The practice of retaining borrowers’ bank cards will no longer be tolerated in the credit industry.

National Credit Regulator (NCR) has bared its teeth against this practice by issuing Compliance Notices to 14 credit providers listed below for contravening certain provisions of the National Credit Act, in particular the retention of borrowers’ bank cards, pension cards, identity documents and/or pincodes.

The practice of retaining borrowers’ bank cards, pension cards and/or pin codes has been prohibited in terms of the Exemption Notice and the National Credit Act also prohibits these practices under Section 9(2) (l) and 91(b).

Peter Setou, Senior Manager for Education & Strategy at the NCR says in addressing the areas of noncompliance, the credit providers are required to return all bank cards and pension cards which are in their possession to all borrowers and to destroy all records of pin numbers and auto teller access information in their possession.

Setou adds that in the case of AA Cash Loans, the Compliance Notice dealt with the practice of
requiring or demanding that borrowers sign blank process documents before borrowers defaults withpayments. This practice is prohibited in terms of section 90 (k) (iii) of the National Credit Act. AA Cash Loans has been notified to refrain from demanding that borrowers sign blank process documents before a debt is due and payable and to destroy such documents which are in its possession.

According to Setou, the credit providers have 15 business days to lodge their objections with the National Consumer Tribunal in respect of these Compliance Notices.
Failure to comply with the notices will result in the matters being referred to the National Consumer Tribunal and the National Prosecuting Authority, which may institute legal action resulting in criminal prosecution. Credit providers who still retain bank cards and personal information numbers, or pension cards or identity documents should take note that the NCR will take harsh action against such contraventions.