Government steps in to protect consumers from "greedy" credit providers

Government has introduced the new Credit Life Insurance Regulation under the National Credit Act to cap the cost of cover given to consumers when borrowing from credit providers.

Company Secretary at National Credit Regulator, Lesiba Mashapa says the new regulation aims to regulate credit life insurance premiums which are charged to consumer when entering into credit agreements.

He says even lower income earners pay exorbitant amounts for this insurance, which is not fair.

Read: Reckless lending is still common practice in SA

This regulation introduces a premium cap of R4.50 month on each R1 000 borrowed.

Lesiba Mashapa, Company Secretary at National Credit Regulator

According to Mashapa, the premiums currently charged to consumers vary. He says the highest they have seen is R120 for each R700 borrowed.

This was a very abusive money making scheme.

Lesiba Mashapa, Company Secretary at National Credit Regulator

Many credit providers had a chance to lower their premiums when it became clear that the risk profile of their consumers is very low in the sense that there are very few claims and that hasn't happened.

Lesiba Mashapa, Company Secretary at National Credit Regulator

That is why government has decided to introduce these regulations.

Lesiba Mashapa, Company Secretary at National Credit Regulator

To hear more of this interview, listen below:


This article first appeared on CapeTalk : Government steps in to protect consumers from "greedy" credit providers


Recommended

by NEWSROOM AI

702 welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the 702 community a safe and welcoming space for all.

702 reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

702 is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
Opposition parties unite ahead of Zuma no confidence vote

Opposition parties unite ahead of Zuma no confidence vote

This public show of solidarity is all in a bid to achieve one goal: to get President Jacob Zuma out of office.

Edcon to appear before National Consumer Tribunal for unlawful club fee

Edcon to appear before National Consumer Tribunal for unlawful club fee

The tribunal has also found that charging this fee was in contravention of the National Credit Act.

Edcon's club fee is unlawful and in contravention of the National Credit Act

Edcon's club fee is unlawful and in contravention of the National Credit Act

The National Consumer Tribunal handed down the judgment following an investigation by the National Credit Regulator

Defaulting consumers coaxed to hand over vehicles by credit providers - NCR

Defaulting consumers coaxed to hand over vehicles by credit providers - NCR

NCR conducted an investigation on Wesbank and found that the bank is in breach of some NCR laws.

Credit bureaus are watching you; judging your every move

Credit bureaus are watching you; judging your every move

They’re judging you; even if you don’t know they exist. The Credit Regulator’s Alison Magrath discusses credit profiles.

Buying Barclays… junk status and the rand… Capitec Bank in hot water… (and more)

Buying Barclays… junk status and the rand… Capitec Bank in hot water… (and more)

7 most read, most talked about business articles of the past week.

Consumer watchdog to take Capitec Bank to court over lending practices

Consumer watchdog to take Capitec Bank to court over lending practices

Ray White interviews Clark Gardner, the consumer champion who last year exposed Lewis Group’s unlawful credit practices.

How to handle your over indebtedness…

How to handle your over indebtedness…

When you've finally succumbed to the fact that you're over your head in debt and cannot cope any further, here's a way forward.

Popular articles
Retirement: 8 biggest mistakes people typically make…

Retirement: 8 biggest mistakes people typically make…

The Money Show’s Bruce Whitfield interviews Galileo Capital Financial Advisor Warren Ingram.

I was not introduced to Ajay Gupta - Grootes

I was not introduced to Ajay Gupta - Grootes

Stephen Grootes says he believes former Eskom CEO Brian Dames when said he was not formally introduced to the Gupta family.

Vavi: I can't sleep at night for making Zuma the president

Vavi: I can't sleep at night for making Zuma the president

Zwelinzima Vavi says South Africa is paying dearly for choices they've made in being angry with Mbeki and not thinking logically.

Why the PAC wants South Africa renamed Azania

Why the PAC wants South Africa renamed Azania

Pan Africanist Congress's Narius Moloto explains why it supports the name Azania, a word which he says has Arabic origins.

WATCH: Zuma denies crisis at Sassa, won't evaluate isiphithiphithi (chaos)

WATCH: Zuma denies crisis at Sassa, won't evaluate isiphithiphithi (chaos)

Zuma says he cannot be expected to act against Minister Bathabile Dlamini on social grants matter now before the ConCourt.

Who is Advocate Tembeka Ngcukaitobi?

Who is Advocate Tembeka Ngcukaitobi?

The EFF lawyer stole the show during the state capture report court battle.

5 most important years in anyone’s life (when it comes to investing)

5 most important years in anyone’s life (when it comes to investing)

How old are you? Financial advisor Warren Ingram discusses the five most important ages in anyone’s investment career.

3 easy questions could bag you R2000!

3 easy questions could bag you R2000!

WIN R2000! But only if you can prove you're a whiz of the MTN Biz Quiz by answering the following three questions...