| (1) |
A credit agreement is reckless if, at the time that the agreement was made, or at the time when the amount approved in terms of the agreement is increased, other than an increase in terms of section 119(4)— |
| (a) |
the credit provider failed to conduct an assessment as required by section 81(2), irrespective of what the outcome of such an assessment might have concluded at the time; or |
| (b) |
the credit provider, having conducted an assessment as required by section 81(2), entered into the credit agreement with the consumer despite the fact that the preponderance of information available to the credit provider indicated that— |
| (i) |
the consumer did not generally understand or appreciate the consumer’s risks, costs or obligations under the proposed credit agreement; or |
| (ii) |
entering into that credit agreement would make the consumer over-indebted. |
| (2) |
When a determination is to be made whether a credit agreement is reckless or not, the person making that determination must apply the criteria set out in subsection (1) as they existed at the time the agreement was made, and without regard for the ability of the consumer to— |
| (a) |
meet the obligations under that credit agreement; or |
| (b) |
understand or appreciate the risks, costs and obligations under the proposed credit agreement, |
at the time the determination is being made.
| (3) |
When making a determination in terms of this section, the value of— |
| (a) |
any credit facility is the credit limit at that time under that credit facility; |
| (i) |
the settlement value of the credit agreement that it guarantees, if the guarantor has been called upon to honour that guarantee; or |
| (ii) |
the settlement value of the credit agreement that it guarantees, discounted by a prescribed factor; and |
| (c) |
any new credit guarantee is the settlement value of the credit agreement that it guarantees, discounted by a prescribed factor. |
Stamp Duties Act, 1968 (Act 77 of 1968)
