The process to follow when adverse credit information is listed against a consumer's record.
The article is regarding the requirements to list adverse credit information against a consumer in terms of the National Credit Act 34 of 2005, and the dispute process a consumer must follow to remove the adverse listing.
A consumer is “blacklisted” when defaulting on a specific account. It is important to take note that it is not the consumer itself being listed, but rather the consumer's credit information that is provided to a registered credit bureau. This listing is called adverse credit listing, which is regulated by the National Credit Act 34 of 2005 (“the NCA”).
In terms of Regulation 18(7) of the NCA, registered credit bureaus can only receive consumers' credit information from, among others, an organ of state, a court, educational institutions, and any person who supplies goods, services or utilities to consumers. When a party submits credit information to credit bureaus, Regulation 19(3) provides that such information must be accurate, up-to-date, relevant, complete, valid and not duplicated.
Before a person can submit adverse information to a credit bureau, the person must give the consumer 20 business days' notice thereof. Should the consumer settle the outstanding amount within the 20-day period, or dispute liability for the outstanding amount, the adverse credit information cannot be submitted to the credit bureaus. If the consumer does not settle the outstanding amount within the 20-day period, the credit provider can, without the consumer's consent, submit adverse credit information to any registered credit bureau.
Can a consumer challenge the accuracy of any adverse credit information submitted to a credit bureau? Section 72(1)(c) of the NCA makes provision for a consumer to challenge the accuracy of any adverse credit information submitted to the credit bureaus and requires the credit bureau to investigate the accuracy of any challenged information, without charge. If no evidence is found, or the information challenged is incorrect, such information must be removed from the consumer's record. The consumer will then be entitled to compensation (limited to the cost of correcting the incorrect information) from the person who submitted the incorrect information to the credit bureau.
Should credible evidence be found to prove the accuracy of the information challenged, the consumer must be provided with a copy of such evidence. In terms of Section 72(4) of the NCA, the consumer can further challenge the evidence found within 20 business days upon receipt thereof, by lodging an application to the National Credit Regulator to investigate the disputed information.
Having adverse credit information listed against consumers may bring about severe financial consequences. It is of the utmost importance to seek legal advice when receiving notice of an adverse listing to ensure that only correct and accurate information is listed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
