National Credit Act, 2005 (Act No. 34 of 2005)RegulationsNational Credit Regulations, 2006Chapter 4 : Consumer Credit AgreementsPart B : Form of credit agreements31. Requirements for intermediate or large agreements |
| (1) | The following requirements are prescribed in terms of section 93 of the Act in respect of all categories of intermediate and large agreements including developmental credit agreements: |
| (a) | All the information that is disclosed in a credit agreement must be comprehensive, clear, concise and in plain language; |
| (b) | The credit agreement may be set out in one or more documents, provided that if it is set out in more than one document, the document signed by the consumer, must incorporate all other documents by clear reference and a copy of all documents must be given to the consumer; |
| (c) | The lettering of the credit agreement must be legible and clear enough to ensure that it remains legible and clear if photocopied or faxed; |
| (d) | The lettering of the matters that are required to be disclosed in terms of sub-regulation (2) must be given equal prominence to the body of the rest of the document; |
| (e) | If the quotation does not form part of the credit agreement, the information that is required to be disclosed in the quotation must be disclosed in the credit agreement on the first page of the agreement in a bordered tabular format titled "Cost of Credit"; |
| (f) | In the Cost of Credit table, the credit provider must also disclose the information prescribed in sub-regulation (2)(j) and (k). |
| (2) | Intermediate and large agreements must contain the following information, if applicable: |
| (a) | The type of agreement; |
| (b) | The credit provider’s name, contact details and registration number with the National Credit Regulator; |
| (c) | Cost of credit reflecting the following: |
| (i) | The amount of the principal debt, including the amount deferred in terms of the credit agreement as well as the nature and amount of the following fees and charges where they have been included in the principal debt in terms of the credit agreement: |
| (aa) | the cost of an extended warranty agreement; |
| (bb) | delivery, installation and initial fuelling charges, limited to the actual cost of these items; |
| (cc) | connection fees, levies or charges; |
| (dd) | taxes, license or registration fees. |
| (ii) | If the amount deferred in terms of the credit agreement is not ascertainable, the maximum amount deferrable; |
| (iii) | The proposed distribution of the principal debt and to whom each amount is to be paid; |
| (iv) | If the distribution of the amount deferred in terms of the credit agreement is subject to conditions, such conditions; |
| (v) | If the credit is provided by the supplier of goods, immovable property or services, the cash price of such goods, immovable property or services; |
| (vi) | The amount of any initiation fee; |
| (vii) | The option of having the initiation fee paid upfront; |
| (viii) | The amount of any service fee; |
| (ix) | The basis upon which service fee is payable, if annual, an indication that it will be added to the outstanding balance; |
| (x) | The annual rate at which interest is levied in respect of the agreement, expressed as a percentage and calculated in accordance with Regulation 40; |
| (xi) | The rand amount of interest charges over the term of the agreement, based on the rate at inception of the agreement in the case of a variable interest rate; |
| (xii) | Whether the interest rate is fixed or variable, and if variable, the reference rate to which the interest rate is fixed, |
| (xiii) | The nature of any insurance contract entered into, pursuant to section 106 of the Act; |
| (xiv) | The nature of any additional insurance contract entered into, pursuant to section 106 of the Act; |
| (xv) | The cost to the consumer of the insurance provided; |
| (xvi) | The amount of any fee, commission, remuneration or benefit receivable by the credit provider or any other person in relation to the insurance; |
| (xvii) | The consumer’s right to waive a policy proposed by the credit provider and substitute a policy of the consumer’s own choice, subject to section 106 of the Act; |
| (xviii) | The cost of additional insurance and whether such cost is charged by monthly or annual premiums; |
| (xix) | The amount of any default administration charges which may be imposed on default by the consumer or the manner in which such charges will be calculated; |
| (xx) | The circumstances in which such default administration charges will be imposed; |
| (xxi) | The amount of any collection costs which may be charged in respect of the enforcement of a consumer's monetary obligations in terms of the credit agreement or the manner in which such costs will be calculated; |
| (xxii) | The circumstances in which such collection costs will be charged. |
| (d) | All fees levied by the credit provider must be disclosed in the agreement together with the date on which they will be levied and any other information relating to the charging of such fees; |
| (e) | If the amounts that have to be disclosed not ascertainable, the credit provider must disclose such amounts based on estimated information, provided that such estimates are reasonable in the circumstances of the proposed credit agreement; |
| (f) | If the amounts disclosed are based on estimated information, the credit provider must clearly disclose this to the consumer by indicating which amounts are based on estimated information and disclosing such estimated information; |
| (g) | The sum of the amounts disclosed in respect of the initiation fee, service fee, interest and cost of credit insurance, provided that, to the extent that any amount is not ascertainable, the credit provider must clearly indicate the method of calculating the amount; |
| (h) | The sum of the principal debt, initiation fee, service fee, interest and cost of credit insurance, provided that, to the extent that any amount is not ascertainable, the credit provider must clearly indicate the method of calculating the amount; |
| (i) | If the interest rate or credit fees and charges that are payable in terms of the agreement may be changed, a statement to that effect must be disclosed together with the manner and the time frames within which the consumer must be notified of any changes to the interest rate or fees and charges in accordance with section 104 of the Act; |
| (j) | The amount of the repayment(s) or if not a fixed or determinable amount, the method of calculating the repayment amount; |
| (k) | If fixed or determinable— |
| (i) | the number of repayments; |
| (ii) | the frequency of the repayments; |
| (iii) | when the first repayment is due; |
| (iv) | if all repayment amounts are not equal, how will they differ; |
| (v) | the total amount of all repayments; |
| (vi) | the term or duration of the agreement; |
| (l) | The frequency with which the consumer will be provided with a statement of account; |
| (m) | The manner in which the statement will be provided; |
| (n) | If the credit provider has taken any form of security or mortgage in respect of the repayment of the loan, a description of the security or asset mortgaged; |
| (o) | Details of the implications of default by the consumer; |
| (p) | Details of the process that will be followed on default; |
| (q) | A statement notifying the consumer as comprehensively as reasonably possible about the information sharing practices in credit reporting, which must contain the following information: |
| (i) | confirmation by the consumer that the credit provider may transmit to the credit bureau data about the application, opening and termination of an account; |
| (ii) | the fact that information on non-compliance with terms and conditions of the credit agreement is transferred to the credit bureau; |
| (iii) | the name and contact details of the credit bureau or credit bureaux to which the information is transferred; |
| (iv) | the fact that the credit bureau provides a credit profile and possibly a credit score on credit worthiness of the person subject to the record; |
| (r) | A statement of the consumer’s right to: |
| (i) | contact the credit bureau; |
| (ii) | have the credit record disclosed; and |
| (iii) | correct inaccurate information; |
| (s) | If applicable, the consumer’s right to rescind the credit agreement in terms of section 121 of the Act; |
| (t) | The right of the consumer to terminate the credit agreement in terms of section 122 of the Act; |
| (u) | A statement of the consumer’s or guarantor’s right to settle the agreement together with an explanation of the manner in which the amount required to settle the credit agreement is calculated in terms of section 125 of the Act; |
| (v) | The right of the credit provider to terminate the credit agreement in terms of section 123 of the Act; |
| (w) | A statement of the consumer’s rights to: |
| (i) | resolve a complaint by way of alternative dispute resolution; |
| (ii) | file a complaint with the National Credit Regulator, or |
| (iii) | make an application to the Tribunal, |
| (x) | If applicable, the consumer’s obligations to disclose the location of goods in terms of section 97 of the Act; |
| (y) | If applicable, the consumer’s right to surrender goods in terms of section 127 of the Act together with a description of the process to be followed in surrendering goods in terms of section 127 of the Act; |
| (z) | If applicable and as prescribed in terms of section 94 of the Act, the contact number at which a consumer may report the loss or theft of a card, personal identification number or other device and the extent of the consumer’s liability for purchases charged to that facility after the card, personal identification code or number or other device has been lost or stolen; |
| (AA) | A statement of the consumer’s right to prepay any amount under a credit agreement in terms of section 126 of the Act; |
| (BB) | A statement of the consumer’s right to apply to a debt counsellor to be declared over-indebted in terms of section 86 of the Act, and the process to be followed; |
| (CC) | Contact details of the National Credit Regulator and the Tribunal, and in the case of the credit provider-being a regulated financial institution, the contact details of the adjudicator responsible for that institution. |
| (3) | If any item set out in this regulation is dependant on the portion or amount of the credit utilised by the consumer, the maximum utilisation must be assumed for purposes of the required disclosure. |
| (4) | For purposes of electronic or telephone originated documents, the electromagnetic recording and transcribing of the documents will be sufficient, provided that the consumer is supplied with copies of the agreement within a reasonable time. |