Consumers have been warned to ensure that they do not borrow money from one of the 4,000 credit providers whose registration with the National Credit Regulator (NCR) has lapsed.
The NCR says lenders have an obligation to renew their registration by the 31st July annually.
But it has over the years seen defaulting lenders that now form part of illegal and bogus service providers that often charge exorbitant interest, impose hidden and often illegal fees and use dubious collection practices.
Leonie van Pletzen, the CEO of Micro Finance South Africa, and has cautioned consumers against illegal credit providers.
The first thing you must do is ensure that they are registered with the NCR. If you go to NCR.org.za there is a list of credit providers. So, if you go to any credit provider make sure that they are registered, but also dont offer them any documentation. They want to keep for instance you ID book, bank card or PIN numbers and make sure what the fees are that they are going to be charging. However, to effectively tackle this, more resources and stronger enforcement are needed which the MFSA fully supports, says Pletzen.
