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National Credit Regulator (NCR) Explained

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National Credit Regulator

The National Credit Regulator (“NCR”) was established in terms of the National Credit Act 34 of 2005. The purpose of the NCR is to regulate and monitor South Africa’s credit industry, by promoting an accessible, transparent, and fair credit market. Credit bureaus, credit providers, payment distribution agents, alternative dispute resolution agents, and debt counsellors are all required to register with the National Credit Regulator. This article will mainly focus on the purpose and duties of the NCR.

The Purpose of the National Credit Regulator

The NCR has a responsibility to promote the development of fair and accessible credit markets. This is especially important for historically disadvantaged and low-income persons.

The NCR is tasked with registering credit providers, credit bureaus, debt counsellors, alternative dispute resolution agents, and payment distribution agents, while also ensuring their compliance with the NCA. The NCR also deals with complaints lodged by consumers regarding credit providers and credit bureaus. Usually, the NCR deals with complaints relating to credit, while complaints dealing with credit bureaus are lodged with an Ombudsman. 

Additionally, the NCR is also tasked with reporting to Parliament, on the availability of credit, access to it, market practices, and consumers’ over-indebtedness. 

The NCR has the authority to:

  • Investigate non-compliance,
  • Issue notices of non-compliance,
  • Prosecute non-compliance before the National Consumer Tribunal,
  • Refer complaints to the National Consumer Tribunal,
  • Request that the National Consumer Tribunal deregister a credit provider, debt counsellor, etc., 
  • Impose conditions for the registration of credit providers, debt counsellors, etc.
  • Research the credit market,
  • Propose policy or legislation to the government, and
  • Monitor access to credit

The Rights of the Consumer

A credit bureau is tasked with keeping a record of all consumers’ credit information and chooses how credit information may be used and who may be granted access to it. At present, there are 14 registered credit bureaus. 

When a consumer applies for a loan, the credit provider is required to do an assessment. This assessment involves requesting the consumer’s credit information which includes their credit history, financial information, and identity details. 

This information is provided to a credit bureau to compile a credit report which is used to decide whether the consumer will be able to afford credit. Credit information is also used to investigate fraud, corruption, and theft. It is also important in assessing whether an individual is suited for employment in positions handling finances and cash.

According to the National Credit Regulator, the duties of a credit bureau is to:

  • file information on your credit record after the fee is paid by the credit provider,

make sure the information is correct and not keep inaccurate information,

  • only keep information for the prescribed period and to a prescribed standard,
  • provide a report of the information – a credit report – when required by credit providers or anyone else who has your permission,
  • not charge for corrections or challenges to the information by you, the consumer, and
  • not make a negative judgment about you when they do not have any credit information.

A consumer has the right to request a free credit report from a credit bureau, once a year. Any additional requests will be subject to a small fee. It is also within a consumer’s right to dispute any information kept by a credit bureau. Furthermore, the consumer has a right to be informed by a credit provider that they intend to report negative information to a credit bureau, 20  days prior to doing so. 

All credit providers are required to register with the National Credit Regulator prior to commencing business. Consumers are advised to confirm whether the credit provider is registered prior to applying for credit. This can easily be done on the NCR’s website, where all registered credit providers are listed along with their unique registration numbers. This is to protect consumers from “loan sharks”, who are unregistered with the NCR. Loan sharks charge high-interest rates and make use of unlawful debt collection methods. Some even request consumers to pay a fee upfront, which is unlawful in terms of the NCA.

Like in the case of credit providers, debt counsellors are required to register with the NCR as well. Briefly, the debt counselling process involves a consumer completing an application form and submitting it, along with all the consumer’s credit agreements, for assessment. The aim of this is to assess whether the consumer is over-indebted. If the consumer is found to be over-indebted, the counsellor will be required to follow the necessary process prescribed in the National Credit Act. 

Lodging a Complaint

Complaints should only be lodged if the consumer has already attempted to solve the issue with the credit provider. If the matter has not been resolved, the consumer has the right to lodge a complaint with the NCR, who will either investigate the matter or refer it to an ombudsman, consumer court, or ADR. 

However, certain issues are outside the jurisdiction of the NCA, and as such the NCR might issue a notice of non-referral. Where a complaint lodged with the NCR was rejected, a consumer may lodge it with the National Consumer Tribunal. The NCR will refer any complaint relating to a criminal offence to the National Prosecuting Authority.

It is important for the conduct of credit providers, credit bureau and debt counsellors to be monitored to prevent any abuse of power and to ensure compliance with the National Credit Act. The NCR also urges consumers to educate themselves on their rights and duties in terms of the National Credit Act. There are numerous resources on their website, as well as free educational workshops offered around the country.