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Thread: National Credit Act practical implementation

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    Site Caretaker Dave A's Avatar
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    National Credit Act practical implementation

    I've just been discussing the practical aspects of implementation of the National Credit Act with a debt collection agency. Some aspects still need to be cleared up, but there has been some progress.

    Additional regulations were published on 30th November 2006 which deals with much of the administrative issues. The relevant Government Gazette can be found here.

    I've done a quick skim - it does clear up quite a few issues in respect of blacklisting. When I get a chance, I'll post a summary of the implications.
    The trouble with opportunity is it normally comes dressed up as work.

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    Silver Member Eugene's Avatar
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    Despite the government gazette update of November which cleared up some issues regarding blacklisting, much confusion still exists regarding the practical implimentation of the act after 1 June 2007 - especially in the debt collection industry. For example: if I buy goods from a furniture retailer on 31 May 2007 (a day before the Act kicks in) and I refuse to pay the following month (when the new Act is in operation). Will the old Credit Agreements Act conditions still be in force as it has been repealed by the new Act? How will defaulting consumers then be summonsed (as usual in terms of the "old" Act or the new Act or a combination of both?) With regards to the statutory letter of demand (as contemplated in the "old" section 11 of the Credit Agreements Act): will that time frame of 30 days still be in force or will it have to be changed to the new time limits of the NCA? These are just a few questions which seems to be unanswered - even a call to the legal department of the National Credit regulator could not give me clear and simple answers. Can anyone help?

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    Site Caretaker Dave A's Avatar
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    I think there's going to be fair amount of "winging it" during this change over.

    Here's something I got from Standard Bank.
    The National Credit Act (NCA) comes into effect in June 2007. The act is designed to better regulate all players in the credit market as well as to improve consumer protection. All loans granted by us to personal customers, and in some cases to those seeking business banking services, will be governed by the new act after June 2007.

    We fully support the objectives of the NCA and have, over the past 12 months, been preparing to comply with the new legislation. As a result, some of our processes will change from June 2007 and you may be affected by the following:
    • We may ask you for additional information when you apply for a new loan. In this regard, we encourage you to bring documents such as copies of payslips, bar-coded identity documents and proof of residence with you when you apply for a loan.
    • We are required to ensure that you understand the risks, obligations and costs associated with any loan. Our consultants will explain these in detail to you when you apply for a loan.
    • Some of our application forms and documents have also been changed.

    If you have any questions or need more information, our branch staff will be able to assist you. Further details are (blah, blah)
    You know what - that doesn't sound like much more than business as usual. But I'll try to snaffle a copy of the "new" fine print and see if anything's changed really. I've got some finance docs to sign on Friday...

    I think the wrinkles on the real practicalities are only going to really shake out down the line. My best suggestion is that we all keep a sharp eye out for anything really useful and help each other's response time in adjusting to any revealed kinks.

    From my side, I'll try to do some more homework on this over the coming weekend (or earlier if I catch a break to do some work on it).
    The trouble with opportunity is it normally comes dressed up as work.

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    just me duncan drennan's Avatar
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    Eugene I wish I could give some insight, but I'm not too clued up on the issues. I suspect that some things will only be clear once they have been tested in court

    I'm not sure if it will help, but maybe follow the links here to have some info sent to you.
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    just me duncan drennan's Avatar
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    Quote Originally Posted by Eugene View Post
    These are just a few questions which seems to be unanswered - even a call to the legal department of the National Credit regulator could not give me clear and simple answers. Can anyone help?
    So how did that call with the National Credit regulator go?
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    Silver Member Eugene's Avatar
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    Apart from a couple of eish's and long silence, I was none the wiser.

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    Site Caretaker Dave A's Avatar
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    I think that seals it. Hidden obstacles ahead I reckon.
    The trouble with opportunity is it normally comes dressed up as work.

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    just me duncan drennan's Avatar
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    Quote Originally Posted by Eugene View Post
    Apart from a couple of eish's and long silence, I was none the wiser.
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    I do not believe the NCA is such a monster, it has and will unfortunately create a lot of misunderstandings especially with some clients and the media unfortunately does play a major roll in this misinformation in that only the half of the story that has news value would be published. Yes the Act in itself still will have to be tested in courts whom I believe is at present as confused as many of the public. Who the Debt Counselors will be and the exact roll they will play considering their expertise is also still to be seen

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    just me duncan drennan's Avatar
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    Hi Johan, welcome to the Forum Nice to have you here.

    Quote Originally Posted by Johan View Post
    I do not believe the NCA is such a monster
    I think the tricky thing for most people at the moment is that it is an unknown monster. It seems to be a good thing, but there are a few questions around how it can impact on our business. Does it mean that debtors can worm out of paying us, etc? It seems to be consensus that we'll have to wait for some case law to clear up the details.
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