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Consumers become aware of their financial rights
2007/09/10
Many South Africans have grasped the lifelines offered by the New Credit Act with both hands, although there is still a certain amount of confusion over exactly what the Act means for them. Within a month of the Act’s institution at the beginning of June, Europ Assistance SA’s 24-hour legal call centre, reported a 24 percent increase in calls relating to it.
“This was not unexpected,” says Mageshlin Govender, the call centre manager, “as the effect of the new Act filtered down to consumers via television, newspaper and radio media, we geared up to take more credit related calls.” In fact three of the company’s lawyers also recently qualified as debt counsellors. These legally empowered counsellors assist when the debts are higher than the income, and people need help in calculating how best to pay off the seemingly insurmountable debts.
“As opposed to the scenario presented in June 2007, July 2007 shows a positive growth in terms of the number of calls related to the field of Consumer Credit.
"Consumers are indeed becoming more aware of their rights as offered by the Act,” adds Govender. In general, the type of questions posed by consumers focus on the area of credit agreements, and more importantly the recollection of outstanding credit by unscrupulous debt collectors. Of the total number of calls, enquiries regarding debt collectors and ITC blacklisting feature extensively. They account for 59% and 25% of the calls respectively.
Some of the questions focus on issues of borrowed money and the inability to pay the amount back and it has to be explained that the Act does not apply to credit agreements entered into before 1 June 2007. Other questions involve credit lenders who do not supply credible information or what to do in the event of credit providers refusing further credit without offering a reason for the refusal.
“With the shocking statistic that 77 000 judgments are issued monthly in SA, we encourage consumers to save, use cash when making purchases and avoid unnecessary credit,” advises one the company’s debt counsellors, Izanre Piek.
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