THE FACTS
Ronnie Masilela from Kwaggafontein, Mpumalanga said he had two loans with African Bank, one for a credit card and another one for a personal loan. He had some financial difficulty repaying the two loans since 2011. The bank contacted him in 2014 and offered for him to pay them back at a reduced rate.
The last payment Ronnie made on his personal loan was in 2014 and the bank never contacted him about it again. They called again in 2016 to ask Ronnie to pay his credit card, not the personal loan account. In 2017, they started contacting him to pay the personal loan.
Ronnie said according to the National Credit Act if the creditors haven’t contacted him in three years the debt falls away. Ronnie wants to know if the bank can make him pay for a debt that is older than three years.
WHAT I DID
I sent the case to SCORPION LEGAL PROTECTION for professional analysis and advice.
SOLUTION
The National Credit Act came into effect in March 2015 and protects the rights of a consumer by banning collection of debts that have been erased by prescription. But the Act doesn’t have a retrospective effect which means it does not protect consumers who entered into credit agreements before 2015.
The reader entered into the credit agreements with African Bank in 2011 for both the credit card and personal loan. Because of this, he is not protected by the National Credit Act. It would be best for Ronnie to make payment arrangements and stick to the agreed payment structure.