The Money or the Box: Perspectives on Reckless Credit in Terms of the National Credit Act 34 of 2005 by C. M. Van Heerden, Andre Boraine :: SSRN
24 Pages Posted: 26 Feb 2018
See all articles by C. M. Van Heerden
English Abstract: The National Credit Act 34 of 2005 introduced the concept of reckless credit for the first time in South African consumer protection legislation. The Act aims to prevent reckless credit lending by making pre-agreement assessments mandatory in terms of section 81 and providing for various debt relief remedies where credit has been extended recklessly. The courts have been granted various powers depending on the type of reckless credit which has been granted. Considerable uncertainty exists as to the bases upon which the court’s power to order a partial or total setting aside of the rights and duties of the consumer to whom reckless credit has been granted, as set out in section 80(1)(a) and 80(1)(b)(ii), should be exercised. Furthermore, regarding the aforementioned types of reckless credit lending, it is not clear on what basis a court should decide between a partial setting aside of the consumer’s rights and obligations and a suspension of the force and effect of the agreement. This discussion undertakes a practical investigation into the nature of reckless credit and the manner in which a pre-agreement assessment should be done. The remedies for reckless credit lending are analysed in an effort to determine the practical impact of the court’s powers in respect of the different cases of reckless credit for which the NCA provides. The procedural implications of reckless credit are also investigated.
Afrikaans Abstract: Die geld of die boks: Perspektiewe op roekelose krediet ingevolge die Nasionale Kredietwet 34 van 2005 Die Nasionale Kredietwet 34 van 2005 (hierna die NKW) lei die konsep van roekelose krediet vir die eerste keer In Suid-Afrikaanse kredietwetgewing in. Die NKW poog om roekelose kredietverlening te voorkom deur voorooreenkoms-assessering ingevolge artikel 81 daarvan verpligtend te maak en maak verder voorsiening vir verskeie remedies ten opsigte van roekelose krediet. Daar word aan die howe verskeie magte verleen afhangende van die soort roekelose krediet wat toegestaan is. Aansienlike onduidelikheid bestaan egter oor die basis waarop die magte van die hof om te beveel dat ´n totale of gedeeltelike tersydestelling van die regte en verpligtinge van die verbruiker, aan wie roekelose krediet soos beoog in artikel 80(1)(a) en 80(1)(b)(ii) toegestaan is, uitgeoefen moet word. Dit is voorts ook nie duidelik op watter basis ´n hof ten aansien van voormelde soorte roekelose krediet moet besluit tussen tersydestelling van die verbruiker se regte en verpligtinge of opskorting van die krag en effek van die ooreenkoms nie. Hierdie bespreking stel praktiese ondersoek in na die aard van roekelose krediet en die wyse waarop ´n voorooreenkoms-assessering gedoen moet word. Die remedies ten opsigte van roekelose krediet word ontleed in 'n poging om die praktiese effek van die magte van die hof vas te stel ten opsigte van die verskillende gevalle van roekelose krediet waarvoor die NKW voorsiening maak. Die prosedurele implikasies verbonde aan roeklose krediet word ook ondersoek.
Van Heerden, C. M. and Boraine, Andre, The Money or the Box: Perspectives on Reckless Credit in Terms of the National Credit Act 34 of 2005 (2011). De Jure, Vol. 44, N. 2, 2011 , Available at SSRN: https://ssrn.com/abstract=3124241