On 2 September 2024, authorities clamped down on illegal credit providers who were “bullying” vulnerable consumers in De Aar and Loxon, Northern Cape. The joint operations involved the National Credit Regulator (NCR), in collaboration with the South African Police Service (SAPS) and South African Social Security Agency (SASSA), aiming to protect consumers from exploitation.
The operation in De Aar resulted in the arrest of 7 people, seizure of 81 bank cards, 41 ID books, 9 loan documents, 7 SASSA cards, and cash of R71 506,40. A similar operation on 6 August 2024 in Loxon, led to 3 arrests and the confiscation of 18 bank cards, 4 SASSA cards, 2 ID books and 1 SAPS identity card.
The operations targeted both registered and unregistered credit providers who unlawfully retain prohibited instruments in terms of the National Credit Act 34 of 2005 (NCA) which renders a criminal offence for any person to keep personal devices in terms of credit agreements. The National Credit Regulator (NCR) is committed to protecting vulnerable consumers, especially pensioners, from exploitation by credit providers.
The following contraventions of the Acts were picked up:
- Unregistered Credit Providers – Section 40(1) provides that credit providers must register if their total outstanding debt exceeds a prescribed threshold.
- Improper Affordability Assessments – In terms of Section 81(3), credit providers must not enter into reckless credit agreements. A credit agreement is reckless if the provider fails to conduct a required assessment before making the agreement.
- Reckless credit granting – The suspects contravened section 81(3) by failing to conduct proper affordability assessments and extended credit recklessly to consumers.
- Failure to Provide Credit Agreements – Not delivering credit agreements in the prescribed form as per Section 93(1).
- Overcharging of interest – In terms of Section 100(1)(c), the credit providers cannot charge interest exceeding the maximum allowed under the NCA.
- Unlawful possession of consumers’ instruments – According to Section 133(1)(a), credit providers are prohibited from using certain documents or instruments mentioned in Section 90(2)(1) to collect or enforce a credit agreement.
Tebogo Ntsimane, Manager for Investigations & Enforcement at the NCR, emphasized that these operations are part of the NCR’s ongoing strategy and efforts to ensure compliance with the NCA. In terms of Section 54, the NCR has the authority to issue directives to unregistered credit providers directing them to stop engaging in illegal activities. Consumers are advised to complain with the NCR should they be a victim of card retention or any other illegal practice by a credit provider at complaints@ncr.org.za.