Ever more consumers are using online methods to apply for credit, debt counselling and to access credit reports, which is providing new channels for scammers and fraudulent operators.
This is according to Nomsa Motshegare, CEO of the National Credit Regulator (NCR), which, together with the National Consumer Commission (NCC), will this month focus on educating consumers about their rights and responsibilities as per the amended National Credit Act.
This includes misleading advertising with a focus on SMS and online credit; debt counselling scams; and informing consumers about the dangers of using unregistered credit providers.
Motshegare says consumers who are applying for credit online should only apply to credit providers who are registered with the NCR. They can verify the credit provider’s registration with the NCR by checking if their name and registration number are the same as that which appears on the NCR’s website. Alternatively, consumers can also call the NCR to verify the credit provider’s details.
NCC commissioner Ebrahim Mohamed says technology has created various opportunities for businesses and customers alike, however, he says consumers should be mindful of the risks associated with doing transactions over the internet or the telephone. He warns consumers to listen carefully when they transact over the telephone, and to report suspicious telephone and online marketers to the NCC on 012 428 7000.
WHAT NOT TO DO:
- Do not pay any administration or legal fees to credit providers before you are granted a loan – this is unlawful.
- Avoid credit providers who promise to grant loans to “blacklisted” consumers – this is unlawful as the National Credit Act requires all credit providers to conduct an affordability assessment prior to granting credit to consumers.
- If you are called by debt counsellors marketing their services and urging you to go under debt counselling, remember that debt counselling is meant only for over-indebted consumers and is by no means a savings mechanism.
- Some debt counsellors promise consumers as much as 60% savings or cash back if they sign up with them, which is an empty promise and unlawful.
- Do not give personal information to strangers who claim to be credit providers, debt counsellors or credit bureaus.
- Customers should verify if the companies are legitimate by checking with the NCR before committing or giving out their personal information online or telephonically.