Truworths, Foschini & Mr Price Win Battle Against NCA

Salary Slips No longer Needed When Applying For Credit?

After a long court battle Truworths, Foschini and Mr Price have got the High Court to rule that the National Credit Act’s requirements that a consumer provides a salary slip when applying for credit are unreasonable and impractical.

Though credit providers want to know how much a person earns the court case hinged around those consumers who do not formally receive a salary slip and their right to access credit.

In the past, the NCA & Regulations basically said: No pay slip = Reckless Credit. Now the Western Cape High Court has said that the NCA and Regulations should not demand this and thus deny some consumers who don’t have salary slips access to credit.

Truworths, Foschini and Mr Price were quick to add that they still want salary info from consumers but if the situation arises that a consumer doesn’t have one (a pay slip) it will no longer prevent them from offering the consumer credit based on other aspects of their assessment (eg. the consumers income might reflect on their 3 months bank statements).

Also raised was consumers who did not even have a bank account but wanted credit. They would thus not be able to provide several months worth of statements to be used in a credit affordability assessment.

The ruling is in the Western Cape High Court and it may, therefore, be taken to Supreme Court of Appeal if/when the DTI and NCR want to argue the matter further.

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