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Cape Town - About 3.1 million South Africans had benefitted from regulations allowing for the removal of adverse consumer credit information, according to Trade and Industry Minister Rob Davies.
Asked by Tozama Mantashe, an ANC MP, what was the status regarding the implementation of the regulations and how he intended to manage the issue relating to the retention period to avoid a repeat of this kind of intervention, Davies said: “The regulations have been implemented and adverse information removed from the credit records of consumers.
"The paid-up judgments are being removed from consumers’ credit records on a continuous basis upon settlement of the judgment. The effective date for the removal process was 1 April to 31 May 2014,” he said.
At least 3.18 million consumers had benefitted from the removal process “according to the statutory data submitted to the NCR (National Credit Regulator) by the registered credit bureaus”, the minister reported in a parliamentary reply.
The draft regulations issued for public comment in July this year proposed amendments to the retention periods, he said “in order to address some of the current challenges. In addition, affordability assessment regulations have been prepared to tighten credit assessments conducted by credit providers to prevent reckless lending and borrowing”.
Said Davie: “These regulations required verification of income disclosed by consumers, obtaining of credit reports and approving credit timeously.”
According to the National Credit Regulator’s credit bureau monitor, close to half of the recorded 21 million consumers in South Africa have impaired credit records. This ranges from consumers with defaults, judgments, administration orders and consumers who were three months or more in arrears with account payments.
According to the Credit Ombud Manie van Schalkwyk not all negative information is removed from consumer profiles, but only two categories of information - adverse listings and paid-up judgments. Adverse listings included delinquent, default, slow-paying, absconded and not contactable consumers.
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Only paid up judgments which were taken between 2009 and 2014 were to be removed as part of the Removal of Adverse Credit Information exercise. Older judgments should have been removed already due to the maximum retention period of five years.
“Even if the default information is removed from a consumers’ credit profile, they are still legally obligated to pay the debt. If this is not done, they may open themselves up for legal action by the credit provider or being handed over to debt collectors. The removal of the information does not affect the creditor’s rights in any way,” said Van Schalkwyk.
Credit bureau had until June 1, to remove all information pertaining to defaults and paid-up judgments.
- Fin24
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