Speak Up Against Unfair Credit Listings

Speak Up Against Unfair Credit Listings

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August is of course women’s month, and the Credit Ombud is focusing on continuing to help women who have been unfairly listed with a credit bureau for unpaid debts. The Credit Ombud resolves complaints from consumers and businesses that are negatively impacted by credit bureau information or when a consumer has a dispute with a credit provider, debt counsellor or payment distribution agent.

According to Credit Ombud, Manie van Schalkwyk, if a debt collector lists a consumer with a credit bureau they must have followed a number of steps outlined in the National Credit Act (NCA). “Failing to do this can mean a consumer is incorrectly listed, which can have a severe negative impact on the consumers’ life, including affecting their job or chances of employment,” he says.

Real-life examples

According to the Credit Ombud, it is not unusual for a person to be incorrectly and unfairly listed for unpaid debts on a credit bureau. For example, the Ombud recently investigated a complaint from a consumer who had moved her children from a private school to a public school as the family was experiencing financial difficulties. Although the woman confirmed with the private school telephonically that her accounts were up to date, she received a letter from the school informing her that there was more than R4 000 in fees outstanding.

“The letter did not mention their intention to list the alleged default at the bureau, nor that the account would be handed over to a debt collector who will list the information at the bureau,” explains van Schalkwyk.  “Even after she had settled her account, she was still handed over to a debt collector without her knowledge.”

The debt collector then listed her as defaulting on her credit profile as she had failed to pay a penalty fee. Her employment was jeopardised and she lodged a complaint based on the fact that she had not been notified about any of the charges, including the penalty fee. She also was not informed at any stage of their intention to list her at the credit bureau. “We contacted the credit bureau to find out if correct procedure was followed before the consumer was listed and neither the school nor the debt collector had complied with the requirements in the NCA,” says van Schalkwyk. “The credit bureau was ordered to remove the listing from the consumer’s profile.”

Bad listings a threat to employment

Van Schalkwyk explains that having a default listing against a consumer’s name, even for a small amount, can not only cause financial distress, but prejudice their chances of getting a job or accessing further credit.

Under the National Credit Act (NCA), consumers have the right to access and challenge information held by a credit bureau and are entitled to get this information free of charge once a year. If the consumer requests the information more than once in a twelve month period they may have to pay a small fee which is also regulated by the NCA. “Consumers are entitled to challenge and request proof of the accuracy of information held by a credit bureau as well as that the correct procedure should have been followed prior to any listing,” adds van Schalkwyk. “Should a credit bureau fail to provide the consumer with proof of accuracy of information or that the stipulated procedure was followed, it is compelled to remove the disputed information from its records.”

Van Schalkwyk says there is a clear process to follow if you believe that incorrect information has been lodged with a credit bureau under your credit profile.

He suggests consumers do the following:

  • If your application for credit is refused or you have a bad credit rating, find out the name of the credit bureau which gave a report about you
  • Check if the information is correct
  • If it is not, contact the credit bureau and lodge a dispute
  • The credit bureau must give you a reference number
  • The credit bureau must correct the information or resolve the dispute within 20 business days
  • If you are not satisfied with the outcome, or if you did not get an answer from the credit bureau
  • Lodge a complaint with the Credit Ombud

During 2010, 3 870 disputes were opened at the office of the Credit Ombud of which more than 90% were finalised. The Credit Ombud ruled in favour of consumers in 69% of cases and 86% of all cases were resolved within 60 days.  The services of the Credit Ombud are provided free of charge to consumers who lodge complaints against credit providers, debt counsellors, payment distribution agents and credit bureau.

Consumers can contact the Credit Ombud office on 0861 66 28 37 or visit www.creditombud.org.za

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