In a previous alert, we examined whether the right of credit providers to claim a detribution is governed solely by the common law or whether credit providers are subject to the more onerous detribution requirements of the National Credit Act. Our 2017 article mentioned that the national credit regulator had turned to the Supreme Court for clarification on the meaning of the discharge provisions of the National Credit Act: sections 90 and 124. On 27 June 2019, the High Court issued its decision. The rules stipulate maximum periods during which different categories of consumer credit information can be kept by credit agencies. For example, civil judgments may be upheld for the first time A consumer may at any time return goods that are the subject of a credit agreement to a credit provider, whether or not the consumer is in default. The lender must then sell the goods and use the proceeds to pay the bill. Under the former Credit Agreements Act, this procedure applied only if the consumer was in default. This new provision gives the consumer an extraordinary right to terminate the contract if he so wishes. « 5. Where a credit agreement within the meaning of this section is unlawful, a court shall, through other legal provisions or a provision other than a contract, issue a fair and equitable order, including, but not limited to, an order that: (a) the credit agreement is void from the date of conclusion of the contract. Random credit agreements occur when goods or services are made available to a consumer for a certain period of time and a fee or interest is charged only if payment is not made by an agreed date. Examples include the drastic reduction of interest rates that has the effect of obscuring or obscuring the actual total cost of the loan when initiation and service fees are added. It is possible that these fees remain largely hidden, with an emphasis on interest rates (which are better known to consumers) when products are marketed. Fees help keep interest rates lower, making the loan cheaper, although the loan may not be cheaper.
The distortion of credit costs relative to interest and fees (of which consumers are not aware) increases the likelihood that consumers will be misled about the true cost of credit. Many will be tempted to borrow money that will cost much more than they originally expected. .