The National Credit Regulator (NCR) can in terms of Section 16(1)(b)(i) of the National Credit Act 34 of 2005 (the Act), provide guidance to the credit market and industry by developing explanatory notices on the interpretation of the Act. Section 109(4) of the Act also enables the NCR to issue guidelines for determining whether a statement of account meets the statutory standards outlined in Section 109(3) of the Act.
The purpose of the guideline published in September 2024, (NCR 004/2024 – Guidelines for the form and content of statements of account) is to guide the credit market on the form and content of statements of account for credit agreements, in terms of Section 109 of the National Credit Act.
The guideline addresses the requirements for Statements of account for all types and categories of credit agreements that must comply with the requirements of the Act.
The Act also defines what constitutes small, intermediate, and large agreements based on, among other factors, the type of transaction and the principal debt involved. The statutory provisions outlined in the Act specify the requirements for statements of account for different types of credit agreements. In general, the content of the statements may not include prohibited charges and may only contain amounts directly related to the credit agreement, therefore excluding any costs associated with unrelated products/services.
Small credit agreements
For small credit agreements, account statements must be the prescribed form and meet prescribed requirements of regulation 35. Regulation 35 details the specific information that must be included in statements for small agreements, such as the credit provider’s and consumer’s details, statement date, period covered, details of the agreement like the principal debt, interest rates, instalment amounts, and a summary of transactions.
A statement of account for a small agreement should only include costs specified in sections 101 and 102 of the Act, excluding prohibited charges mentioned in section 100, such as premiums for funeral policies, club or membership fees, and costs for value-added services.
Intermediate and large credit agreements
For intermediate and large credit agreement account statements there is no prescribed form, or a form can determined by the credit provider, but it must meet meets prescribed requirements of the Act.
The content of a statement of account for intermediate and large agreements must comply with the Act’s requirements, not include costs beyond those in sections 101 and 102, avoid prohibited charges from section 100, and exclude costs for funeral policy premiums, club memberships, and value-added services.
The Guideline comes into effect immediately. The NCR will monitor compliance with this Guideline and will take appropriate enforcement action for any failure to comply with the provisions of the Act, including this guideline which takes effect immediately. For more information, questions or clarity regarding this guideline, please contact the Executive Legal Unit at ExecutiveLegalUnit@ncr.org.za