Credit Ombud annual report results show how youth benefit from its free services

Credit Ombud annual report results show how youth benefit from its free services

The office of the Credit Ombud’s annual results show that youth accounted for 39% of 5 878 disputes opened in the office during 2013. Youth includes all consumers between the ages of 18 and 35 who knocked on the office’s doors for assistance with their complaints.

‘On the one hand it is encouraging to see that the youth are taking control of their credit problems and seeking help, but on the other, it is somewhat troubling to find that such a high number are already facing credit related challenges at such a young age,’ says Credit Ombud Manie van Schalkwyk.

The month of June is traditionally Youth Month in South Africa and highlights all youth related issues.  This year marks the 38th anniversary since the historical 1976 uprising, with this year’s theme being ‘Youth Moving South Africa Forward’.

The office of the Credit Ombud is an independent and impartial body which assists to resolve the complaints consumers may have with credit bureaus as well as non-bank credit institutions such as clothing and furniture retailers, micro financers and motor and housing financiers. 2013 saw a 6.67% increase in the number of disputes opened as compared to 2012 with the office closing 7 164 disputes, an increase of almost 40% when compared to the previous year.

‘Last year we recovered a record figure of R3.78 million for consumers.  This figure is made up of amounts refunded to consumers, debts written off and accounts adjusted in favour of consumers,’ says van Schalkwyk. ‘This is money that makes a real difference to consumer’s pockets, especially in this tough economic climate,’ he adds.

On average it took 47.7 days to resolve disputes, with each dispute costing in the region of  R 2 199.

Non-bank Credit Disputes

There has been a continued increase in the number of disputes in the non-bank credit category, with 3 483 disputes opened in 2013.  This amounts to a 57% increase when compared to the previous year, with an average of 290 cases being opened each month.

Complaints about emolument attachment orders, which was a much talked about and researched topic in 2013, also increased by 53% when compared to 2012. ‘A considerable amount of work went into investigating practices around emolument attachment orders in a bid to stamp out abuse and ensure fair treatment of consumers. The Emolument Attachment Order Task Team, as well as other committees, were all working hard to resolve the problems in this space.  We hope that work done will soon result in a much improved system to benefit both consumers and business,’ states van Schalkwyk.

Credit Information

The office opened 2 265 credit information disputes in 2013, a decrease of around 19% when compared to the previous year. On average 189 disputes were lodged each month, with a majority of these disputes falling in the ‘insufficient/incomplete credit information’ category. ‘This category of complaints, although still coming out as one of the most common type of complaints for 2013 where credit information is concerned, decreased by 30% when compared to 2012.  This speaks to the improved integrity of credit bureau information and the fact that credit bureaus are doing a good job in resolving such complaints’ notes van Schalkwyk.

The categories of ‘prescription of debt’ disputes and ‘granter not supplying accurate information’ disputes showed significant growth, but constitute a small percentage of complaints in this department. ‘The National Credit Amendment Act which was recently signed into law will definitely aide consumers when it comes to the unfair practice of listing and collecting on prescribed debts as it has increasingly become a problem that consumers were faced with,’ he adds.

Debt Counselling

The withdrawal of the Credit Providers Code of Conduct by the National Credit Regulator (NCR) last year had a significant impact on the operation of our office.  As a result of the withdrawal, it was agreed that the office of the Credit Ombud would no longer deal with debt counselling complaints and the last complaints were accepted in June 2013.

As a result, a total of only 130 debt counselling disputes were opened in 2013. All matters relating to debt counselling, totalling 249 for the year, were finalised by December 2013.  The NCR and the Credit Ombud have an agreement in place where all further disputes of this nature are referred to the NCR.

Consumer Education and Awareness

Consumer education remains one of the priorities which requires attention in the credit industry in order to address issues such as over-indebtedness in this country.  One of the mandates of the Credit Ombud is to educate consumers on finance and credit related matters.  Last year the office embarked on a new education strategy and formulated a training course that would benefit employees. ‘We realised that the information we shared with consumers during our workshops would be beneficial more so to credit active employees as they are more inclined to have credit related problems,’ says van Schalkwyk.

As a result, the Credit Ombud spent a good part of last year formulating a training strategy and material that was tailor made for employees.

In addition to delivering well packaged training material, part of the training includes conducting pre-workshop surveys which compare delegates’ knowledge and understanding of financial products to the results obtained by the Human Sciences Research Council when they conducted the same survey on the South African market.

‘After conducting the first pilot in August last year, we went on to conduct numerous sessions which all received raving reviews from the delegates and participating credit provider management teams alike,’ adds van Schalkwyk.

2013 marked a turning point in the credit industry with many legislative changes being introduced and implemented. ‘These changes will certainly change and shape the way our office operates in the future and will definitely benefit consumers in many ways.  Our office remains committed to serving consumers and credit providers and being a leading body within the credit dispute landscape,’ says van Schalkwyk.

Manie van Schalkwyk’s tenure as Credit Ombud will come to an end at the end of this year after serving in this position since the inception of the office in 2004. “It is a great privilege to work in this environment and to feel that one makes a difference in people’s lives.  The work is very rewarding and although we have made a significant impact in the last 10 years, there are still some challenges that needs attention.  I am sure the person who will follow me as Ombudsman will have the correct skills to take the organisation to the next level,’ adds van Schalkwyk.

The office of the Credit Ombud offers consumers assistance free of charge in any disputes they may have regarding unfair or inaccurate credit bureau listings as well as any disputes regarding garnishee orders, debt collection, statements of account or any disputes regarding their credit agreements. Consumers can contact the on 0861 66 28 37 or email