Faculty of Law
Department of Mercantile Law
Selected Highlights from Research Findings
Over-indebtedness – in other words, the inability of a consumer to satisfy the obligations of his or her credit agreements in a timely manner because of limited financial means or other obligations – is a growing problem in South Africa.
In view of this fact, the National Credit Bill was designed to establish legislation that protects consumer rights, promotes responsibility in the credit market, addresses imbalances in negotiating power between consumers and credit providers, and provides mechanisms for combating over-indebtedness.
Prof Melanie Roestoff and Stefan Renke of the Department of Mercantile Law conducted research aimed at evaluating the proposed measures in the National Credit Bill that are intended to combat over-indebtedness. An additional objective of their study was to determine the extent to which these measures comply with the general constitutional demands in terms of consumer protection.
Their findings indicate that the Bill does not do enough to bring South African legislation in line with measures in other jurisdictions. Corresponding measures in the USA, for instance, provide for programmes on personal money management for use in schools.
The legislation of that country also requires disclosure of the consequences of making only the minimum payment in respect of credit card (and other) debts. This requirement is intended to ensure that consumers are informed of the risks inherent in credit.
Renke and Roestoff point out at that South African legislation does not contain similar provisions, and that much more needs to be done in terms of consumer education. Nevertheless, they conclude that the new legislative initiatives are to be welcomed in that they seek, in the spirit of the Constitution, to codify certain basic consumer rights
Contact person: Prof M Roestoff.
|
