Drunk Man Goes Broke Overnight
You wake up in a hotel room still drunk, look around and all you see are empty bottles on bottles of alcohol, from Johnny Walker Black to Veuve Clicquot Champaign bottles and you start having flashbacks…
You remember walking into the club with your “squad” and requesting a table. Because it was pay week Friday you decide to buy a bottle of whiskey for you and the “squad”. Everything was great, met a few ladies, invited them over to join your table and you all started dancing.
Then everything went down south as you became the “life of the party”and you started showing off… buying bottles of Dom Perignon (because that’s what ballers do).
And before you knew it, you were in a hotel room with “your squad” and the girls you met at the club and everything else is a blur…
Fast forward to the present…
Now you are too scared to check your bank balance, because you went a little crazy last night. Your bills haven’t been paid, your rent is due, your wife and kids are at home expecting you to come home with money and what’s worse, you have a hangover from hell and you are still drunk from the night before.
So what do you do??… You decide to go to your nearest credit provider to get a loan to meet your monthly obligations.
You walk into the credit provider’s office in what some might call “a happy place”, still smelling like liquor. You fill out the forms and double check if you have all the documents required.
Now meet Mr. CP, he is a credit provider and he hasn’t made a sale all week and is desperately trying to keep up with the sales. Mr. CP saw that you (Mr. ST) was:
- A little drunk, meaning you shouldn’t be signing any legal forms.
- You could not afford this loan and would be over indebted if you signed for the loan.
But because Mr. CP was in desperate need of a sale, he looked the other way and granted the loan anyway. Both Mr. CP and you walked away happily until the end of the next month when you realized you wouldn’t be able to pay off the loan.
The above mentioned actions gives somewhat an example of how many of us find ourselves a victim of reckless lending.
Desperate consumer + greedy credit provider = reckless lending (and mostly over indebtedness)
Reckless Lending Skyrockets
Despite the practice being outlawed, reckless lending continues nonstop, so much so that the National Consumer Tribunal (NCT) has received double the number of complaints.
Many banks and credit providers are now being watched closely by the National Credit Regulator (NCR) as the Tribunal members highlighted that reckless lending was a major issue despite amendments to the National Credit Act. To give a loan to someone who cannot afford is illegal and unfortunately the people who apply for these loans are usually in desperate need of the money and do not read the terms and conditions before signing the contract.