BRONWYN NORTJE: Unforeseen effects undermine consumer-protection intentions
‘The poor and marginalised have been most affected by the National Credit Amendment Act’
Before I had even settled my car loan, the SMSs started. "This is your invitation to apply now for your reserved CashPower Personal Loan." "Choose an Auto & General Personal Loan of up to R150,000. To apply, SMS your ID number." "Have you thought of what you could do with a WesBank Loan of up to R200,000? Call now!" Apart from being hugely annoyed, what surprised me by the barrage of "offers" for loans was that I had hoped the most recent amendment to the National Credit Act would have put a stop to this type of shameless soliciting. After all, the whole purpose of the new affordability regulations was to protect consumers from reckless lending practices and prevent them from finding themselves overindebted and in a situation where they were unable to repay their debts. In reality, although these regulations were introduced with the best intentions, they have resulted in a host of unanticipated consequences that could be doing more harm than good. They also seem to have encouraged t...
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