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Retailers are obliged to verify a person’s income, despite March High Court ruling

───   OLEBOGENG MOTSE 15:42 Wed, 06 Jun 2018

Retailers are obliged to verify a person’s income, despite March High Court ruling | News Article

Lenders and retailers are obliged to verify a person’s income from a reckless lending perspective.


This is according to the Vice President of Financial Services at TransUnion, Stephen de Blanche, following the Western Cape High Court‘s ruling in March that removed the income-verification requirements from the National Credit Act (NCA), which meant consumers would no longer have to present payslips or bank statements to lenders. He says the ruling only gives lenders the option of being able to do so because it’s not compulsory. He cautions this does not absolve retailers of their obligation to verify a person’s income. He acknowledges while there are benefits to the ruling, there are some risks, which will force retailers to be more vigilant when granting credit to consumers.

He says the new legislation will allow people, who previously did not formally qualify for credit, to now have the opportunity to do so. He says that could result in lenders lowering their standards for credit-worthy consumers who are unbanked.

The Western Cape High Court ruled in favour of a number of retailers, namely Truworths, Foschini and Mr Price, in March this year. The retailers were challenging the requirements of the National Credit Act, according to TransUnion. The National Credit Regulator has since published a guideline for comment.


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