5.An agreement, in any form, but without an agreement in subsection 2, is a guarantee of credit when a person takes or gives himself, at the request of this agreement, an obligation of another consumer regarding a credit facility or credit transaction to which this Law applies. The parties are not in a position to enter into NCA contracts. The parties cannot agree that the lender will be released from its obligations or obligations to the NCA, nor that the lender can do anything illegal within the meaning of the NCA. Such a provision is invalid from the date on which it is purportedly effective. It is very easy for credit to create financial difficulties and destroy a household`s wealth. The additional borrowing to repay existing loans can lead people into a debt spiral from which they may find it difficult to escape. Over-indebtedness has a negative impact on families and, in some extreme cases, has even led to suicides within the family. Over-indebtedness continues to affect the workplace, can lead to dismotivation, absenteeism and even a propensity to steal. Some information about credit contracts concluded before the law came into force must also be provided.
This registry is available to anyone who requests it in the prescribed form. It will also provide a way to monitor South Africa`s debt, as the NCR is required to do. The law uses the term gender-neutral “ombude” (often referred to as mediator). The law provides that certain disputes between a financial institution (such as a bank) and a consumer arising from a credit contract may be referred to the appropriate ombudsman. The Ombudsman then acts as an intermediary between the institution and the consumer, with a complaint. Service charges are defined as a fee that can be charged by a credit provider at regular intervals (usually monthly) in relation to the routine administrative costs associated with maintaining a credit contract. The maximum service fee in the form of regulations is R50 per month or R600 per year. All categories and sizes of credit contracts are subject to the same maximum “flat rate” tax of R50. It appears that the service commission has been standardized to simplify the application of the law, which is justified by the fact that every loan, regardless of size, must be managed. Temperate contracts sell personal goods (such as furniture, clothing or a car), the price is paid in installments and the item is delivered to the consumer.
The consumer only becomes the owner when all payments are paid. Only a court can declare a careless agreement at the request of the debtor advisor or the consumer.