NATIONAL CREDIT ACT

The National Credit Act (NCA) came into effect on 1 June 2007, and has since replaced the previous Credit Agreements Act and Usury Act. The objective of the Act is to promote and advance the social economic welfare of South Africans by:

• Endorsing a fair and transparent credit market;
• Encouraging a competitive, responsible and sustainable credit market;
• Supporting an accessible, efficient and non-discriminatory credit market;
• Combating over-indebtedness of consumers;
• Providing consumer education and protection.

The Act classifies different customer types as being either within the Act or outside the Act, and also distinguishes between small, intermediate and large agreements.

As a responsible lender, Chrysler Finance and *Insurance, a division of Mercedes-Benz Financial Services, is a registered Credit Provider that complies and adheres to the NCA, because we believe in a fair and transparent credit market. Chrysler Finance and *Insurance has introduced various new processes and systems to fully support the NCA, and you can obtain NCA compliant advice from any of our Chrysler Dealerships nationwide.

Attached below are some Frequently Asked Questions (FAQ’s):

1. To whom does the NCA apply?
   
   The Act applies to all Credit Providers. They must be registered in terms of the Act as recognised lenders. The Act also applies to all private individuals, sole proprietors, trusts with less than three trustees and juristic persons with asset value less than R250 000 or turnover less than R1 million.
   
   
2. What impact does the NCA have on me as a consumer?
   
   Credit Providers are restricted in terms of allowable fees, interest rates and inclusions in a credit agreement, and need to be fully transparent with no hidden costs, clauses etc. There is also a huge onus on the Credit Provider to ensure that the consumer can afford the debt, thus reducing over-indebtedness. This is achieved by asking additional questions at the point of sale regarding your detailed income and expenses. A Credit Provider now also needs to take disposable income and not only gross salary into consideration when granting credit.
   
   
3. What is a Pre-Agreement Quote?
   
   A Credit Provider has to provide the consumer with a Pre-Agreement Quote that states the full terms and conditions of the actual agreement. This Pre-Agreement Quote should be 100% similar to the actual agreement and is valid for a 5 day period. It should be presented to and signed by the consumer prior to entering into the actual agreement.
   
   
4. What documentation will be required when applying for credit?
   
   
   • Your green bar-coded ID;
   • Detailed proof of income and expenditure;
   • Proof of residence (e.g. water and electricity bill).
     
     
5. How do I know if the consultant I am dealing with is competent in terms of the NCA?
   
   Credit Providers are required to ensure that their staff and agents are accredited and familiar with the requirements of the NCA. Accredited agents will have a National Credit Regulator (NCR) ID card that they should present to you as proof that they have been accredited.
   
   
6. How can I obtain a copy of my personal credit record?
   
   You may obtain a free credit report annually from any credit bureaux in the month of your birthday. Additional reports may be obtained at an additional cost.
   
   
7. What happens if my application for credit is declined?
   
   A credit provider needs to provide you with a reason, in writing, why your application for credit has been declined.
   
   
8. Is it required to pay a deposit for a new vehicle?
   
   The NCA allows you to enter into a credit agreement without paying a deposit to the Credit Provider. This is however subject to Credit Approval and will vary depending on the application.
   
   
9. May any Credit Provider ask you to waiver your rights under the NCA for whatever reason?
   
   You should not sign any document that is blank and you are not required under any circumstances to waive your rights under the NCA.
   
   
10. Will the NCA protect me as a consumer under all circumstances?
    
    The Act has provided remedies for some level of protection such as Debt Counciling and Debt Restructuring. Should you misrepresent details of your income and expenditure to the Credit Provider, you will not be able to seek protection from the Act for over-indebtedness.
    
    
11. What penalties may the Credit Provider charge should I wish to settle my debt early?
    
    For small and intermediate agreements no penalties may be charged, but on large agreements up to 90 days interest may be charged. Capital reductions may however be done at any stage without attracting penalties or additional fees.
    
    
12. How can I obtain more detailed information on the NCA?
    
    Visit www.ncr.org.za

*Chrysler Finance and Insurance is an Authorised Financial Services and Credit Provider, and is underwritten by Regent Insurance, FSP no. 25 511, and Regent Life Insurance, FSP 18 146.