Government steps in to protect consumers from "greedy" credit providers

Government has introduced the new Credit Life Insurance Regulation under the National Credit Act to cap the cost of cover given to consumers when borrowing from credit providers.

Company Secretary at National Credit Regulator, Lesiba Mashapa says the new regulation aims to regulate credit life insurance premiums which are charged to consumer when entering into credit agreements.

He says even lower income earners pay exorbitant amounts for this insurance, which is not fair.

Read: Reckless lending is still common practice in SA

This regulation introduces a premium cap of R4.50 month on each R1 000 borrowed.

Lesiba Mashapa, Company Secretary at National Credit Regulator

According to Mashapa, the premiums currently charged to consumers vary. He says the highest they have seen is R120 for each R700 borrowed.

This was a very abusive money making scheme.

Lesiba Mashapa, Company Secretary at National Credit Regulator

Many credit providers had a chance to lower their premiums when it became clear that the risk profile of their consumers is very low in the sense that there are very few claims and that hasn't happened.

Lesiba Mashapa, Company Secretary at National Credit Regulator

That is why government has decided to introduce these regulations.

Lesiba Mashapa, Company Secretary at National Credit Regulator

To hear more of this interview, listen below:


Recommended

by NEWSROOM AI
Read More
Opposition parties unite ahead of Zuma no confidence vote

Opposition parties unite ahead of Zuma no confidence vote

This public show of solidarity is all in a bid to achieve one goal: to get President Jacob Zuma out of office.

Edcon to appear before National Consumer Tribunal for unlawful club fee

Edcon to appear before National Consumer Tribunal for unlawful club fee

The tribunal has also found that charging this fee was in contravention of the National Credit Act.

Edcon's club fee is unlawful and in contravention of the National Credit Act

Edcon's club fee is unlawful and in contravention of the National Credit Act

The National Consumer Tribunal handed down the judgment following an investigation by the National Credit Regulator

Defaulting consumers coaxed to hand over vehicles by credit providers - NCR

Defaulting consumers coaxed to hand over vehicles by credit providers - NCR

NCR conducted an investigation on Wesbank and found that the bank is in breach of some NCR laws.

Credit bureaus are watching you; judging your every move

Credit bureaus are watching you; judging your every move

They’re judging you; even if you don’t know they exist. The Credit Regulator’s Alison Magrath discusses credit profiles.

Buying Barclays… junk status and the rand… Capitec Bank in hot water… (and more)

Buying Barclays… junk status and the rand… Capitec Bank in hot water… (and more)

7 most read, most talked about business articles of the past week.

Consumer watchdog to take Capitec Bank to court over lending practices

Consumer watchdog to take Capitec Bank to court over lending practices

Ray White interviews Clark Gardner, the consumer champion who last year exposed Lewis Group’s unlawful credit practices.

How to handle your over indebtedness…

How to handle your over indebtedness…

When you've finally succumbed to the fact that you're over your head in debt and cannot cope any further, here's a way forward.

Popular articles
Thandeka Gqubule prepared to fight EFF to the end

Thandeka Gqubule prepared to fight EFF to the end

SABC Journalist and part of the SABC 8 Thandeka Gqubule says she has not had any communication from the EFF.

Callers debate Mashaba arresting a man wheeling cow heads in Joburg CBD

Callers debate Mashaba arresting a man wheeling cow heads in Joburg CBD

Mashaba posted a picture of a man pushing a trolly full of cow heads saying that he had him arrested for an "illegal act".

Heads to roll for N2 car spinning frenzy

Heads to roll for N2 car spinning frenzy

WC Traffic Chief says there was no authorisation given for cars to be spun on a provincial road with the protection of officers.

Water restrictions see 17 municipal pools across CT open from December

Water restrictions see 17 municipal pools across CT open from December

The City of Cape Town's JP Smith says four of the existing municipal pools will be converted into salt water pools.

[WATCH] South Africans going crazy doing the #MalwedheChallenge

[WATCH] South Africans going crazy doing the #MalwedheChallenge

The Road Traffic Management Corporation (RTMC) has issued a warning asking people not to do the challenge while driving.

NPO director murdered in his Cape Town home, mourned

NPO director murdered in his Cape Town home, mourned

Curran was found stabbed to death in his Cape Town home about 48 hours ago.

South Africa gets a brand-new bank, ‘Bank Zero’

South Africa gets a brand-new bank, ‘Bank Zero’

The Money Show’s Bruce Whitfield interviews Michael Jordaan, co-founder and Chairperson at Bank Zero.

#DataMustFall! Meet Rain CEO Willem Roos... he is making it happen

#DataMustFall! Meet Rain CEO Willem Roos... he is making it happen

The Money Show’s Bruce Whitfield interviews Rain CEO Willem Roos for his weekly “ShapeShifter” feature.