Article written by Meegan Henkeman of Schoeman Tshaka Attorneys
Consumers have always struggled to remove adverse consumer credit information from their credit records with credit bureaus. This was the position even after settling judgments and paying debts in full. Applications made to court in an attempt to remove such information, upon the repayment of the debt tends to be time consuming and costly. The Removal of Adverse Consumer Credit Information and Information Relating to Paid Up Judgments Regulations, 2014 (‘the Regulations’) which was gazetted on the 26 February 2014 in Government Gazette Notice, No. 37386 has been a sigh of relief to consumers in this regard.
In respect of the Regulations, all registered credit bureaus are required to remove adverse consumer credit information and information relating to paid up judgments from their database. According to the Regulations “adverse consumer credit information” means;
1. Adverse classifications of consumer behavior are subject classifications of consumer behavior and include classifications such as ‘delinquent’, ‘default’, ‘slow paying’, absconded or not contactable’;
2. Adverse classifications of enforcement action, which are classifications related to enforcement action taken by the credit provider, including classifications such as ‘handed over for collection for recovery’, ‘legal action’, or ‘write-off’;
3. Details and results of disputes lodged by consumers irrespective of the outcome of such disputes;
4. Adverse consumer credit information contained in the payment profile represented by means of any mark, symbol, sign or in any manner or form.
It should be noted that the debt review information, rehabilitations, sequestrations and all other administration orders are not included in the Regulations. This once-off-removal applies to all information which is stored on the consumer’s credit report as at 1 April 2014. If a consumer incurs any new behavioral or judgments after 1 April 2014 it will be reflected and recorded on the bureau database. In this instance consumers are still legally liable for their debt, because the Regulations only require the removal of adverse information from the credit bureau records. However this does not mean that the consumer’s debt will be erased.
In terms of the Regulations all credit providers has an obligation to submit all information to registered credit providers in respect of paid up judgments within 7 days of receipt of such payment from the consumer.
In terms of the Regulations all registered credit bureaus has to remove adverse consumer credit information and information which relates to paid up judgments as from the 1 April 2014. Registered credit bureaus are given a time period of 2 months to remove the required information. Failing which the credit bureau may also request an extension of not more than 7 days. In terms of Regulation 2 (e) credit bureaus are obliged to notify all other registered credit bureaus within 3 days of removing the said information. Within 3 days of receiving such notification the registered credit bureaus have to remove similar adverse credit information and information in respect of paid up judgments from its records. This information may not be supplied to any third person on request thereof.
The Regulation seeks to create an incentive for consumers to re-pay their debt more timeously and seeks to encourage consumers to approach credit bureaus to check their credit records. By doing this it helps consumers to identify in time whether there has been any fraud committed using their identity. This process allows consumers credit records to be cleared immediately once all debts are settled in full. Many consumers are unaware of this Regulation and often find out after the fact that fraud has been committed using their identity. It is therefore important that consumers should always be vigilant in dealing with
Meegan Henkeman, Schoeman Tshaka Attorneys (Cape Town)
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