President Jacob Zuma has signed into law the National Credit Amendment Act, 2014. The Minister of Trade and Industry, Dr Rob Davies says this will amongst others offer more protection to consumers against irresponsible / reckless lending practices. He said it is unacceptable that 50% of about 21 million credit active consumers’ records are impaired, and many are currently unable to access credit and employment due unsecured lending and irresponsible lending practices.

Minister Davies says it is an obligation of the government to protect vulnerable consumers against unscrupulous practices. This law will improve the effectiveness of Debt Counselling, Debt Review, and the work of Payment Distribution Agencies.

Johannesburg – It is important to note that credit amnesty will not free consumers of the obligation to pay their debt.

The debt must still be settled if they are to keep your credit record clean in the future.

The South African government has implemented a credit amnesty from April 1 2014. The amnesty will give all consumers a fresh start with a clean credit record. This is great news for the many South Africans struggling to secure a job or a loan for a car or home as a result of a poor credit record.

According to the Department of Trade & Industry, about half of South Africa’s 21 million credit active consumers are behind or struggling with their repayments. Government is giving them a clean slate as it standardises and tightens lending requirements with new laws.

This is a welcome development for consumers who can’t get a bond or loan, because they may have struggled to pay off a credit card three or four years ago.