What is reckless lending & have you been a victim?

Do you get nervous when you hear the terms 'credit score check', 'credit bureau clearance', or 'blacklisted'? Does your debt seem like an insurmountable hurdle that keeps you from reaching your potential in life? If so, you may have been the victim of reckless lending. Today we take a look at this unscrupulous business practice and what it means for the South African consumer.

What does ‘reckless lending’ mean in the South African context?

The National Credit Act safeguards the rights of consumers in South Africa. According to this legislation, credit providers should take great care when extending credit. They are not allowed to extend credit to someone who will not be able to make the repayments. Here are some of the responsibilities a credit provider, such as a bank, has when they let you sign on the dotted line of a credit agreement:

They have to conducts a comprehensive affordability assessment to determine whether you will be able to afford the repayments of the loan. They have to ensure that you fully understand and acknowledge the risks, costs and obligations of the credit agreement into which you are entering. They have to be sure that you will not become over-indebted as a result of entering into the credit agreement in question.

How do I know if I have been a victim of reckless lending?

If you can answer yes to one or more of the statements below, you may have been a victim of reckless lending, and should seek the support of a qualified debt counsellor to address the situation:

I took out credit after 2007. My credit provider did not perform an affordability assessment. I did not understand the extend of my repayment responsibilities. I fell in arrears with my repayments even though my financial circumstances did not change. I am now over-indebted due to the credit that was provided to me.

Would you like to find out more about reckless lending and whether your experience has made you a victim of unscrupulous business practices? Get in touch with a Libertine Consultants representative today. We offer a range of debt services and credit services that have been tailored to look out for the interests of the South African consumer. Let us help you pave the way to a more prosperous future.