Investigate Reckless Lending
Recent statistics have shown that more than 11 million South African credit active consumers are over-indebted, meaning that they have more debt than they can pay back.
Reckless lending is only one of the reasons why some consumers find themselves over-indebted, as there is no free debt. Debt Freeze’s experienced debt counsellors can assist you to investigate whether or not the credit that was given to you was done so recklessly. Get in touch and investigate reckless lending today with Debt Freeze.
Investigate Reckless Lending
Recent statistics have shown that more than 11 million South African credit active consumers are over-indebted, meaning that they have more debt than they can pay back.
Reckless lending is only one of the reasons why some consumers find themselves over-indebted, as there is no free debt. Debt Freeze’s experienced debt counsellors can assist you to investigate whether or not the credit that was given to you was done so recklessly. Get in touch and investigate reckless lending today with Debt Freeze.
What is reckless lending?
- Before entering into a credit agreement with a consumer, the credit provider must conduct a detailed financial assessment on behalf of the client. This is a requirement of the National Credit Act.
- If the credit provider fails to conduct a detailed financial assessment, any credit agreement entered into between the credit provider and the consumer is classified as reckless lending or reckless credit irrespective of what the outcome of the assessment might have been.
- A credit agreement can also be classified as reckless lending or reckless credit if the credit provider conducted an assessment and concluded that the consumer does not understand the risks, costs, and obligations created by the proposed credit agreement, but still entered into the credit agreement with the consumer who considers it as free debt with no potential consequences attached.
- If the credit provider conducted an assessment and concluded that entering into the proposed credit agreement will cause the potential consumer to become over-indebted, but still enters into the credit agreement with the consumer and offers unrealistically free debt, this is also classified as reckless lending practice.
When is a reckless lending investigation done?
- When you apply to go under Debt Review and a counsellor suspects reckless lending, an investigation will automatically be done into your credit agreements to identify any possible credit agreements that may be classified as reckless lending or reckless credit.
- A consumer doesn’t have to go under Debt Review to qualify for a Reckless Lending Investigation. You can request to have an investigation done by applying to a Debt Counsellor for a declaration of reckless lending.
- A Reckless Lending Investigation is also done when a consumer is over-indebted and can’t afford to pay their debts. Being over-indebted means that you are not able to cover your living expenses and obligations to debt on time.
Debt Freeze’s experienced debt counsellors will investigate whether a credit provider gave a consumer reckless credit by investigating if:
- An assessment of your credit history was done to check if you could afford the loan.
- If you understood the contract obligations and risks.
- If you got all the information when you applied for credit, like a quotation.
Debt Freeze’s experienced debt counsellors will investigate whether a credit provider gave a consumer reckless credit by investigating if:
- An assessment of your credit history was done to check if you could afford the loan.
- If you understood the contract obligations and risks.
- If you got all the information when you applied for credit, like a quotation.
What happens if reckless lending can be proven?
If a Debt Freeze counsellor successfully proves that a credit provider recklessly gave a consumer credit, it can lead to several positive outcomes for the consumer.
- Reckless lending needs to be proved in court. In the best-case scenario, the court might declare the credit agreement entirely reckless. If this happens, you won’t be obligated to repay any of the debt associated with that agreement.
- If you lose and cannot prove that the credit provider gave you reckless credit, you will be obligated to pay all your debts as well as legal fees.
If you believe you have been a victim of reckless lending, complete the ‘no obligation’ free debt assessment form and one of Debt Freeze’s experienced debt counsellors will get in touch with you to help you get financially free.