YOUR LEGAL RIGHTS UNDER THE NCA

Speaker (0:00): Welcome to the official podcast from mycreditstatus.co.za. We will be introducing you to credit experts who will be providing valuable insight and advice from your financial health to improving your credit status and score. Your host for the show is Laura Palmieri.

Laura Palmieri (0:20): Hello and welcome to mycreditstatus podcast. In today's episode, we'll be discussing consumers rights in terms of the National Credit act. Our guest today is Gerrit Viviers, who's the National Credit specialist for Moonstone compliance and risk management and he's also our compliance officer at mycreditstatus. Gerrit is an admitted attorney of the High Court and holds a bachelor's of Accounting and Bachelors of Law degree from the University of Stellenbosch. Welcome, Gerrit.

Gerrit Viviers (0:48): Hi Laura, glad to be with you guys.

Laura Palmieri (0:52): Great for me to finally actually meet you. Okay, let's start off. Gerrit can you briefly explain to our audience what is a National Credit specialist? What is your main function? And what actually do you do? if you can

Gerrit Viviers (1:09): If I cannot, I can't even explain it to my parents, I don't think they know exactly what I do. Laura, in essence, what I do is more of a compliance function, and specifically focused on a National Credit act. So we've got different types of registrants that we assist with compliance. And if I'm going to refer to the NCA, it means the National Credit Act. So our main client base at this stage is credit providers, micro lenders, vehicle asset financiers, medical services companies, anybody that sells a product or gives a loan on credit. On top of that, we have a specific focus on what they call a reseller credit bureau, which is quite a recent thing within the credit industry. And mycreditstatus is also registered as a reseller credit bureau. So that's more or less the main focus and to just assist you guys with what is the requirements in terms of that and actually figuring out how we can comply with those requirements and through the process, monitor and document our compliance with the NCA.

Laura Palmieri (2:22): So realistically, what you're actually doing is you're making companies like ourselves mycreditstatus, we are acting within the law. So we providing the correct information as per the National Credit Act. You looking after us to make sure that we're protecting the consumer.

Gerrit Viviers (2:41): Exactly. Look to be honest, and I think this is something that we must mention is the fact that the NCA doesn't require you to appoint a compliance officer. That's a completely optional thing. So by having a compliance officer on board should actually give the consumers a bit more assurance that you're actually dealing with a company that they are acting responsible for, and they want to comply with the act. And that's something that I think is very admirable

Laura Palmieri (3:08): Yes, that's true, especially considering the paperwork involved. But at the end of the day, you're right, we at least are compliant. And we have you on board, to look after us. Ok, the National Credit Act is aimed at protecting the consumer. it affords consumers with various rights, one of which is the consumers right to apply for credit. Can you briefly explain this to our audience?

Gerrit Viviers (3:32): In essence you can't necessarily prohibit somebody if you're credit, provider you cant prohibit somebody to apply for credit. And you specifically, you can, for example, limit that to a specific, for example, employer giving out loans to the employees, that's one example. But you can't just outright say sorry, you can't apply for credit thus with us, and based on that as well. But you don't need to take into consideration as well. Whether or not you apply for credit doesn't necessarily mean that a credit provider should grant you credit there are certain aspects like for example, affordability, your credit report, your credit history, on the credit report, everything that they take into consideration to assess the risk, and whether or not they are willing to take that risk to provide you with credit. So although you've got the right to apply doesn't necessarily mean that you've got the right to receive the credit.

Laura Palmieri (4:28): So what I'm assuming is so if you do apply, and you're declined, you also need to be given the reasons why

Gerrit Viviers (4:34): That is exactly what needs to be done, so if and specifically also enacted that when a credit provider refuses you credit, they need to provide you with the dominant reasons for refusing that credit, that can for example, be as I said based on your affordability assessment, and in short, what that means is that where they take your gross income, they subtract all your deduction or your expenses. Including the debt repayment history on your credit report then they get to a discretionary income. And they need to compare that with your proposed monthly installment of the credit agreement. If the proposed monthly installment exceeds your discretionary income, that will mean that you can't afford the loan. And should they then provide with the loan it would be reckless on their side. So if that is the case, and they refuse it on that basis, they need to provide you with the reasons that it was for affordability purposes. Another reason for example would be and that's where you guys come where there is adverse information on a credit report, for example, like the judgment or adverse listing that we made, or for example, if the consumer is under debt review, and if that's the basis on which they declined the application for credit, they need to explain it to you, they need to provide you with that reason, if it's something specifically on the credit report, they also need to provide you with details of the credit bureau from which they take the credit report and just for interest sake, in your instance, as a reseller Bureau, you guys will obtain your credit information from a full credit bureau like TransUnion and Compuscan and XDS and Experian and CPB those are the six ones that are permitted to to retain the consumer profile payment profile information. And so and your responsibility is just to advise the consumer of the bureau where you obtain that specific credit information. And then they can go and they can dispute it at the credit bureau if it's not accurate. So

Laura Palmieri (6:40): I think this is where a lot of companies fall short in actually getting the providing proper information to their to the clients.

Gerrit Viviers (6:48): Agreed.

Laura Palmieri (6:50): That's why we have a podcast that's helps to educate the people. Okay. With regards to the consumers, right, the protection against discrimination in respect of credit, what exactly does that mean? And what does the discrimination apply to?

Gerrit Viviers (7:07): That's a long one. If you go specifically new have a look at the our constitution as well. You can't directly or indirectly discriminate on any person on the grounds, being race, gender, sex, pregnancy, marital status, sexual orientation, disabilities, religion there is a long list. And the fact that the thing that specifically states is and again, it pertains to when you do an affordability assessment when a credit provider decides whether or not he wants to grant credit to you, he can't base his decision or change his decision based on any of those grants that I have listed before. Even if you look at, for example, something that I pulled off earlier is the fact that because somebody is now of a different religion of you, now you charge him a higher interest. That's prohibited. Luckily, I haven't seen something in practice. But that's definitely something that could potentially happen. And that's why this, the consumers are specifically protected in terms of the NCA that it shouldn't happen. So that's in a nutshell, what that specific right entails.

Laura Palmieri (8:28): I never knew that it comes in is that it actually, there's so much protection with regards to the discrimination.

Gerrit Viviers (8:35): And it's something from a compliance perspective, it's very difficult to monitor as well. Because it's all value driven. It's not like a rule by type of assessment that you can do. For me, as a compliance officer, as well, I try to understand the culture of my clients, I have management discussions with them. And on that basis, we normally have a level of comfort that look here he is comply with this specific or, actually provide the consumers with those type of rights. But it's something that you can very quickly pick up especially as a consumer as well. You will know, if somebody is discriminating against if a credit provider is discriminating against you, that's very interesting, actually. Okay,

Laura Palmieri (9:16): we've noticed that my credit status that one of the main stumbling blocks for consumers is understanding the information on their credit reports. So we've simplified it for them and to help them better understand, but there is the right to information in plain and understandable language. Can you go through this for us?

Gerrit Viviers (9:34): Definitely Laura that's also a bit of a difficult one. And the main aim in my opinion for that specific right is to do away with legal jargon, and specifically your credit agreements. Now being a lawyer. I can write a very long letter or a very, very long credit agreement. That sounds extremely, look here I have

How can I put it gently now

it's almost something where you sound very important when you write it or the manner in which you write it. But the fact of the matter is, it's, it's actually very simple concept that needs to be explained. So I lawyers like to overcomplicate things. And I'll be the first one to admit that. But the act specifically requires you to provide the information and as well in a quotation and a credit agreement in a very plain understandable language. And that's also where the credit provider will need to make sure that they understand their target market. And that's why just in short business loans, for example, where the borrower, is a juristic person, and the loan amount is in excess of R250,000, just to give you one example, that falls outside the application of the NCA, because often those guys would have a legal team and they can, they can use their legal jargon in their credit agreements, make sure that they, you've got somebody that knows what what the specific clauses entails. But for the general consumer on the street, you need to explain it a bit more clearly. And that's also that's one of the things that we also focus on is when we sit with our credit provider clients, as we go through the documentation, and we make sure that it is written in a simple language and specifically for the target market.

Laura Palmieri (11:25): So I personally think in some circumstances it is actually suits them to to have it in that in a complicated manner, because they just want you to sign in some manners, it's like, and also the consumer sometimes feels like they feel inadequate, that they don't want to seem like that they don't know what they signing what it means. So they'll sign it because they want that loan.

Gerrit Viviers (11:47): Exactly. And to be honest with you, I often and I think it's also a fear of that you come across that you don't know what is being explained to you or that is written and, and sometimes myself as a lawyer, often if there's something that I'm not familiar with, it's easy to say yes accept it, just do not go under scrutiny for why I don't understand what's written.

Laura Palmieri (12:11): Yes.

Gerrit Viviers (12:13): So but that's why it's very important in informal credit report perspective, and that doesn't this one doesn't specifically necessarily the likes the credit reports. But something that I've seen, often not even from consumers, also from credit providers is that the credit report, it's difficult to interpret exactly what's going on. So by making it easy, and then citing it employment understandable language on this specific credit report, that will assist the consumer. That's definitely something that everybody within the credit market can strive towards.

Laura Palmieri (12:48): So yeah, that is really one area that we worked hard on, because it's it's all very well supplying the credit report. But if that consumer can't understand it, they just see the high numbers and they go, Well, what they don't understand what a judgement means they need to be explained so that they understand

Gerrit Viviers (13:01): exactly. Something that I've seen, debt restructuring is one of the things that's also a bit unclear often, because in the often the credit reports will refer to debt restructuring instead of debt review. Were debt restructuring could also potentially mean but look here I am on a bit of trouble I went for consolidation loan. And now my debt it is restructured to one credit provider, but often he paid off all the other creditors. And it's difficult to interpret. And that's not again, it's not only the consumers that have difficulties with this it is also the other users and the credit providers. I would even imagine the counselors in certain sense that might have issues interpreting some of the credit reports.

Laura Palmieri (13:47): Agree on that one. Okay, so what are the consumers rights in terms of terminating or settling an agreement or making early payments.

Gerrit Viviers (13:55): In short, you can do it at any time. If you want to early terminate or make an early payment, you can make it You must just ask the credit provider specifically in terms of the settling of the agreement to provide you with a quote they will often then provide you with the quote in a very short amount of time after that it will when its up until the time that is available or when it's when it can be made. And specifically in terms of early payments as well. There's nothing in the act that prohibits you from making an early payment, even if you are on a debit order with the with the credit. You can still if you've got an extra R500 or R1000, or whatever the case might be, you can pay it off. And that immediately needs to be allocated towards first the interest then all the fees and then the capital or the principal debt that is outstanding.

Laura Palmieri (14:46): So I wonder how many times that actually happens in certain circumstances.

Gerrit Viviers (14:53): Excuse me, Laura, I didn't get that quite clearly

Laura Palmieri (14:55): I wonder how many times that actually happens in the sense of do they always apply that in the sense of allocating it to your account or allocating to the interest or?

Gerrit Viviers (15:05): Luckily, that's a good question. And you should ask that questions. Often what what happens is, if you look at some of the clauses, you'll see that it's up to the not necessarily the credit provider, but whomever you have to repay, that it's in the their discretion to where they want to allocate the payments to. And that's, that's prohibited in terms of the NCA, there is no discretion, you know, it must go first to interest then to the fees and then to the capital of the principal. That's outstanding. So that's the manner in which it needs to be allocated.

Laura Palmieri (15:41): Yeah, that's actually that's something that I think a lot I wasn't even aware of that we have to actually make note, if we in that situation, we make early payments, where is it allocated to?

Gerrit Viviers (15:53): That clauses must also be in your credit agreement. So unfortunately, you won't always you won't necessarily be able to see it on your on your statement or wherever. So it's difficult for the consumer to specifically take notice thereof, but the main thing is looking at your credit agreement to make sure that that specific sequence is stated in there, that's very important.

Laura Palmieri (16:17): That's true. It's actually making me think of some ideas what we can do for consumers today. Again, last question for today's podcast is what are the consumers rights in terms of accessing and challenging credit records and information on the credit reports?

Gerrit Viviers (16:31): Right, that is a very good question. I like, I used to work for one of the large credit bureaus, and this is something that's very near to my heart.

Laura Palmieri (16:44): So you are in a prime position, you know, the ins and outs,

Gerrit Viviers (16:48): yeah, more or less, always, you'll never know everything, but

Laura Palmieri (16:52): you've got a better understanding.

Gerrit Viviers (16:53): And yes we're always willing to learn so. So the shorter and the long, Laura what you can do is, let's say you go to the credit provider and now say to you, but look your loan has been declined based on the information in your credit report, They give you the contact particulars of the specific credit bureau, where you can lodge a complaint. The first thing is what a credit bureaus also needs to do and I'm just checking in terms of the rights to access your credit information, you as a consumer have the right to access your credit report from any credit bureau for free, once every year. So once every 12 months, you can get that for free. After that, you can access it by paying the prescribed fee, which I'm not going to go into the specific calculation, but it is limited. So that's really important than a lot of the credit bureaus what they now currently trying to do is they'll actually give you access to your credit reports for free. Throughout the lifetime of your relationship with them too, that's definitely something that a consumers can, can utilize to make sure that they know what is going on on their credit report and that they in good credit standing, they've got a good credit score. And that translates into better interest rates when you apply for bond or for vehicle financing for short term loans or loans, whatever the case might be, so it actually saves you money. So please, please, please consumers make use of that service, go get it and make sure that you know what's going on on your credit report. In terms of challenging the record, so let's say now, in my example you sat with the credit provider, you've got a bad credit record, according to hi he gives you the contact details of the credit bureau. Now you can physically go to the credit bureau or you can phone them or email or access them their service online, you can obtain your credit report. And now you see for example, whoa, there's information on my credit report that is inaccurate or that is outdated. And you can dispute that. So you log a dispute with a specific credit bureau, they may ask you some questions to verify your identity. They can even ask you to provide you with an identity document or with your proof of address. And that's just to make sure that they are dealing with the consumers whose report that is in front of them. Okay, now, you you explain to them but look here , I have a loan with credit provider X, as I have already paid up, but it still reflects an outstanding amount. Now the credit bureau is got the responsibility to actually go to credit provider x and they need to investigate whether or not that information is indeed accurate and update. So they'll normally contact them and ask them to provide them with credible evidence, which based on the type of dispute that you're logging can be anything. In our case, for example, they might ask the credit provider to provide them with an updated statement showing that there is still an amount owing by you as the consumer to credit provider x And then this is the main thing what people don't always know or understand, the credit bureau has 20 business days to go and investigate this whole thing. And they need to resolve the dispute within the 21st. So from you from the date that you log the dispute and you provided, and they know that they are dealing with you as the consumer, and they have 20 business days to go to the Credit Provider do this whole process, if they if the credit provided ignores the credit bureaus request, or if they don't provide him with the necessary credible evidence proving that the information is accurate, the credit bureau technically has no other option than to remove that specific consumer credit information because of the fact that the validity there can't be verified. Okay. The flip side of it is now if the credit provider comes back and they provide you with the credit bureau with the statement showing that there is indeed an amount owing, then it means that the information and the credit bureau is indeed accurate. However what a credit bureau, then must do is they must provide the consumer with a copy of that of that specific credible evidence so then you will have the the proof in front of you that that indeed that information is accurate. And as everything in life, if you're still not satisfied with the service, you can always go to the credit ombuds or you can go to the National Credit Regulator to lay a dispute to make sure that the matter is investigated further.

Laura Palmieri (21:38): Bottom line is the consumer if they're in that situation, they must just persevere and get to the bottom and not give up.

Gerrit Viviers (21:44): They must and it's remember as well that's a free service that the credit bureaus must provide you with. Interestingly enough in terms of that is if there is a third party rendering these credit repair services, they technically not allowed to charge you any fee up until that date and time that service has been rendered completely. And often people forget like to charge you upfront about to assist you in in rectifying your credit ratings. And the only exception to that rule is it is if it is an attorney that actually is assisting you normally allowed to take the fees upfront but everybody else who is not a credit provider credit bureau can charge you a fee for for that credit repair service up until the time that the fee the service or actually

Laura Palmieri (22:53): fantastic I hope our audience taking note of that very important point you've just made okay Gerrit baia dankie thank you for joining our podcast today.

Ek kan nie die taal praat. And to our audience thanks for listening to mycreditstatus podcast Be sure to visit my creditstatus.co.za to join the conversation, access the show notes and discover our fantastic content. Thank you very much.

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