Abstract
This dissertation provides a comprehensive analysis of consumer protections embedded within credit agreements under the National Credit Act 34 of 2005 (hereinafter referred to as the “NCA” or the “Act”). The NCA was enacted to regulate the credit industry and to protect consumers by prohibiting certain unfair practices, promoting responsible credit granting and enhancing transparency within the credit market.1 The study examines the efficacy of the NCA in balancing consumer protection and responsible credit lending through an analysis of its legislative framework. It further evaluates the extent to which the Act’s provisions prevent consumer exploitation and promote a fair, transparent and sustainable credit market.
This dissertation further discusses the roles and responsibilities of the National Credit Regulator2 (hereinafter referred to as the “NCR”) which was established in terms of section 12 of the NCA in enforcing these protections and overseeing the credit industry.
The instrument of credit has been described as a “double edged sword”.3 Before the NCA was passed in 2005, it was too easy for unethical credit providers to take advantage of people who are often desperate for help. Some lenders took advantage of consumers by using difficult language and jargon to confuse them into unfair credit agreements, which could lead them to taking on more credit than they could afford.4 Credit is neither inherently harmful nor inherently beneficial; its justice lies in the conditions under which it is granted and the understanding with which it is accepted.5
The NCA introduced extensive legal protections aimed at addressing predatory lending practices, the effectiveness of which is evaluated in this study. While the NCA is comprehensive in its protections, certain operational weaknesses and enforcement defects ...