The Basics
In the previous blog article we covered the basics of credit literacy and touched on the current trends within the Botswana credit landscape and how these trends affect the consumers. Today we look at the consumer rights and responsibilities.
Consumers rights exist to ensure fair and transparent financial transactions. They are designed to protect individuals from predatory and illegal lending practices as well as ensure that they have the necessary information and resources to make informed decisions regarding credit and debt. Rights and responsibilities go hand in hand; “every right implies a responsibility”.
Here are some fundamental consumer rights in this context.
Right to Fair and Transparent Terms :Consumers have the right to receive clear and understandable terms and conditions associated with any credit or debt agreement. Lenders must provide all relevant information, including interest rates, fees, and repayment terms, in a language that the consumer can easily comprehend.
Right to Privacy: Consumers have the right to the privacy of their financial information. Lenders must protect the confidentiality of personal and financial data and adhere to privacy laws and regulations
Right to credit report access: Even though in Botswana we have no Credit Act , It is common practice globally for consumers to be entitled to access a copy of their credit report for free once a year from each of the major credit bureaus .This right allows consumers to monitor their credit history and address any errors or discrepancies.
Right to Disputes: If consumers find errors or inaccuracies in their credit reports, they have the right to dispute them with the credit bureaus. The agencies are required to investigate and correct any verified errors.
Alongside these rights, consumers also have an obligation to ensure responsible and ethical use of credit and debt. Being informed and making wise financial decisions are essential for maintaining financial health.
Financial education: Consumers should educate themselves about financial matters, including how credit works, interest rates, and the impact of debt on their financial well-being. Financial literacy is crucial for making informed decisions.
Provision of correct information: It is the consumer’s responsibility to provide the lender with truthful information regarding their financial standing including existing financial obligations. This aids the lender to objectively assess the consumer’s affordability and creditworthiness prior to extending credit.
Understanding credit agreements: Before signing any credit or debt agreement, consumers should carefully read and understand the terms and conditions. If there are uncertainties or confusing clauses, consumer should seek clarification from the lender, a regulating body or a financial advisor.
Timely repayment: Consumers are responsible for making payments on time. Late or missed payments can lead to additional fees, higher interest rates, and adverse record in the credit bureau. In the event that a consumer misses a repayment, they have the responsibility to inform the lender and come up with a plan to rehabilitate the account.
Seeking help: In complex financial situations, seeking advice from financial professionals or a credit counselors is a responsible step. They can provide guidance on managing debt ,recovering from over-indebtedness and general guidance on credit health.
Understanding consumer rights and responsibilities is essential for one’s financial well-being. By exercising their rights and
fulfilling their responsibilities, consumers can navigate the world of credit and debt with confidence, making informed decisions that contribute to their long-term financial stability.
Tsaone Kabomo is the founder of Credbase; a credit risk advisory firm. She has over 10 years of experience in the Credit Bureau industry. She completed her MBA with the University of Botswana in 2015and her Dissertation was on Consumer attitudes towards Credit Reference Bureaus
in Botswana.
*Photo Credit : BWgovernment Facebook Page- BWgovernment
