NCT Issue R1 Million Fine Against Shoprite Over Reckless Lending
The matter was brought before the NCT by the National Credit Regulator (NCR) after allegations were made that Shoprite was giving consumers credit without following all the legal requirements.
The National Credit Act says that before issuing someone credit, a credit provider needs to (1) figure out if the consumer can afford to repay it (an assessment) and has to (2) provide the consumer documents they can understand, and (3) provide a quote (pre-agreement) and then (4) contract documents which point out the entire cost of credit and (5) are signed by everyone.
The NCT found that when people were applying for credit with Shoprite they were granting credit based on the income of others in the household (like the applicant’s wife, husband or partner). The problem with that was that, in many cases, there was no actual proof of these other people’s income.
If a credit provider fails to do a full and proper assessment and fails to gather information they could realistically get (by looking over bank statements or drawing a credit record or by asking the consumer to supply the proof), then this is considered reckless and this applies even if the consumer is actually able to repay the credit.
The NCT handed down a R1 Million fine and has told Shoprite to find a Debt Counsellor to assist with figuring out if these consumers were or now are over indebted. This will presumably have a bearing on whether the debts are then set aside (the consumer doesn’t have to pay them or the credit provider has to pay them back whatever instalments they already paid) or not.