Tag archives: NCA

Loan between friends not arms’ length and not invalid under NCA

By Patrick Bracher (ZA) on April 11, 2023 Posted in General

A High Court judgment in March 2023 applied good law and common sense in finding that a loan between parties who had a closely knitted friendship was not an arms’ length transaction and was therefore not governed by the National Credit Act, 2005 (NCA). A credit transaction is not governed by the NCA if the … Continue reading

Club fees lawful under National Credit Act

By Patrick Bracher (ZA) on March 11, 2020 Posted in General

The respondent furniture retailer in The National Credit Regulator v Lewis Stores (Pty) Ltd offered club membership to its customers including its credit agreement customers which afforded certain benefits to the club members including the chance to win attractive prizes. Club membership is open to any person whether a credit customer or not, and the … Continue reading

Jurisdiction of the National Consumer Tribunal

By Patrick Bracher (ZA) on January 22, 2020 Posted in General

The Supreme Court of Appeal discussed, without deciding, the jurisdiction of the National Consumer Tribunal to deal with matters arising under sections 90 and 91 of the National Credit Act relating to the declaration of a provision as unlawful in terms of section 90(2) and void. It appears from section 164(1) that no unlawful provision, … Continue reading

Section 129 National Credit Act notice must state the amount in arrears

By Patrick Bracher (ZA) on January 20, 2020 Posted in General

Section 129 of the National Credit Act requires the creditor to specify the default including the actual amount of the arrears. The requirement for ‘drawing the default to the attention of the consumer’ means more than just the fact that the consumer is ‘in default’. Section 130(4) gives the debtor an opportunity to remedy the … Continue reading

Incomplete or inaccurate record of agreement does not make it void (NCA extended warranties in issue)

By Patrick Bracher (ZA) on January 14, 2020 Posted in General

The Supreme Court of Appeal upheld the validity of extended warranties in respect of goods sold on credit under the National Credit Act 2005 despite the fact that the warranties were filled in incompletely or inaccurately. The evidence was that, despite the inaccuracies, the extended warranties were correctly applied and gave extended warranty cover for … Continue reading

Judicial oversight of execution against property requires full facts before court

By Riccardo Petersen (ZA) and Vishana Makan on July 3, 2019 Posted in Banking

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

By Riccardo Petersen (ZA) on April 4, 2019 Posted in General

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

By Riccardo Petersen (ZA) on October 3, 2018 Posted in General

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

By Patrick Bracher (ZA) on February 13, 2017 Posted in General

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

By Riccardo Petersen (ZA) on September 20, 2016 Posted in General

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

By Riccardo Petersen (ZA) on June 7, 2016 Posted in General

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

Extra-territorial application of NCA to offshore credit agreements

By Riccardo Petersen (ZA) on May 25, 2016 Posted in Banking

A settlement agreement concluded outside South Africa between a foreign company and a person resident in the United Kingdom that was concluded completely outside the South African credit market and has no bearing on accessibility to credit by South Africans or the nature of credit products available within South Africa does not “have an effect … Continue reading

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

By Aslam Moosajee (ZA) on May 5, 2016 Posted in Banking

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

A consumer who gets a section 129 notice cannot rely on fanciful technical points

By Aslam Moosajee (ZA) on March 10, 2016 Posted in Banking

The purpose of s129 of the National Credit Act (NCA) is to ensure that a consumer is notified of the default and of the various options available to the consumer. In Sebola v Standard Bank the Constitutional Court held that a credit provider can normally show compliance with s129 by: proving that the notice was sent … Continue reading

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

By Riccardo Petersen (ZA) on July 1, 2015 Posted in Banking

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

Acknowledgement of debt is credit agreement but once-off loan does not require a registered credit provider

By Riccardo Petersen (ZA) on February 20, 2015 Posted in General

The high court has confirmed that a simple acknowledgement of debt is a credit agreement as envisaged in section 8(4)(f) of the National Credit Act, 2005. But a credit provider who only enters into one such agreement does not have to register as a credit provider under the NCA even if the principal debt is more … Continue reading

Credit providers who overcharge may have to repay consumers

By Riccardo Petersen (ZA) on February 11, 2015 Posted in General

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