16 Aug Reckless Lending and How Debt Review Can Help

Being an over-indebted South African isn’t easy, and making provisions to get your finances under control is an important part of living your best life. At True North Debt, a part of our comprehensive Debt Review service includes ruling out any potential instances of reckless lending. By doing so, we can ensure you have not fallen into over-indebtedness at the hands of a creditor who did not follow the legal guidelines to provide you with credit.

Firstly, let us define what exactly reckless lending is. If a credit provider has entered into a credit/loan agreement with a consumer before first conducting a thorough credit assessment, or the creditor did not understand the risks or costs properly, this is considered reckless lending. If a credit provider entered into a credit agreement knowing that the consumer did not qualify for the debt or if the credit provider proceeded into the agreement with an over-indebted consumer, this is also considered reckless lending. Knowing your rights as a consumer is imperative to safely accessing credit and managing your finances.

When you enter into Debt Review, one of the first things we check for is any warning signs of reckless lending. Our team needs to make sure you did not fall victim to reckless lending by one or more of your creditors. We have the ability to prove reckless lending occurred if this was the case, by investigating the case completely and accessing copies of the credit agreement, pre-agreement statements, and any quotations. Credit Providers are legally expected to keep records of all credit agreements for a period of 3 years. If it is the case and we can prove it, you may be freed from that debt obligation entirely.

Section 48A of the National Credit Act states that credit providers have a statutory obligation to actively prevent reckless lending. During the Debt Review Process, we take over communications with your creditors and need to fully understand the nature of your credit agreements. It is possible you became over-indebted because of a reckless lending case you did not even know was there. If you are concerned that you did fall victim to reckless lending, we will conduct a fair and detailed inspection. If you are incorrect and it was not reckless lending, at least you rule this out.

If you are not coping with your debt repayments and cannot make it to the end of the month, apply for our Debt Review Century City service. Enjoy the financial relief you need and receive protection from your creditors, while we also look for any signs of reckless lending amongst your creditors.