CONTINUATION OF SU 2

Question 1

3 FORMS OF RECKLESS CREDIT:

Answer 1

1. the credit provider failed to conduct the credit assessment.
2. if the outcomes of the credit assessment shows that the consumer did not understand and appreciate the risks, costs and obligations under the agreement, but the credit provider nevertheless entered into the agreement
3. if the outcome of the assessment shows that entering into the agreement would cause the consumer to be over-indebted, but the credit provider nevertheless entered into the agreement.

Question 2

A credit agreement is unlawful if inter alia:

Answer 2

1. was concluded with a consumer who is an unemancipated minor and was not assisted by a guardian.
2. the consumer is subject to a court order holding him mentally unfit
3. the consumer is subject to an administration order in terms of s74 of the Magistrate’s Court Act and the administrator did not agree to the agreement.
4. resulting in negative option marketing
5. was concluded with an unregistered credit provider.

Question 3

The order of the court for reckless credit agreements may be:

Answer 3

1. setting aside all or part of the rights and obligations of the consumer under the agreement
2. suspending the force and effect of the credit agreement.

Question 4

CREDIT GUARANTEE:

Answer 4

an agreement constitutes a credit guarantee if a person undertakes or promises to satisfy on demand any obligations of another consumer in terms of a credit facility or a credit transaction.