Q & A's on the National Credit Act

[Rebel]

Dave,

Yes "can" is like "may" - The NCA may be applicable if the end user is a "small" business ie below thresholds. Now you drag COD orders in - they fall outside the NCA definitions of credit agreements to start with. Should you not pay the COD and then interest is added it will come back under the NCA as incidental credit. The moment it is back under the NCA the sec 103 (5) in duplum is activated. As you know "reckless" does not apply to incidental.

Dave,

Lets talk about these "collection costs" (sec 101 g). The amount due at the point of default is the trigger that must not be overstepped. Say the service was for R 500 and the sec 101 (b-h) add on was say another R 100. The client default at that point with no payments then the max for default is another R 600. With this measure the NCR tries to put a stop to ginormous collection costs.

[duncan drennan]

Should you not pay the COD and then interest is added it will come back under the NCA as incidental credit. The moment it is back under the NCA the sec 103 (5) in duplum is activated.

What if you don't charge interest but you do charge collection fees - would that place it under the NCA?

[Rebel]

What if you don't charge interest but you do charge collection fees - would that place it under the NCA?

Dave,

2 elements bring a transaction under the jurisdiction of the NCA:
a. There must be a deferrement of a the full or portion of the capital
b. A charge, interest or fee must be levied for the deferral of a.

Your example falls outside as there is no b.

[Dave A]

So that would be goodbye to COD discounts, I guess.

[blues1974]

needing some advise! i had to apply for debt review or commit suicide, i went for debt review. i recently started but a few things worry me. firstly, my debt counsellor is charging me R4050 for his fee, then an additional R3500 for the court proceedings and now I start paying the nominated credit facility. is this the going rate as far as debt counsellors are concerned? do I start paying the NRC Distribution agency if they haven't been appointed by the court? my current cousellor said that my total monthly repayments will be R 7200. this number has not been approved by the court yet, where do I go from here as I need to start paying the Distribution agency as of this month! don't know what to do??

[Rebel]

Dear Blues 1974 - Firstly your DC should have enlighten you seeing that he charges you at the top of the rate suggested by the NCR. Secondly remember that the longer you delay the bigger the balance as DC does not stop interest on accounts. Start paying to reduce your own debt. If unsure send the monies directly to the credit providers - working through a PDA costs you even more - anything from R7.50 to R25.00 per instalment