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The NCC and NCR tackle consumer indebtedness and misleading adverts Print E-mail
Wednesday, 17 December 2014

As South African consumers reel from the tough economic conditions which have led to many of them becoming over-indebted, the National Consumer Commission (NCC) and the National Credit Regulator (NCR) have joined forces to fight consumer over-indebtedness. The two Regulators have put up a campaign together, aimed at raising the level of awareness for consumers to be on the lookout for deals that are too good to be true.

The aim of this campaign is to create awareness about undesirable practices prevalent in the market especially this time of the year such as misleading advertisements. These undesirable practices have the potential to over-indebt gullible consumers. The regulators also stressed that there needs to be full disclosure of “Balloon payments” and “Buy Now Pay Later deals”.

The campaign is divided into phases. The first phase is commencing now in December 2014 while the last phase will commence in February 2015.

The NCR regulates, amongst others, advertisements for credit, goods and services purchased on credit. It is a requirement of the National Credit Act that such advertisements must not be misleading or deceptive.

The NCC enforces the Consumer Protection Act which provides, amongst others, for consumers’ rights to fair, just and reasonable terms and conditions; disclosure and information; and fair and responsible marketing.

The Consumer Protection Act requires suppliers to be fair when dealing with consumers and to explain terms and conditions to them using plain and understandable language.

Advertisements that are deceptive, false or misleading raise serious concerns about the ethical behavior of manufacturers, sellers and credit providers. A consumer has the right to know what he/she is being offered or what he/she is buying, and all necessary information must be made available to him/her. Furthermore, the content of the advertisement must have full disclosure and be correct.
 
The festive season is already upon us as a country. With it comes the temptation to overspend, over-indulge and regret later! As consumers, we all seem to have the same ritual on an annual basis: indulge in December, repent in January and promise to spend less next year.

Consumers are strongly advised to avoid the temptation to spend unwisely but rather to save for 2015. If you have to buy gifts, budget for them in advance; walk into a store with a number in mind to avoid disasters.
 
Consumers are urged to wise up to misleading advertisements and not allow traders and service providers to take their hard earned cash/borrowings deceitfully.

“The NCC and the NCR have a responsibility to empower consumers to make wise consumer decisions in their quest for goods and services. It is also important for consumers to understand that they have a responsibility to look after their individual credit profile and manage debt accordingly to avoid the debt trap” says the Commissioner of the National Consumer Commission, Mr Ebrahim Mohamed.

Companies that offer consumer credit such as payday lenders, debt management firms and brokers must do more to ensure their advertising does not mislead customers.  It is important that all credit / service providers must ensure that financial promotions are fair, clear and not misleading to enable consumers to make informed decisions.

 “Consumers should be wary of misleading or deceptive advertisements such as ‘no credit checks required, blacklisted consumers welcome, free credit, cheap credit, affordable credit, low cost credit’ or any other wording that has substantially the same meaning”, advised Ms. Nomsa Motshegare, CEO of the NCR.

The NCC and NCR urge consumers to read and fully understand the fine print before entering into credit agreements and must live within their means. The theme for this campaign is Less Debt Less Stress!

(Source - NCC/NCR Media Release)
  

 

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