers can levy on consumers’ mortgage agreements, credit cards, store cards and unsecured credit transactions. The proposed changes to the interest rates … Continue reading

Credit providers who overcharge may have to repay consumers

The National Credit Act (NCA) sets out the maximum service fees allowed in credit agreements. The supreme court of appeal in Barko Financial Services v National Credit Regulator confirmed the National Consumer Tribunal’s power to order reimbursement by credit providers to consumers for service fees paid in excess of the statutory limits. The extra fee … Continue reading

National Credit Act: Creditor can take judgment if consumer defaults under debt re-arrangement

The appeal court has reaffirmed that a credit provider can proceed and take judgment against a consumer who defaults on any obligation under a debt re-arrangement that was agreed between the consumer and the credit provider or ordered by a court. That is the plain meaning of section 88(3) of the National Credit Act (NCA). … Continue reading

Nature of a cheque transaction

A cheque is a contract in writing that enjoys the characteristic of negotiability but it must be founded on a reasonable cause in order to be valid and enforceable. If the underlying transaction for which the cheque was given is voidable, illegal or is not performed, a claim by the payee for enforcement of the … Continue reading

The scheme of the National Credit Act

Certainty in regard to the cost of the proposed credit is imperative. Common to all forms of a credit agreement for the purposes of the National Credit Act is the requirement of payment of a charge, fee or interest in return for granting credit. This covers any consideration or payment made by a consumer to … Continue reading

Debt review and the National Credit Act

A credit provider is entitled to enforce a loan that is subject to a debt-restructuring order without notice to the debtor once that order has been breached. This was confirmed by the Constitutional Court in Ferris v FirstRand Bank Limited.  Mr and Mrs Ferris were unable to repay their home loan to FirstRand Bank Limited, … Continue reading

Removal of adverse consumer credit information under National Credit Act

The effect of the recent regulations that require the removal of adverse consumer credit information should not be overblown. The information to be removed (besides information relating to paid up judgments) is limited to adverse classifications and does not require the removal of statements of fact. The adverse classification of consumer behaviour refers to subjective … Continue reading

Extraordinary developments with the National Credit Act

The portfolio committee on trade and industry has proposed amendments to the National Credit Act (NCA) in a constitutionally impermissible way. The portfolio committee is requesting permission from parliament to make further amendments to the NCA. On 13 February 2014 the committee invited public comment ‘in the event that this permission is granted’. On 14 … Continue reading
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