What is the National Credit Act and whom does it apply to? Here’s what you need to know.
You may have seen the line ‘… is an authorised financial services provider and registered credit provider’ when applying for credit or a loan at a financial institution, or heard it at the end of a radio ad. But what does it mean and how does this impact you?
This legal line is related to the National Credit Act (NCA, the Act) regulated by the National Credit Regulator, which is there to protect the consumer when borrowing money from a financial services provider.
One of the primary reasons this Act was passed was to protect consumers from unregulated lenders. It was found that some lenders took advantage of their clients by using difficult language and jargon to get them to sign up for something they don’t understand or applying for more credit than they can afford.
Under the Act you’re protected as follows:
Subject to specific exceptions in the NCA, if you as a consumer enter into a credit agreement you’re immediately protected by the NCA and have the right to the above. It means that although you’re responsible for the debt owed, the lender also has a responsibility to protect you.
This information is for general information purposes only and is not legal advice.
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