Consumers should be vigilant when nearing the end of their administration orders. The Credit Ombud has seen a trend developing where consumers who have paid off their debts through administration orders, often still find themselves adversely listed regardless of having paid their debts.
Van Schalkwyk explains that when consumers go under administration, the accumulation of interest and administrator fees is not taken into account when calculating the amount that the consumer will have to pay in order to service their entire debt. The effect of these charges, coupled with the fact that when under administration payments are only made once every three months, results in interest and fees adding up and as such increasing the actual amount that needs to be paid.
“Consumers need to take into account that paying off the administration order does not automatically amount to the listing being removed from their credit profiles,” adds van Schalkwyk. “The consumer should request that their administrator apply for a rescission order in terms of section 74Q of the Magistrates Act in order to rescind the administration order.”
The consumer will however incur costs for this application. “Once the rescission order is submitted to the bureaux, the listing will be removed,” he adds.
When a consumer has paid up their debts, they should be given a 74U certificate which states that their debts have been paid up and the administration order has lapsed. Unfortunately this certificate does not have the effect of correcting the listing on the consumer’s credit profile.
Van Schalkwyk highlights that many a time consumers confuse the rescission order with the 74U certificate when applying to get the administration listing removed from the credit bureau. The 74U certificate only serves to update the consumers’ credit profile as being paid.
“In terms of the National Credit Act, an admin order listing will remain on the consumer’s profile for a period of 10 years even if the debt has been paid off,” says van Schalkwyk.
“In many instances we receive complaints from consumers relating to them still being listed as being under administration when they request copies of their credit reports, even though they have paid up their debts, ” says Credit Ombud, Manie van Schalkwyk. “What consumers don’t realise is that there is a specific process to follow in order to remove an administration order listing from their credit profiles once they have paid up their debts.”
He advises consumers to be proactive and contact their credit grantors to request a full statement in order to ensure that there are no outstanding amounts when nearing the end of their payment period. Doing this, along with applying for the correct order from the courts will assist them with having their names cleared faster.
Should consumers find that even after submitting the rescission order and following the correct steps to have their listing removed they do not receive assistance, they can contact the office of the Credit Ombud to get assistance with their matter.
To find out more about the complaints process log onto http://www.creditombud.org.za/ or call 0861 OMBUDS (0861 662837) or email us on ombud@creditombud.org.za.
