Credit debt accumulated during the pandemic could be “written off”

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The DA made a stunning statement on how the ANC plans to ease the credit burden on South African citizens. The opposition party says it has discovered a confidential document – which was also seen by south african – which describes plans to remove “unwanted consumer registrations”.

Will the government cancel bad credit? It is not that simple…

The documents, apparently filed by the Commerce Department, say they aim to implement policies protecting people who have entered into credit agreements since April 1, who are now unable to make repayments:

“One of the main interventions of the government through the Ministry of Trade, Industry and Competition is the publication of regulations prohibiting the adverse listing of consumers by credit providers and the removal of credit information from adverse consumption on consumer credit records during certain defined periods. “

The regulations aim to help all consumers who are negatively impacted by the national state of disaster, provided that consumers are in good standing before the pandemic and their credit history deteriorates after the onset of the national state. disaster. “

DTIC document

Credit debt document alerts DA

The six-page document confirms that these plans are still in their infancy and will require engagement with both the public and the credit industry before they can be implemented. The six-month “grace period” would only apply to people who have recently entered into credit agreements that they can no longer enforce.

  • DTIC should engage and consult with the credit industry prior to publication for implementation.
  • Written comments on the discussion paper will be welcome later.
  • Any regulations will apply from the date of declaration of the national state of disaster and provide for termination of the regulations or September 30, 2020 – whichever occurs first.
  • Credit bureaus are given a period of 14 days to complete deletion of adverse consumer information from the date the regulation comes into force.
  • In short, the document seeks to wipe out all of the “negative credit records” that were created during the pandemic.

Warning against forgetting “suicidal”

It should be noted that under these proposals, consumers will still be responsible for all debts incurred up to and including the formal implementation of these regulations. Dean Macpherson is the shadow minister of commerce, and he has listed several loopholes in the not-so-secret file.

“While the idea behind this decision may seem altruistic and noble, the truth is that Minister Ebrahim Patel is trying to use populist rhetoric to clean up his battered reputation and gain the support of the ANC.”

“The intentions behind this ‘discussion paper’ could not be more grim, as it will use the Disaster Management Act to subvert parliamentary oversight and existing credit legislation.”

“What Minister Patel is doing is simply populist and suicidal for the credit industry. He subverts Law and Parliament. There is no way the Disaster Management Act was intended to be used like this.

Dean Macpherson

  • We are awaiting a response from the ANC to these allegations.

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