Truworths - Credit life insurance??

According to Section 106 1(a) of the National Credit Act, creditors must include credit life insurance to credit agreements. But it seems that many companies are not making consumers aware and because of this, consumers are left in the dark. Well, I spoke to a lady at the legal department of Truworths and towards the end of our telephonic conversation, I brought up credit life insurance and then she asked for my ID number. Upon her inspection, she advised me that there was no credit life insurance on my credit facility and she also advised me that it was not mandatory.

The proposed section 106(1A) of the National Credit Act makes it obligatory for a credit provider and a consumer to “enter into credit life insurance” in circumstances where the term of the credit agreement exceeds six months and the principal debt does not exceed R50 000. Unlike in the case of section 106(1), the “credit life insurance” may not be concluded with a third party; it MUST BE CONCLUDED WITH THE CREDIT PROVIDER. (Let’s take into account the lady from legal department told me that I had no credit life insurance and according to her it wasn’t mandatory for Truworths to include it)



The proposed section 106(4) provides that, if a credit provider proposes to the consumer the purchase of a particular policy of credit life insurance as contemplated in subsection (1A), “the consumer must be given ... the right to waive that proposed policy and substitute such a policy of the consumer’s own choice”.( not one consultant from Truworths ever mentioned or brought credit life insurance when the account was opened)

Having said that, it’s not apparent how the consumer could “substitute a policy of the consumer’s own choice” in circumstances where the proposed section 106(1A) makes it OBLIGATORY or the policy to be issued by the credit provider(Truworths). ( so the lady from the legal department made it clear that it wasn’t mandatory??)

How many other customers are not aware of this?? Creditors need to be transparent with the arrangement of credit agreements but some companies just send store cards in the mail and a consumer can “activate” it in store just by presenting an ID. What happened to the proper way of speaking to the consumer about exactly what needs to get done? Following proper processes? So even though Truworths falls under the National Credit Regulator (1)and based on the fact that the “credit insurance “ falls under the Fais Ombud (2), who gets the official complaint, 1 or 2???

The Recoveries Manager made certain comments about the National Credit Act which was untrue and therefore that's nom-compliance according to the FAIS Act. Now we know where that complaint is going to go.