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Can banks discriminate after debt review?

A Fin24 user wants to know if it is legal for banks to question your debt review status if you have completed debt review and are now debt-free. She writes:

If one should be able to get credit after debt review, then why do Absa, FNB and Nedbank want you to declare upfront (point 6 below) when applying for car finance if you have been under debt review? 

They don't discriminate against insolvent parties, only debt review parties. Is this legal?

By continuing with the application process I confirm that:
• I am not a minor
• I have never been declared mentally unfit by a court
• I am not subject to an Administration Order
• I do not have any current application pending for debt restructuring or alleviation
• I do not have any current debt re-arrangement in existence
• I have not previously applied for a debt re-arrangement
• I am not under sequestration
• I do not have applications pending for credit, nor open quotations as envisaged in section 92 of the National Credit Act.

Lauren Wepener, Consumer Care Expert at Compuscan, responds:

While the act does afford protection against discrimination in respect of credit, it does so in respect of the constitution and the Promotion of Equality and Prevention of Unfair Discrimination Act. Section 60 confers the right to apply for credit to (among others) any adult natural person.

The same section confers the right to the credit provider to refuse to enter into a credit agreement with a consumer on reasonable commercial grounds consistent with its customary risk management and underwriting practices. Section 60 also provides that nothing in the act establishes a right of any person to require a credit provider to enter into a credit agreement with that person.

When applying for a loan, credit providers normally take other aspects such as sequestration, insolvency and debt review into account. The consumer does however have the right to the reason for the credit being refused and we advise you to rather visit the credit provider and make a face to face application, if possible, and get answers that way so that you can state your case. 

If a clearance certificate was issued and your credit report has been adjusted in respect of the certificate, you should be able to apply for the credit, as your credit report will have been adjusted in respect of the accounts that were listed on your clearance certificate.

- Fin24

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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