National Credit Act, 2005 (Act No. 34 of 2005)

Chapter 1 : Interpretation, Purpose and Application of Act

Part A : Interpretation

1. Definitions

 

In this Act-

 

"advertisement"

means any written, illustrated, visual or other descriptive material, communication, representation or reference by means of which a person seeks to bring to the attention of all or part of the public the nature, properties, advantages or uses of, conditions on, or prices of-

a)        goods to be purchased, leased or otherwise acquired;

b)        any available service; or

c)        credit to be granted;

 

"agreement"

includes an arrangement or understanding between or among two or more parties, which purports to establish a relationship in law between those parties;

 

"alternative dispute resolution agent"

means a person providing services to assist in the resolution of consumer credit disputes through conciliation, mediation or arbitration;

 

"applicable provincial legislation"

means legislation enacted by a province concerning credit agreements;

 

"Board"

means the governing body of the National Credit Regulator, established in accordance with section 19;

 

"Cabinet"

means the Cabinet referred to in section 91 of the Constitution;

 

"collection costs"

means an amount that may be charged by a credit provider in respect of enforcement of a consumer’s monetary obligations under a credit agreement, but does not include a default administration charge;

 

"collective agreement"

has the meaning set out in the Labour Relations Act, 1995 (Act No. 66 of 1995);

 

"complainant"

means a person who has filed a complaint in terms of section 136(1);

 

"confidential information"

means personal information that belongs to a person and is not generally available to or known by others;

 

"co-operative"

means an autonomous association of persons united voluntarily to meet their common economic and social needs and aspirations through a jointly owned and democratically controlled enterprise organised and operated on co-operative principles;

 

"consumer"

in respect of a credit agreement to which this Act applies, means-

a)        the party to whom goods or services are sold under a discount transaction, incidental credit agreement or instalment agreement;

b)        the party to whom money is paid, or credit granted, under a pawn transaction;

c)        the party to whom credit is granted under a credit facility;

d)        the mortgagor under a mortgage agreement;

e)        the borrower under a secured loan;

f)          the lessee under a lease;

g)        the guarantor under a credit guarantee; or

h)        the party to whom or at whose direction money is advanced or credit granted under any other credit agreement;

 

"consumer court"

means a body of that name, or a consumer tribunal, established by provincial legislation;

 

"continuous service’’

means the supply for consideration of a utility or service, other than credit or access to credit, or the supply of such a utility or service combined with the supply of any goods that are essential for the utilisation of that utility or service by the consumer, with the intent that, so long as the agreement to supply that utility or service remains in force, the supplier will make the service continuously available to be used, accessed or drawn upon-

a)        from time to time as determined by the consumer; and

b)        with any frequency or in any amount as determined, accessed, required, demanded or drawn upon by the consumer, subject only to any total use or cost limits set out in the agreement;

 

"credit"

when used as a noun, means-

a)        a deferral of payment of money owed to a person, or a promise to defer such a payment; or

b)        a promise to advance or pay money to or at the direction of another person;

 

"credit agent"

means a person appointed to represent a credit provider as contemplated in section 163, other than an employee of that credit provider;

 

"credit bureau"

means a person required to apply for registration as such in terms of section 43(1);

 

"credit agreement"

means an agreement that meets all the criteria set out in section 8;

 

"credit facility"

means an agreement that meets all the criteria set out in section 8(3);

 

"credit guarantee"

means an agreement that meets all the criteria set out in section 8(5);

 

"credit insurance"

means an agreement between an insurer, on one hand, and a credit provider or a consumer or both, on the other hand, in terms of which the insurer agrees to pay a benefit upon the occurrence of a specified contingency, primarily for the purpose of satisfying all or part of the consumer’s liability to the credit provider under a credit agreement as at the time that the specified contingency occurs, and includes-

a)        a credit life insurance agreement;

b)        an agreement covering loss of or damage to property; or

c)        an agreement covering-

i)          loss or theft of an access card, personal information number or similar device; or

ii)         any loss or theft of credit consequential to a loss or theft contemplated in sub-paragraph (i);

 

"credit life insurance"

includes cover payable in the event of a consumer’s death, disability, terminal illness, unemployment, or other insurable risk that is likely to impair the consumer’s ability to earn an income or meet the obligations under a credit agreement:

 

"credit provider"

in respect of a credit agreement to which this Act applies, means-

a)        the party who supplies goods or services under a discount transaction, incidental credit agreement or instalment agreement;

b)        the party who advances money or credit under a pawn transaction;

c)        the party who extends credit under a credit facility;

d)        the mortgagee under a mortgage agreement;

e)        the lender under a secured loan;

f)          the lessor under a lease;

g)        the party to whom an assurance or promise is made under a credit guarantee;

h)        the party who advances money or credit to another under any other credit agreement; or

i)          any other person who acquires the rights of a credit provider under a credit agreement after it has been entered into;

 

"credit regulator"

means a provincial credit regulator or the National Credit Regulator established by section 12;

 

"credit transaction"

means an agreement that meets the criteria set out in section 8(4);

 

"credit co-operative"

means a co-operative whose predominant purpose is to offer financial services to its members;

 

"default administration charge"

means a charge that may be imposed by a credit provider to cover administration costs incurred as a result of a consumer defaulting on an obligation under a credit agreement;

 

"developmental credit agreement"

means a credit agreement that satisfies the criteria set out in section 10;

 

"discount transaction"

means an agreement, irrespective of its form, in terms of which-

a)        goods or services are to be provided to a consumer over a period of time; and

b)        more than one price is quoted for the goods or service, the lower price being applicable if the account is paid on or before a determined date, and a higher price or prices being applicable if the price is paid after that date, or is paid periodically during the period;

 

"educational loan"

means-

a)        a student loan;

b)        a school loan; or

c)        another credit agreement entered into by a consumer for purposes related to the consumer’s adult education, training or skill’s development;

 

"effective date"

in relation to any particular provision of this Act, means the date on which that provision came into operation;

 

"emergency loan"

means a credit agreement entered into by a consumer to finance costs arising from or associated with-

a)        a death, illness or medical condition;

b)        unexpected loss or interruption of income; or

c)        catastrophic loss of or damage to home or property due to fire, theft, or natural disaster,

affecting the consumer, a person who is dependent upon the consumer or a person for whom the consumer is financially responsible;

 

"equality court"

has the meaning set out in the Promotion of Equality and Prevention of Unfair Discrimination Act;

 

"incidental credit agreement"

means an agreement, irrespective of its form, in terms of which an account was tendered for goods or services that have been provided to the consumer, or goods or services that are to be provided to a consumer over a period of time and either or both of the following conditions apply-

a)        a fee, charge or interest became payable when payment of an amount charged in terms of that account was not made on or before a determined period or date; or

b)        two prices were quoted for settlement of the account, the lower price being applicable if the account is paid on or before a determined date, and the higher price being applicable due to the account not having been paid by that date.

 

"initiation fee"

means a fee in respect of costs of initiating a credit agreement, and-

a)        charged to the consumer by the credit provider; or

b)        paid to the credit provider by the consumer upon entering into the credit agreement;

 

"inspector"

means a person appointed as such in terms of section 25(1)(a);

 

"instalment agreement"

means a sale of movable property in terms of which-

a)        all or part of the price is deferred and is to be paid by periodic payments;

b)        possession and use of the property is transferred to the consumer;

c)        ownership of the property either-

i)          passes to the consumer only when the agreement is fully complied with;

or

ii)         passes to the consumer immediately subject to a right of the credit provider to re-possess the property if the consumer fails to satisfy all ofthe consumer’s financial obligations under the agreement; and

d)        interest, fees or other charges are payable to the credit provider in respect of the agreement, or the amount that has been deferred;

 

"juristic person"

includes a partnership, association or other body of persons, corporate or unincorporated, or a trust if-

a)        there are three or more individual trustees; or

b)        the trustee is itself a juristic person,

but does not include a stokvel;

 

"Land and Agricultural Development Bank"

has the meaning set out in the Land and Agricultural Development Bank Act, 2002 (Act No. 15 of 2002);

 

"lease"

means an agreement in terms of which-

a)        temporary possession of any movable property is delivered to or at the direction of the consumer, or the right to use any such property is granted toor at the direction of the consumer;

b)        payment for the possession or use of that property is-

i)          made on an agreed or determined periodic basis during the life of the agreement; or

ii)         deferred in whole or in part for any period during the life of the agreement;

c)        interest, fees or other charges are payable to the credit provider in respect of the agreement, or the amount that has been deferred; and

d)        at the end of the term of the agreement, ownership of that property either-

i)          passes to the consumer absolutely; or

ii)         passes to the consumer upon satisfaction of specific conditions set out in the agreement;

 

"licence"

means the authority, regardless of its specific title or form, issued to a regulated financial institution and in terms of which it is authorised to conduct itsbusiness;

 

"low income housing"

includes any housing provided in terms of a housing development program, housing assistance measure or any other measure or arrangement designed to-

a)        facilitate access to housing or housing delivery; or

b)        rehabilitate or upgrade existing housing stock, or related municipal infrastructure and services, for the benefit of persons contemplated in section 13(a), or other persons who cannot independently provide for their own housing needs;

 

"Magistrates’ Courts Act"

means the Magistrates’ Courts Act, 1944 (Act No. 32 of 1944);

 

"MEC"

means a Member of the Executive Council;

 

"member of the Board"

means a person designated or appointed to the Board in terms of section 19;

 

"Minister"

means the member of the Cabinet responsible for consumer credit matters;

 

"mortgage"

means a pledge of immovable property that serves as security for a mortgage agreement;

 

"mortgage agreement"

means a credit agreement that is secured by a pledge of immovable property;

 

"official language"

means an official language listed in section 6(1) of the Constitution;

 

"ombud with jurisdiction"

in respect of any particular dispute arising out of a credit agreement in terms of which the credit provider is a "financial institution" as defined in the Financial Services Ombud Schemes Act, 2004 (Act No. 37 of 2004), means an "ombud", or the "statutory ombud", as those terms are respectively defined in that Act, who has jurisdiction in terms of that Act to deal with a complaint against that financial institution;

 

"organ of state"

means an organ of state as defined in section 239 of the Constitution;

 

"pawn transaction"

means an agreement, irrespective of its form, in terms of which-

a)        one party advances money or grants credit to another, and at the time of doing so, takes possession of goods as security for the money advanced or credit granted; and

b)        either-

i)          the estimated resale value of the goods exceeds the value of the money provided or the credit granted, or

ii)         a charge, fee or interest is imposed in respect of the agreement, or in respect of the amount loaned or the credit granted; and

c)        the party that advanced the money or granted the credit is entitled on expiry of a defined period to sell the goods and retain all the proceeds of the sale in settlement of the consumer’s obligations under the agreement;

 

"premises"

includes land, or any building, structure, vehicle, ship, boat, vessel, aircraft or container;

 

"prescribed"

means prescribed by regulation;

 

"principal debt"

means the amount calculated in accordance with section 101 (1)(a);

 

"private dwelling"

means any part of a formal or informal structure that is occupied as a residence, or any part of a structure or outdoor living area that is accessory to, and used principally for the purposes of, a residence;

 

"prohibited conduct"

means an act or omission in contravention of this Act, other than an act or omission that constitutes an offence under this Act, by-

a)        an unregistered person who is required to be registered to engage in such an act; or

b)        a credit provider, credit bureau or debt counsellor;

 

"Promotion of Equality and Prevention of Unfair Discrimination Act"

means the Promotion of Equality and Prevention of Unfair Discrimination Act, 2000 (Act No. 4 of 2000);

 

"provincial credit regulator"

means a body within the provincial sphere of government authorised to regulate consumer credit matters within a province;

 

"public interest credit agreement"

means a credit agreement that meets all the criteria prescribed in terms of section 11, and which is therefore exempt from the application of provisions of this Act concerning reckless credit;

 

"public regulation"

means any national, provincial or local government legislation or subordinate legislation, or any licence, tariff, directive or similar authorisation issued by a regulatory authority or pursuant to any statutory authority;

 

"reckless credit"

means the credit granted to a consumer under a credit agreement concluded in circumstances described in section 80;

 

"registrant"

means a person who has been registered in terms of this Act;

 

"regulated financial institution"

means a bank as defined in the Banks Act, 1990 (Act No. 94 of 1990), a Mutual Bank as defined in the Mutual Banks Act, 1993 (Act No. 124 of 1993); or any other financial institution that is similarly licensed and authorised to conduct business and take deposits from the public, in terms of any national legislation;

 

"regulation"

means a regulation made under this Act;

 

"regulatory authority"

means an entity established in terms of national or provincial legislation responsible for regulating an industry, or sector of an industry;

 

"repealed law"

means an Act mentioned in section 172(4), or a public regulation made in terms of such an Act;

 

"representative trade union"

has the meaning set out in the Labour Relations Act, 1995 (Act No. 66 of 1995);

 

"respondent"

means a person against whom a complaint or application has been initiated in terms of this Act;

 

"school loan"

means a credit agreement in terms of which-

a)        money is paid to a primary or secondary school on account of school fees or related costs for the benefit of the consumer’s child or other dependant; or

b)        a primary or secondary school defers payment of all or part of the school fees or related costs for the consumer’s child or other dependant;

 

"secured loan"

means an agreement, irrespective of its form but not including an instalment agreement, in terms of which a person-

a)        advances money or grants credit to another, and

b)        retains, or receives a pledge or cession of the title to any movable property or other thing of value as security for all amounts due under that agreement;

 

"service fee"

means a fee that may be charged periodically by a credit provider in connection with the routine administration cost of maintaining a credit agreement;

 

"settlement value"

means the amount in respect of a credit agreement that is required to be paid on a particular date to satisfy all the consumer’s financial obligations to the credit provider, as calculated in accordance with section 125(2);

 

"sms"

means a short message service provided through a telecommunication system;

 

"small business"

has the meaning set out in the National Small Business Act, 1996 (Act No. 102 of 1996);

 

"South African Reserve Bank"

has the meaning set out in the South African Reserve Bank Act, 1989 (Act No. 90 of 1989);

 

"statutory exception"

means a provision of this Act that specifically provides for exceptional treatment of developmental credit agreements;

 

"stokvel"

means a formal or informal rotating financial scheme with entertainment, social or economic functions, which-

a)        consists of two or more persons in a voluntary association, each of whom has pledged mutual support to the others towards the attainment of specific objectives;

b)        establishes a continuous pool of capital by raising funds by means of the subscriptions of the members;

c)        grants credit to and on behalf of members;

d)        provides for members to share in profits from, and to nominate management of, the scheme; and

e)        relies on self-imposed regulation to protect the interest of its members;

 

"student loan"

means a credit agreement in terms of which-

a)        money is paid by the credit provider to an institution of tertiary education on account of education fees or related costs for the benefit of the consumer or a dependant of the consumer; or

b)        an institution of tertiary education defers payment of all or part of the consumer’s education fees or related costs;

 

"temporary increase"

with respect to the credit limit applicable to a credit facility, means an increase in circumstances described in section 119(2);

 

"this Act"

includes a Schedule to this Act, a regulation made or a notice issued under this Act;

 

"Tribunal"

means the National Consumer Tribunal established by section 26; and

 

"utility"

means the supply to the public of an essential-

a)        commodity, such as electricity, water, or gas; or

b)        service, such as waste removal, or access to sewage lines, telecommunication networks or any transportation infrastructure.

Debt Counsellors

Marsia Kuypers

Tel: 082 396 2568

Fax: 086 556 3328

Area: Pretoria

Jan-Viljoen Coetzee

Tel: 084 549 1755

Fax: 086 621 9193

Area: Nina Park

Valerie Nakale

Tel: 018 381 8768

Fax: 018 381 8604

Area: Mafikeng

Dean Morris

Tel: 083 645 4094

Fax: 031 763 4363

Area: La Lucia

Joana Vivier

Tel: 053 832 6229

Fax: 086 543 4640

Area: Kimberley

Jacques Jooste

Tel: 011 794 7555

Fax: 011 794 9965

Area: Johannesburg

Marlene Stein

Tel: 012 667 4177

Fax: 086 527 2203

Area: Irene

Heidi Naude

Tel: 044 873 0281

Fax: 086 512 5012

Area: George

Herbert Theron

Tel: 011 472 0088

Fax: 086 655 6730

Area: Florida

Isabe Landman

Tel: 041 933 1189

Fax: 086 591 2676

Area: Despatch

Andiswa Tinto

Tel: 021 431 9134

Fax: 086 523 7084

Area: Cape Town

Jaco Janse Van Rensburg

Tel: 082 568 4969

Fax: 086 645 0389

Area: Barberton

Monique Snyders

Tel: 032 946 3024

Fax: 086 588 4605

Area: Ballito

Christopher Beukes

Tel: 084 2577599

Fax: 021 637 5023

Area: Athlone

Lydia Kinnear

Tel: 082 824 6338

Fax: 086 537 5976

Area: Annlin

Anlizette Schuurman

Tel: 031 903 3840

Fax: 031 701 5570

Area: Amanzimtoti

Kelebogile Mooketsi

Tel: 082 299 3430

Fax: 086 695 3280

Area: Amandasig

Annerie Marais

Tel: 083 703 0486

Fax: 045 838 6572

Area: Aliwall North

Rerandzo Mokgwatlheng

Tel: 082 430 6329

Fax: 011 805 8348

Area: Alexandra Township

Daniel Lezar

Tel: 011 907 1022

Fax: 011 907 1490

Area: Alberton