NCA Chapter 5 Part E

National Credit Act, 2005 (Act No. 34 of 2005)

Chapter 5 : Consumer Credit Agreements

Part E : Alteration of credit agreement

116. Alteration of original or amended agreement document

Any change to a document recording a credit agreement or an amended credit agreement, after it is signed by the consumer, if applicable, or delivered to the consumer, is void unless-

a) the change reduces the consumer’s liabilities under the agreement;

b) after the change is made, unless the change is effected in terms of section 119(1)(c), the consumer signs or initials in the margin opposite the change;

c) the change is recorded in writing and signed by the parties; or

d) any oral change is recorded electromagnetically and subsequently reduced to writing.

117. Changes by agreement

1) If the parties to a credit agreement agree to change its terms, the credit provider must, not later than 20 business days after the date of the agreement, deliver to the consumer a document that-

a) reflects their amended agreement; and

b) complies with the requirements set out in section 93.

2) This section does not apply in respect of an increase or decrease to the credit limit under a credit facility, subject tosection 119(6).

118. Reductions to credit limit under credit facility

1) At any time the consumer under a credit facility, by written notice to the credit provider, may-

a) require the credit provider to reduce the credit limit under that credit facility;

and

b) stipulate a maximum credit limit that the consumer is prepared to accept.

2) After receiving a notice in terms of subsection (1), the credit provider must give the consumer written confirmation of-

a) the new credit limit, which must not exceed the maximum limit stipulated by the consumer, if any; and

b) the date on which the new credit limit is to take effect, which may not be more than 30 business days after the date of the notice from the consumer.

3) Subject to sections 61 and 66, the credit provider under a credit facility, by written notice to the consumer, may reduce the credit limit under that credit facility to take effect on delivery of the notice.

4) If, at the time a new credit limit takes effect in terms of this section, the settlement value under that credit facility is higher than the newly established credit limit, the credit provider must not treat that excess as an over-extension of credit for the purpose of calculating the minimum payment due at any time.

5) A credit provider must not charge the consumer a fee for reducing a credit limit.

119. Increases in credit limit under credit facility

1) A credit provider may increase the credit limit under a credit facility only-

a) temporarily, as contemplated in subsection (2);

b) by agreement with the consumer, subject to subsection (3)-

i) in response to a written or oral request initiated by the consumer at any time; or

ii) with the written consent of the consumer in response to a written proposal by the credit provider, which may be delivered to the consumer at any time; or

c) unilaterally, in accordance with, and subject to the limitations set out in, subsection (4).

2) An increase in the credit limit under a credit facility is temporary if-

a) the credit provider honours an instrument issued by the consumer, despite the fact that it results in a debt that exceeds the established credit limit; or

b) the credit provider agrees to raise the credit limit in response to a request from the consumer in order to accommodate a particular transaction, on condition that the preceding credit limit will again apply within a specified period, or after a specified occurrence has taken place.

3) Before increasing a credit limit in terms of subsection (1)(b), the credit provider must complete a fresh assessment of the consumer's ability to meet the obligations that could arise under that credit facility, as required by section 81.

4) If the consumer, at the time of applying for the credit facility or at any later time, in writing has specifically requested the option of having the credit limit automatically increased from time to time, a credit provider may unilaterally increase the credit limit under that credit facility-

a) once during each year, as measured from the later of-

i) the date that the credit facility was established; or

ii) the date on which the credit limit was most recently altered in accordance with subsection (1)(b); and

b) by an amount not exceeding the lesser of-

i) the average monthly purchases or cash advances charged to the credit facility by the consumer; or

ii) the average monthly payments made by the consumer,

during the 12 months immediately preceding the date on which the credit limit is increased.

5) For the purposes of subsection (4), a specific request-

a) does not include-

i) an oral request or assent by the consumer; or

ii) a standard provision of an agreement, the whole of which is accepted by the consumer; but

b) does include-

i) a written request in any form authored and signed by the consumer and delivered to the credit providerat any time; or

ii) a standard form option-

aa) authored by the credit provider and presented for consideration by the consumer alongside the alternative of having credit limits increased only as contemplated in subsection (1)(b); and

bb) assented to by being initialled or signed by the consumer.

6) If, when increasing the credit limit under a credit facility, the credit provider alters any other term of the credit agreement, the credit provider must comply with the requirements set out in sections 93 and 117.

7) An increase in a credit limit in terms of subsection (4) is not unlawful in terms of section 74(2).

120. Unilateral changes by credit provider

1) Despite any provision to the contrary in a credit agreement, a credit provider may not unilaterally change-

a) the period for repayment of the principal debt, except to lengthen it; or

b) the manner of calculating the minimum payment due periodically under a credit facility, subject to section 118(4).

2) Except as otherwise provided for in section 104, a credit provider must give the consumer written notice of at least five business days of a unilateral change to a credit agreement and in that notice must set out the particulars of the change.

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