Credit Information Department

Our department dealt with 2 265 disputes in 2013, an almost 19% decrease as compared to the previous year. We’ve had a 10% increase in the number of disputes closed, with a total of 3 133 cases closed in 2013. This decrease in the number of disputes dealt with in 2013 can be attributed to the fact that the majority of disputes lodged at the credit bureaus are resolved in favour of the consumers and the disputed information is removed. The result is that the consumer will not have any reason to complain. However, we are concerned that at times the information that was removed is subsequently submitted to the bureaus again by the credit providers, thereby prejudicing the consumers who are under the impression that the disputed information had been removed.

We have already started seeing a rise in the number of calls from consumers wanting to know more about the process of the Removal of Adverse Consumer Credit Information, which will take effect on 1 April 2014. We have had training sessions with our staff members in a bid to capacitate and equip them with the knowledge required to deal with consumer queries.

Some of the key points contained in the Regulations are as follows:

Paid-up Judgments

  • Credit bureaus must remove all adverse information and information relating to paid up judgements within a period of two months from 1 April 2014 (effective date), meaning that by 1 June 2014 all information pertaining to the aforementioned must be removed.
  • This means that credit providers have their work cut out for them as they have to go through their records and inform the bureaus of all the judgements for the past five years which consumers have paid up.
  • Credit providers must be aware that in future, once a consumer has settled or paid a judgement, they will have the duty of informing one of the bureaus at which the consumer is listed about the paid up status.
  • The bureaus have the responsibility – within 7 days of receiving notification from the credit provider – to remove the adverse information pertaining to that judgement.
  • Secondly, the bureaus also have the duty to inform the other 13 registered bureaus – within 3 days of removing the listing – that the information has been removed from the consumer’s profile.
  • This new process will be mandatory going forward, even after the initial 2 month implementation period has lapsed.

Adverse Consumer Credit Information

  • All adverse information on a consumer’s profile must be removed by 1 June 2014.
  • In terms of the National Credit Amendment Bill, adverse consumer credit information will be removed on an ongoing basis – but only once it has been paid up.
  • Adverse consumer credit information is defined as follows:
    • Adverse subjective classifications of consumer behaviour – e.g. “delinquent”, “ default”, “slow paying”, “ absconded” and “ not contactable”.
    • Adverse classifications of enforcement action – e.g. “handed over for collection or recovery”, “ legal action” and “write-off”.
    • Dispute indicators.
    • Adverse consumer information contained in the payment profile – e.g. codes in payment profile lines such as J, K or L.

According to the Regulations, credit providers are also not allowed to use removed information of defaults for the purposes of scoring a consumer in future credit applications and they are also not allowed to re-submit removed data to the credit bureaus.

The new Regulation should positively affect consumers who have been struggling to find employment or to rent accommodation. On the other hand, it is not necessarily desirable for credit providers to lose an important section of the consumer’s payment history. However, the retention of the payment profile information will ensure that credit providers still have enough information available to them to assess credit applications. We are of the view that, unfortunately, the organisations who are going to suffer the consequences are the SMME’s, who do not have access to the payment profile information. Stifling the business of the SMME’s will not be good news for our economy as a whole.

Our office will work closely with our stakeholders, especially in the initial phases of the implementation of the new Regulations, to assist by means of providing clarity on the process to our members and consumers alike. If you need assistance in this regard, please feel free to contact me on cmatshiakgoshi@creditombud.org.za.