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

Chapter 5 : Consumer Credit Agreements

Part A : Unlawful agreements and provisions

89. Unlawful credit agreements

1)        This section does not apply to a pawn transaction.


2)        Subject to subsections (3) and (4), a credit agreement is unlawful if-

a)        at the time the agreement was made the consumer was an unemancipated minor unassisted by a guardian, or was subject to-

i)          an order of a competent court holding that person to be mentally unfit; or

ii)         an administration order referred to in section 74(1) of the Magistrates’ Courts Act, and the administrator concerned did not consent to the agreement,

and the credit provider knew, or could reasonably have determined, that the consumer was the subject of such an order;

b)        the agreement results from an offer prohibited in terms of section 74(1);

c)        it is a supplementary agreement or document prohibited by section 91(a);

d)        at the time the agreement was made, the credit provider was unregistered and this Act requires that credit provider to be registered; or

e)        the credit provider was subject to a notice by the National Credit Regulator or a provincial credit regulatorrequiring the credit provider-

i)          to stop offering, making available or extending credit under any credit agreement, or agreeing to do any of those things; or

ii)         to stop offering, making available or extending credit under the particular form of credit agreement used by the credit provider,

whether or not this Act requires that credit provider to be registered, and no further appeal or review is available in respect of that notice.


3)        Subsection (2)(a) does not apply to a credit agreement if the consumer, or any person acting on behalf of the consumer, directly or indirectly, by an act or omission-

a)        induced the credit provider to believe that the consumer had the legal capacity to contract; or

b)        attempted to obscure or suppress the fact that the consumer was subject to an order contemplated in that paragraph.


4)        Subsection (2)(d) does not apply to a credit provider if-

a)        at the time the credit agreement was made, or within 30 days after that time, the credit provider had applied for registration in terms of section 40, and was awaiting a determination of that application; or

b)        at the time the credit agreement was made, the credit provider held a valid clearance certificate issued by the National Credit Regulator in terms of section 42(3)(b).


5)        If a credit agreement is unlawful in terms of this section, despite any provision of common law, any other legislation or any provision of an agreement to the contrary, a court must order that-

a)        the credit agreement is void as from the date the agreement was entered into;

b)        the credit provider must refund to the consumer any money paid by the consumer under that agreement to the credit provider, with interest calculated-

i)          at the rate set out in that agreement; and

ii)         for the period from the date on which the consumer paid the money to the credit provider, until the date the money is refunded to the consumer; and

c)        all the purported rights of the credit provider under that credit agreement to recover any money paid or goods delivered to, or on behalf of, the consumer in terms of that agreement are either-

i)          cancelled, unless the court concludes that doing so in the circumstances would unjustly enrich the consumer; or

ii)         forfeit to the State, if the court concludes that cancelling those rights in the circumstances would unjustly enrich the consumer.

90. Unlawful provisions of credit agreement

1)        A credit agreement must not contain an unlawful provision.


2)        A provision of a credit agreement is unlawful if-

a)        its general purpose or effect is to-

i)          defeat the purposes or policies of this Act;

ii)         deceive the consumer; or

iii)        subject the consumer to fraudulent conduct;

b)        it directly or indirectly purports to-

i)          waive or deprive a consumer of a right set out in this Act;

ii)         avoid a credit provider's obligation or duty in terms of this Act;

iii)        set aside or override the effect of any provision of this Act;

iv)        authorise the credit provider to-

aa)      do anything that is unlawful in terms of this Act; or

bb)      fail to do anything that is required in terms of this Act;

c)        it purports to waive any common law rights that-

i)          may be applicable to the credit agreement; and

ii)         have been prescribed in terms of subsection (5);

d)        the provision results from an offer prohibited in terms of section 74(2) or (3);

e)        it purports to make the agreement subject to a supplementary agreement prohibited by section 91(a);

f)          it requires the consumer to enter into a supplementary agreement, or sign a document, prohibited by section 91(a); or

g)        it purports to exempt the credit provider from liability, or limit such liability, for-

i)          any act, omission or representation by a person acting on behalf of the credit provider; or

ii)         any guarantee or warranty that would, in the absence of such a provision, be implied in a credit agreement;

h)        it expresses an acknowledgement by the consumer that-

i)          before the agreement was made, no representations or warranties were made in connection with the agreement by the credit provider or a person on behalf of the credit provider; or

ii)         the consumer has received goods or services, or a document that is required by this Act to be delivered to the consumer, which have or has not in fact been delivered or rendered to the consumer;

i)          it expresses an agreement by the consumer to forfeit any money to the credit provider if the consumer-

i)          exercises the right of rescission in terms of section 121, except to the extent contemplated in section 121(3)(b); or

ii)         fails to comply with a provision of the agreement before the consumer receives any goods or services in terms of the agreement;

j)          it purports to appoint the credit provider, or any employee or agent of the credit provider, as an agent of the consumer for any purpose other than those contemplated in section 102 or deems such an appointment to have been made;

k)        it expresses, on behalf of the consumer-

i)          an authorisation for any person acting on behalf of the credit provider to enter any premises for the purposes of taking possession of goods to which the credit agreement relates; or

ii)         a grant of a power of attorney in advance to the credit provider in respect of any matter related to the granting of credit in terms of this Act;

iii)        an undertaking to sign in advance any documentation relating to enforcement of the agreement, irrespective of whether such documentation is complete or incomplete at the time it is signed;

iv)        a consent to a pre-determined value of costs relating to enforcement of the agreement except to the extent that is consistent with Chapter 6;

v)         a limitation of the credit provider’s liability for an action contemplated in subparagraph (iv); or

vi)        a consent to the jurisdiction of-

aa)      the High Court, if the magistrates’ court has concurrent jurisdiction; or

bb)      any court seated outside the area of jurisdiction of a court having concurrent jurisdiction and in which the consumer resides or works or where the goods in question (if any) are ordinarily kept;

l)          it expresses an agreement by the consumer to -

i)          deposit with the credit provider, or with any other person at the direction of the credit provider, an identity document, credit or debit card, bank account or automatic teller machine access card, or any similaridentifying document or device; or

ii)         provide a personal identification code or number to be used to access an account;

m)       it purports to direct or authorise any person engaged in processing payments to give priority to payments for the credit provider over any other credit provider;

n)        it purports to authorise or permit the credit provider to satisfy an obligation of the consumer by making a charge against an asset, account, or amount deposited by or for the benefit of the consumer and held by the credit provider or a third party, except by way of a standing debt arrangement, or to the extent permitted by section 124; or

o)        it states or implies that the rate of interest is variable, except to the extent permitted by section 103(4).


3)        In any credit agreement, a provision that is unlawful in terms of this section is void as from the date that the provision purported to take effect.


4)        In any matter before it respecting a credit agreement that contains a provision contemplated in subsection (2), the court must-

a)        sever that unlawful provision from the agreement, or alter it to the extent required to render it lawful, if it is reasonable to do so having regard to the agreement as a whole; or

b)        declare the entire agreement unlawful as from the date that the agreement, or amended agreement, took effect,

and make any further order that is just and reasonable in the circumstances to give effect to the principles of section 89(5) with respect to that unlawful provision, or entire agreement, as the case may be.


5)        The Minister may prescribe particular common law rights that may not be waived in a credit agreement on the grounds that the waiver of those rights would be inconsistent with the purposes of this Act as set out in section 3.

91. Supplementary requirements and documents

A credit provider must not-

a)        directly or indirectly require or induce a consumer to enter into a supplementary agreement, or sign any document, that contains a provision that would be unlawful if it were included in a credit agreement;

b)        request or demand a consumer to-

i)          give the credit provider temporary or permanent possession of an instrument referred to in section 90(2)(l)(i)other than for the purpose of identification, or to make a copy of the instrument;

ii)         reveal any personal identification code or number contemplated in section 90(2)(l)(ii); or

c)        direct, or knowingly permit, any other person to do anything referred to in this section on behalf or for the benefit of the credit provider.

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