National Credit Act (NCA) FAQ's.
BMW Financial Services (South Africa) (Pty) Ltd is a Registered Credit Provider (NCRCP2341)
1. What is the main purpose of the NCA?
- To protect the consumer by preventing over-indebtedness and prohibiting reckless lending by credit providers;
- To regulate the credit industry in South Africa.
2. What happens to the previous credit legislation?
The NCA replaces the Credit Agreements Act and the Usury Act.
3. Does the NCA apply to me?
The NCA has been designed to protect all natural persons (you and me), and certain juristic persons. A juristic person is defined as a CC (Closed Corporation), a Trust, or a Pty Ltd.
4. When will I not enjoy the protection of the NCA?
When a consumer enters into a Rental Agreement, or a FML (Full Maintenance Lease).
5. How does the NCA affect the cost of an application?
Every cost, service fee and the interest must be clearly detailed on the Quotation and Pre-Agreement Statement that a consumer gets from a credit provider.
6. What information must I provide to apply for credit?
In order to apply for credit, a consumer must provide full personal details, full disclosure of all existing credit agreements, income and expenditure. All information must be complete and accurate.
7. Can I be forced to complete income/expenditure statement in any way?
The NCA requires the client to provide full and accurate information to the credit provider.
8. What do I do if I lose my contract and require a copy of this document?
Please contact the credit provider and they will supply a copy of the original at no additional cost within 20 days of the request. All copies requested within the first year of the contract being signed will be provided free of charge.
9. Can I add a Short Settlement Amount to my contract?
A Short Settlement Amount is the amount outstanding on a vehicle finance contract after settlement of the vehicle. In terms of the NCA, it does not form part of the asset.
10. Do I have to divulge any future or current contingent liabilities which I may have, for example surety obligations for other legal entities debts?
Yes, all current and future obligations and contingent liabilities must be disclosed at the application stage.
11. Do I have the right to confidential treatment?
The NCA provides access to consumer′s information to the following agencies:
- The credit provider;
- Debt counsellors;
- The Tribunal; and
- The Regulator.
This information may only be used in the following circumstances:
- That which is specifically permitted in NCA;
- A report or release that provides information to the consumer only.
12. How does the NCA affect my existing contract?
- The NCA is retrospective in certain respects and hence credit agreements entered into before the 1st June 2007 will fall within the ambit of the Act in these respects;
- Debt re-organization would be available to consumers who would require it and early termination fees are only applicable to large agreements.
13. Does the NCA require me to provide POI for every deal I process or does the 3 months rule still apply?
Proof of Income (POI) must be provided for each separate application.
14. Can I finance over more than 5 years?
It is recommended that the finance be done over a maximum of 60 months.
15. I do not receive a car allowance; can I lease my vehicle and have a balloon payment?
16. Will I be able to finance motorcycles over 5 years with no deposit?
Yes, this can now be done.
17. How does incomplete / incorrect information provided on the application affect the protection provided by the NCA?
Incorrect information provided to a credit provider may lead to the consumer not being protected by the NCA in certain respects.
18. What is the NCA contact number?
The National Credit Regulator (NCR) handles complaint with regards to NCA compliance.
Their contact details are as follows:
- Tel: 0860 627 627
- Email: email@example.com
- Website: www.ncr.org.za