Credit regulator warns of online scammers

World Consumer Rights Day this year focused on “making the digital market place fairer”, said Obed Tongoane, deputy chief executive officer at the National Credit Regulator (NCR).

According to the National Credit Act (NCA), all credit providers must register with the NCR before granting credit to consumers. Bogus credit providers who operate online often con unsuspecting consumers out of their hard earned money.
“This usually happens to consumers who are ‘blacklisted’ and cannot get credit from banks or other formal institutions,” Mr Tongoane said.

“Blacklisted is used generally to describe an adverse listing on a consumer’s credit report which will affect you when you apply for credit.

“Online scammers take advantage of ‘blacklisted’ consumers because they know they have nowhere else to go. A bogus credit provider is one that is not registered with the NCR, but uses a legitimate credit provider’s registration number and the business premises listed on its website does not exist,” he said.

Mr Tongoane warned consumers not to make any upfront payment to credit providers when applying for a loan.
It is unlawful for credit providers to charge consumers any upfront fees.

“If you have paid an upfront fee to a fake credit provider, you should open a criminal case with the police,” he said.
Consumers will not be able to get their money back as most of these credit providers do not exist.

“Debt counselling is not a savings mechanism although some companies promise consumers savings of up to 60% of their monthly instalments. It is a relief measure so people are able to pay all their credit providers and to be able to afford their living expenses such as food, transport, school fees, for example. And most importantly, consumers will not lose their assets as long as they continue paying while under debt counselling,” said Mr Tongoane.

Consumers who receive calls from debt counsellors and debt counselling companies promising them savings on their monthly instalments, breaks from their monthly instalments or anything that sounds too good to be true, will find it probably is.

Consumers should avoid giving those debt counsellors or their call centre agents their identity numbers and their banking details telephonically.

“Remember, you cannot be placed under debt counselling without your consent and without an identity number,” said Mr Tongoane.

“Consumers should contact the National Credit Regulator for assistance. Remember that telephonic consent is a legitimate consent. Do not agree telephonically if you are not sure.”

 You can call the NCR at 0860 627 627 or 011 554 2700 or visit: www.ncr.org.za for more information.

Consumer Rights Day is celebrated annually during consumer month worldwide on March 15.

Eye on resellers

In keeping with the digital theme, Cornellé van Graan, chairperson of the Direct Selling Association of South Africa (DSASA), outlines what measures her organisation takes to protect consumer rights: “When a product does not work properly or a service provider does not deliver as expected, indignant consumers are quick to assert that they know their rights, but they often do not. Most people are too busy to find out what their rights really are and tend to rely on assumptions, advice from a friend or colleague, or a vague recollection of something that they had heard or read.”

The sector is growing rapidly and contributed nearly R13 billion to the South African economy in 2016. Ms Van Graan said direct selling is attracting entrepreneurs, with established social networks of likeminded people and who require the flexibility of working for themselves.Of the over 1.3 million independent direct selling resellers, nearly a million are independent female business owners and 86% are black.

“It is a dynamic, growing industry which can only be sustainable if consumers have confidence in the professionalism, customer service and business ethics of the resellers and the direct selling companies which they represent.”

For this reason, the DSASA is uncompromising regarding its code of ethics, a legally binding document that members and resellers are obliged to comply with as a condition of membership.

“The code has been in place for several years,” said Ms Van Graan. The focus now is on increasing awareness of the code, so that consumers and independent resellers are aware of their rights and responsibilities. It is important that consumers and resellers know what to do if the code is not being adhered to.”

The code ensures that member companies provide resellers with accurate information about products and services; sufficient and ongoing training to resellers on product information; training on ethics and marketing practices.

It also requires resellers to respect customer wishes to discontinue a product demonstration or sales interaction; ensure product and service rates, descriptions and claims are accurate and provide a receipt to the consumer allowing the consumer to cancel any purchase order of products or services within at least five working days from the date of purchase and receive a full refund.

“The code does have teeth and DSASA ensures that members comply. The first port of call in a dispute is the reseller. If they are unable to resolve the issue, it can be escalated to the related member company,” said Ms Van Graan.

The continued growth of direct selling in South Africa means more consumers will be buying more products and services from more independent resellers, more often.

The code ensures that these transactions are professional and ethical and that both consumer and reseller are protected.

Visit: www.dsasa.co.za to see the code of conduct or email admin@dsasa.net for help.

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