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You may be aware that all creditors fall under the National Credit Act (NCA), but did you know that if you deal with a pawnbroker you are also protected?
Pawnbrokers fall under the NCA because they are in the business of providing credit, Peter Setou, the senior manager of education and strategy at the National Credit Regulator (NCR), says.
“Pawnbrokers that have at least 100 agreements on their books, or a total outstanding debt of more than R500 000 owed to them under pawn agreements, must register with the NCR,” Setou says.
However, those that do not meet the conditions for registering with the NCR still fall under the Act, and their clients also enjoy its protection.
Setou says although pawnbrokers are exempt from having to conduct an affordability assessment before they grant you a loan, they must comply with a number of other NCA requirements, such as:
- The credit agreement must state an end date;
- The safekeeping of property given to the pawnbroker is the pawnbroker’s responsibility;
- The pawnbroker must return your property once you have met your obligations;
- If the pawnbroker fails to return your property on the termination of the agreement, you can lodge a complaint with the NCR or the Provincial Consumer Affairs Office;
- If your property is lost due to circumstances beyond the control of the pawnbroker, such as in a fire, you are entitled to be refunded an amount equal to its fair market value less any outstanding amount you owe;
- If the failure to return your property is due to a reason within the control of the pawnbroker (for example, the item was sold), you are entitled to double its fair market value less any outstanding amount you owe;