consumer terms

Acquaint yourself with consumer terms used in financial jargon.

households

95% of SA Households Can’t Make Ends Meet

’94.5% of South African households earn negative net incomes’

When a household’s expenses exceed their after-tax income, they are earning what we call a negative net income. Standard Bank recently released a report showing that a shocking 94.5% of South African households earn negative net incomes.  Their findings revealed that the poorest income groups suffer the biggest shortfall in income.

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Lewis Referred to Consumer Tribunal Again

On Tuesday, Lewis Group announced that its subsidiary, Lewis Stores would face the National Consumer Tribunal (NCT) for suspected contraventions of the National Credit Act (NCA). Lewis may be fined heftily if found to be at fault.

The National Credit Regulator (NCR) referred Lewis to the tribunal for allegedly breaching the NCA in its dealings with customers since 2007, the retailer said. Continue reading

prescribed debt

Collectors Continue to Demand Payment of Prescribed Debt

The Prescribed Debt Amendment

When the National Credit Act was amended in March 2015 to prohibit the collection of prescribed debt, we all breathed a sigh of relief.

The amendment was not introduced as a way for people to shirk their debt commitments. But rather because it’s not fair to be contacted by a debt collector out of the blue, demanding payment for an ancient debt. What collectors do is they buy old written-off debts and add years of interest and penalty fees to them. Then they phone you up and demand payment. Continue reading

Wise up about Credit Fees before You Cough up!

If you want to make a truly informed decision when applying for credit, it’s vital you ask your credit provider for a quotation or a pre-agreement that outlines all of the specific fees and costs you will be obligated to pay under the credit agreement. Another essential issue to address is whether or not these charges will be included in your monthly instalment, or if they are actually additional to this payment.

Below you will find descriptions of the kinds of charges you can expect to find in a standard pre-agreement, which have been broken down to help you better understand what you are actually getting yourself into, when you sign that contract. Continue reading

A Debt Solutions Face-Off: Debt Mediation vs. Debt Counselling

A Conflict of Interest

When the National Credit Regulator realised that voluntary debt mediation (VDM) compromised consumers by undermining the National Credit Act and professional debt counselling, they amended the act to show that they were not in support of this debt solution.

The problem with VDM is that Credit Providers (CPs) offer this service as a debt solution to consumers who owe them money, which creates a conflict of interest. This means that the CP’s motivation for providing this service is open to corruption, as they could covertly manipulate the situation in favour of their own interests. Continue reading

Interested in Group Savings? Watch Out for Stokvel Scams!


Don’t Be Fooled By Stokvel Scams 

If you’ve been approached to join a stokvel or are considering joining one, you should be cautious of stokvel scams, especially the current high-risk scheme presenting itself as a stokvel called Kipi Investments, Kipi Investment Dreams or Mydeposit247 Community. Chris Walker operates the scheme, as well as a number of related schemes, one of which the South African Reserve Bank (SARB) closed down in 2013, namely Defencex. Continue reading

What is the Consumer Financial Vulnerability Index?

The CFVI is a measure of our perception of our cash flow, buying power and general financial position as consumers, and this perception is continually affected by our changing economic environment.

In South Africa, the CFVI fell from 51.4 in the third quarter of 2014 to 51.2 points in the fourth. Continue reading

Are You a Victim of Securitisation Fraud?

The Commercial Crimes Unit (CCU) of the South African Police Services (SAPS) will be conducting in-depth investigations into the activities of the Big Four South African banks – Absa, Nedbank, Standard Bank and First National Bank, who are suspected of rampant securitisation fraud.

Securitisation is a bank practice, whereby the bank bundles thousands of home owners’ mortgages together and sells them to investors listed on the JSE.  Continue reading

What is the Repo Rate and How Does It Affect Me?

What is the Repo Rate?

The South African Reserve Bank (SARB) regulates our economy by lending money to the commercial banks at a set interest rate.  This interest rate is known as the repo rate and is also referred to as the repurchase rate.

SARB regulates the interest rates that commercial banks charge us, as consumers, for financial products, to prevent an excessive growth of bank lending and counter inflation. Inflation refers to the rate at which prices for services and goods increase over the years. Continue reading