Newsletter – July 2020
Newsletter – July 2020
The National Credit Amendment Act (hereinafter referred to as the NCAA) and its Regulations became operational on Friday, 13 March 2015. It entails the broadest changes to the NCA to date. The NCAA amends the Act in the following ways:
- Amends certain definitions;
- Alterations to the governance structure of the NCR;
- Empowers the CEO to delegate certain functions to other officials of the NRC;
- Provides for the registration of payment distribution agents;
- Sticker measures relating to dc’s, their conduct and their practices;
- Allows registrants to voluntarily cancel their registration;
- Empowers the Minister to issue a notice for the removal of adverse consumer credit information;
- The automatic removal of adverse consumer credit information;
- Empowerment of the National Consumer Tribunal;
- Declaration of reckless credit agreements;
- The registration and accreditation of ADR agents; and
- Any other connected matters
Changes relating to Adverse Consumer Credit Information compelling credit bureaux to automatically remove any adverse classifications of consumer behaviour or enforcement action relating to a consumer within seven days from receipt of information regarding payment from the credit provider.
The credit provider must submit the following information to all registered credit bureaux within seven days after settlement of any obligation by a consumer under any credit agreement, regarding;
- an adverse classification of consumer behaviour;
- an adverse classification enforcement action against a consumer;
- an adverse listing recorded in the payment profile of the consumer; or
- a judgement debt.
WHAT HAPPENS IF THE CREDIT PROVIDER FAILS TO SUBMIT SAID INFORMATION?
- The consumer may lodge a complaint against such a credit provider with the National Credit Regulator.
WHAT DOES ‘adverse classification of consumer behaviour’ MEANS?
- classification relating to consumer behaviour and includes a classification such as ‘‘delinquent’’, ‘‘default’’, ‘slow paying’’, ‘‘absconded’’, or ‘‘not contactable’’.
WHAT DOES ‘adverse classification of enforcement action’ MEANS?
- classification relating to enforcement action taken by the credit provider, including a classification such as “handed over for collection or recovery”, “legal action”, or “write-off”.”
In terms of R 18(2) the bureau must take all reasonable steps to ensure that the information it retains is up to date.
The retention periods for credit bureau information as prescribed by regulation 17 were amended by the NCAA.
Maintenance orders for the first time also have to be included in the credit report of a consumer (see category 8 in the table below)
Listings may only be submitted to credit bureaux when:
- The consumer has been in arrears for three consecutive billing cycles;
- The consumer has been notified with 20 business days’ notice;
- No listings may be submitted if payment is received or if the consumer disputes liability during the notice period;
No listings on prescribed debt may be submitted.
Adverse information must be removed by the bureau