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What Are The Provisions Of The National Credit Act Of South Africa

June 28, 2012 | Comments: 0 | Views: 194

The National Credit Act was promulgated in South Africa in the year 2005. Its main goal is to promote the social and economic welfare of the people of the nation, and to protect their rights in the credit market. Another chief objective of the Act is to regulate all credit agencies like debt counselors, credit providers and credit bureaus and to provide a transparent and fair credit market.

There are scores of individuals and families in the nation that are deep in debt and need professional assistance to get out of their financial situation. The Act ensures that such people get assistance from debt counselors who can guide them and arrange for revised monthly repayments with their credit providers. It also encourages people to be more responsible with their finances and prevents them from being over-indebted.

The National Credit Act stipulates that all credit providers offer information on credit agreements in simple language and standardized terms so that consumers can understand them easily. This would enable consumers to compare the agreements among different credit providers and choose the ones that offer the best deals.

The Act also regulates the type of information stored by credit bureaus about consumers. It stipulates the time period for which a bureau can store the information, and how that data can be obtained and used by other agencies. The main emphasis is on maintaining accurate information so that it facilitates whole the credit process.

Since there is a wide array of credit products like personal loans, overdrafts, cards, and various accounts, the Act ensures that each product is treated and handled uniformly by different credit providers. It also established the National Credit Regulator (NCR) which is the body that enforces the regulations of the Act and ensures compliance by the various agencies. All credit agencies are required to register under the NCR to operate legally in South Africa.

The establishment of the NCR under the Act enables consumers to voice their grievances and lodge complaints against service providers in the case of disputes. The Act has also established the National Consumer Tribunal, an independent consumer court, to hear cases and to resolve them amicably.

The National Credit Act regulates a wide variety of entities like banks, micro-lending services, businesses & corporations that do business on credit or loans. The Act therefore covers the entire credit industry and ensures that its provisions are enforced correctly to benefit the consumer.

To learn more about the National Credit Act 2005 of South Africa, please visit http://www.nationalcreditactinfo.co.za/

Source: EzineArticles
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