MR KGOSI PULE PARLIAMENTARY PORTFOLIO COMMITTEE PRESENTATION 19 OCOTBER 2004

INTRODUCTION PARLIMENTARY PORTFOLIO COMMITTEE PRESENTATION   PARLIMENTARY PORTFOLIO COMMITTEE PRESENTATION SCOPE OF CONSUMER LEGISLATION 1. USURY ACT 2. USURY ACT EXEMPTION 3. CREDIT AGREEMENTS ACT 4. SALES AND SERVICE MATTERS ACT 5. ALIENATION OF LAND ACT

* Debt Instrument to disclose charges  1. USURY ACT  * Applies to credit transactions, leasing transactions, and money lending transactions; * Money lending transactions cap is R10 000- R500 000, credit and leasing transactions cap R0- R500 000   * Debt Instrument to disclose charges * Quarterly statement must be provided * Under certain circumstances arrear interest may be capitalized * Does not apply to lease agreements that exceeding R100 000

  USURY ACT EXEMPTION 713 OF 1 JUNE 1999 * 1992 : Micro loan exemption under the act Act for loans under R6 000,00 * 1999 : Exemption increased to R10 000,00 where payments not exceeding 36 months, except credit cards and overdrafts * To qualify for operating in the exemption environment : 1. Registration with a regulatory institution : MFRC 2. Maximum rate 3. Disclosure conditions 4. Cooling off period 5. Collection mechanism

CREDIT AGREEMENTS ACT   * Does not apply to money lending transactions * Applies to: 1. Leasing transactions 2. Installment sale transactions 3. Credit transaction * Applies to goods not more than R500 000,00 * Cooling off period where transaction concluded not on business premises * Due process mechanisms on repossession of goods * Limitations on security

  * Outlaw of certain advertisements * Does not apply to : 1.   Agricultural machinery 2.   Mining 3.   Engineering 4.   Consturction 5.   Road building 6.   Manufacturing * Duration on transaction less than six months

  ALIENATION OF LAND ACT * All land transactions must be in writing * Money may not change hands until land is registered (subject to certain exceptions) * Applies also to installment sale agreements and disclosure thereto

  LAY- BYE REGULATION UNDER SALES AND SERVICE MATTERS ACT * Relates to lay-bye transactions, which are defined : * Limits of 6 months * Agreement in writing, record keeping and no interest should be payable