New credit regulations a blank cheque for recklessness

reckless expenditure

Through its new regulations, the Department of Trade and Industry (dti) might have unwittingly given consumers carte blanche to get as much credit as they can access from lenders, fears Neil Roets of Debt Rescue.

The new regulations forbid credit bureaus from accessing information on consumers’ creditworthiness to assist lending institutions in carrying out credit risk assessments. As a result consumers are expected to be handling their own paperwork.

The loophole the dti might have overlooked was that credit grantors would not be able to accurately assess the ability of consumers to repay their loans, said Roets.

The regulations might have been ill-timed considering that, overall, the situation for consumers remained “dire”, judging from increase in the seek protection from their creditors by going under debt review, he said. “We have recently had to substantial increase our staff compliment to cope with the increased demand for our (Debt Rescue’s) services.”

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