Tag Archives: Arrest

Cops Raid Illegal Credit Providers

NCR & Police Raid Credit Providers

The National Credit Regulator (NCR) and South African Police Services (SAPS) began June with a series of raids on various credit providers in Grahamstown, Somerset East, Fort Beaufort and Humansdorp.

The NCR is tasked with making sure that not only are people registered and reporting to them if they want to issue credit to consumers but also that credit providers stick to the law.  When they get reports that illegal activity is going on they work with the police to take action. The latest series of raids resulted in 4 criminal cases being opened against various individuals in the 4 different towns for breaches of the National Credit Act.

During the raids, nearly 700 SASSA and Bank cards, which were being illegally held by the credit providers raided, were recovered, as were 12 ID books.

It is illegal for a credit provider to ask you to hand over these items. If anyone asks you to give in one of these items when you try get credit then you should report the matter to the NCR and police. If you know of anyone among your friends or family who have had their ID or Bank or SASSA card taken by a Mashonisa then you should report it to the NCR (ph 0860 NCR NCR) or police.

A recent report says that perhaps as much as 1% of the country’s population are acting as illegal credit providers and often these unregistered individuals do not stick to the law. Firstly, they do not register with the NCR and secondly, they charge illegal rates and retain clients IDs and Cards illegally. At present, the NCR have only around 6000 registered credit providers but would like to be able to register more.

Recent legislative changes have seen it become harder for consumers to make use of the services of registered credit providers and when these changes were made Micro Finance South Africa (MFSA) who represent thousands of small NCR registered credit providers warned that the changes would simply drive consumers back into the arms of local illegal loan sharks.

The offenders who were swept up in the most recent raids now face fines or worse for breaking the law and the consumers involved could have (probably will have) their debts written off.