More than 4 200 credit providers have sent in registration applications in an industry "ripe for regulation", National Credit Regulator Gabriel Davel said at a Consumer Rights Day conference hosted by Absa this week.
There are about 14 million credit- active consumers in an industry where the total volume of consumer credit is estimated to be worth R680 billion a year, Davel says.
He was speaking about the National Credit Act (NCA) which takes full effect in June this year and which his office has been tasked with monitoring and enforcing.
The NCA places more responsibility on credit providers, such as banks and department stores, and is intended to protect consumers from unscrupulous moneylenders.
If you want to apply for credit in the year ahead but are not sure of your credit rating, the NCA entitles you to access your credit record with a credit bureau once a year, at no cost to yourself. However, if you require access to your credit records again during that year, you will have to pay a fee of R20 a request.
The onus will now lie with the credit bureaux to take all reasonable steps to ensure that all records are up to date.
Davel says if you have to personally spend any money to correct information at a credit bureau, the NCA empowers you to claim that money back from the credit bureau concerned.
The reckless lending clause in the NCA requires companies to prove that at the point of extending credit to you, they took steps to ascertain whether you could afford the repayments.
If they cannot prove this, companies will not be able to secure judgments against you.
"We have had numerous instances of companies granting credit willy-nilly and then simply obtaining a judgment against the consumer for an amount to be deducted from their salary, with no regard as to the consumer's ability to pay," Davel says.
His office already employs just under 60 staff members but intends to increase this to 80 to enhance its ability to properly monitor and enforce the NCA.
"We know that the major banks take the law seriously and will take steps to ensure they comply, particularly as the NCA provides for a maximum fine of up to 10 percent of a company's revenue if it is found guilty of transgressing the law," Davel says.
Absa, the biggest bank in the country, posted a total revenue of R30.4 billion last year.