There are many reasons why a consumer may default in his payments to a credit provider. Notwithstanding these reasons, the credit provider must follow certain procedures to enforce the agreement.
The first step, is for the credit provider to deliver to the consumer a written notice in terms of Section 129(1)(a) of the National Credit Act 34 of 2005 (“NCA”), notifying the consumer of the default and proposals as to what the consumer may do to resolve any disputes that he/she may have with the agreement or to work out a plan for the payments due under the agreement to be brought up to date. The consumer has ten business days to respond to the credit provider once he/she has received the letter. It must be noted though, that the consumer is under no obligation to respond to the notice in terms of Section 129(1)(a) (“the S129 notice”).
The consumer must be in default with his/her payment for at least twenty business days in terms of S130(1)(a) of the NCA, before the credit provider can deliver the S129 notice to the consumer.
The consumer must further be aware that the credit provider is legally bound to deliver the notice in terms of the S129 notice to the address of the consumer that is cited on the credit agreement – the address that the consumer chose when he/she signed the agreement. Section 129 also states that the notice must be sent by registered mail or to an adult person at the location designated by the consumer i.e. by hand delivery.
It falls upon the shoulders of the consumer to inform the credit provider, in writing, by hand or electronic mail, of any changes to his/her designated address in respect of receiving notices which defer from the credit agreement, to enable the credit provider to change the consumer’s records. Should the consumer not inform the credit provider of the new details, the credit provider will be bound to use the address as per the credit agreement and the consequence of this, is that the consumer will not receive the S129 notice, and when the ten business days have expired for the consumer to timeously give the credit provider his intentions of how he/she wishes to deal with the default payments, the credit provider will be within its rights to proceed with the issuing and serving of the summons, incurring legal costs for the account of the consumer.