Consumers no Longer Need to Provide Income Documents when Applying for Credit

Consumers no Longer Need to Provide Income Documents when Applying for Credit

A recent court ruling says consumers no longer have to provide payslips or bank statements when applying for credit. This ground-breaking ruling was the result of clothing giants Truworths, Foschini and Mr Price challenging the ‘proof of income’ being a pre-requisite for credit applications.

 

Whilst retailers will still have to conduct affordability assessments in line with the National Credit Act (NDA) and provide proof of ID, the ruling ends this discriminatory practice where consumers such as informal traders, freelancers and the self-employed could not access lines of credit as they could not provide payslips or bank statements.

The court was of the opinion that the section frustrates the aim of the National Credit Act, which is to ‘promote the development of a credit market that is accessible to all South Africans, and in particular to those which have historically been unable to access credit under sustainable market conditions’.

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