National Credit Act, 2005 (Act No. 34 of 2005)
Chapter 5 : Consumer Credit Agreements
Part F : Rescission and termination of credit agreements

121. Consumer's right to rescind credit agreement

1)        This section applies only in respect of a lease or an instalment agreement entered into at any location other than the registered business premises of the credit provider.

2)        A consumer may terminate a credit agreement within five business days after the date on which the agreement was signed by the consumer, by-

a)        delivering a notice in the prescribed manner to the credit provider; and

b)        tendering the return of any money or goods, or paying in full for any services, received by the consumer in respect of the agreement.

3)        When a credit agreement is terminated in terms of this section, the credit provider-

a)        must refund any money the consumer has paid under the agreement within seven business days after the delivery of the notice to terminate; and

b)        may require payment from the consumer for-

i)          the reasonable cost of having any goods returned to the credit provider and restored to saleable condition; and

ii)         a reasonable rent for the use of those goods for the time that the goods were in the consumer’s possession, unless those goods are in their original packaging and it is apparent that they have remained unused.

4)        A credit provider to whom property has been returned in terms of this section, and who has unsuccessfully attempted to resolve any dispute over depreciation of that property directly with the consumer and through alternative dispute resolution under Part A of Chapter 7, may apply to a court for an order in terms of subsection (5).

5)        If, on an application in terms of subsection (4), a court concludes that the actual fair market value of the goods depreciated during the time that they were in the consumer’s possession, a court may order the consumer to pay to the credit provider a further amount not greater than the difference between-

a)        the depreciation in actual fair market value, as determined by the court; and

b)        the amount that the credit provider is entitled to charge the consumer in terms of subsection (3)(b).

122. When consumer may terminate agreement

1)        A consumer may terminate a credit agreement at any time by paying the settlement amount to the credit provider, in accordance with section 125.

2)        In addition to subsection (1), a consumer may terminate an instalment agreement, secured loan or lease of movable property, by-

a)        surrendering to the credit provider the goods that are the subject of that agreement in accordance with section 127; and

b)        paying to the credit provider any remaining amount demanded in accordance with section 127(7).

123. Termination of agreement by credit provider

1)        A credit provider may terminate a credit agreement before the time provided in that agreement only in accordance with this section.

2)        If a consumer is in default under a credit agreement, the credit provider may take the steps set out in Part C of Chapter 6 to enforce and terminate that agreement.

3)        A credit provider in respect of a credit facility may-

a)        suspend that credit facility at any time the consumer is in default under the agreement; or

b)        close that credit facility by giving written notice to the consumer at least ten business days before the credit facility will be closed.

4)        A credit agreement referred to in subsection (3) remains in effect to the extent necessary until the consumer has paid all amounts lawfully charged to that account.

5)        A credit provider may not close or terminate a credit facility solely on the grounds that-

a)        the credit provider has declined a consumer's request to increase the credit limit;

b)        the consumer has declined the credit provider's offer to increase the credit limit;

c)        the consumer has requested a reduction in the credit limit, unless that reduction would reduce the credit limit to a level at which the credit provider does not customarily offer or establish credit facilities; or

d)        the card, personal identification code or number or other identification device used to access that facility has expired.

6)        The unilateral termination of a credit agreement by a credit provider as contemplated in this section does not suspend or terminate any residual obligations of the credit provider to the consumer under that agreement or this Act.