Know your credit rights

 

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As World Consumer Rights Day is celebrated across the world on 15 March the Credit Ombud is one of the bodies in South Africa which continues to play a significant role in the South African credit landscape to assist consumers to know about and exercise their credit rights.  Consumers phone or write to the Credit Ombud about their unresolved disputes and then each case is dealt with individually, on its own merits and free of charge – giving consumers access to swift and independent dispute resolution. To demonstrate its effectiveness, the office has responded to 12 312 complaints and enquiries and has recovered just over R7.6 million for South African consumers in 2015.

“This is money that consumers would have had to pay over to their credit providers, or in some cases, consumers over-paid and had we not stepped in and assisted them to resolve their complaints they would be out of pocket,” says Credit Ombud Nicky Lala Mohan. “The Credit Ombud assists consumers on a daily basis to have accounts rectified, balances written off, credit bureau records updated and corrected and money that is due paid back to them”, he adds.

An example of the type of things that can go wrong is the following:

Our offices investigated a matter where the consumer entered into a credit agreement and duly tendered payment of her monthly instalments, by way of cash deposits. She reached the expiry of the contract and paid the final instalment. The consumer studied her statement of account and noticed that some payments did not appear thereon. The consumer then approached the credit provider informing them of such, however this dispute remained unresolved. She chose to escalate this matter to our offices, for our intervention herein. The credit provider requested proof of payment for the unallocated amounts. Fortunately the consumer retained proof of all payments made on this account, and we strongly recommend that all consumers retain their proof of payments. We provided proof of payment to the credit provider, who then correctly allocated the payments, which resulted in a refund of R970.62, due to the consumer. A paid-up letter was also issued to the consumer as proof that this account was indeed settled. Her credit bureau records were also rectified.

Consumers should be aware that in terms of the National Credit Act, a consumer has a right to receive a statement of account. The credit provider is obliged to deliver a statement of account to the consumer, in the manner chosen, either by fax, email, post or printable web-page. Furthermore, the consumer has a right to dispute any transaction with the credit provider, in particular a debit or credit, appearing on the statement of account.

In addition to resolving disputes with credit providers relating to non-bank credit transactions, the Credit Ombud also plays an important role in assisting consumers, through their free dispute resolution services, by investigating matters pertaining to consumers’ credit profiles at the credit bureaus.   “Our office has been instrumental in resolving credit information complaints since 2004 and with our wealth of knowledge and expertise in the field, we continue that important work today,” says Lala Mohan.

One example of a case where the Credit Ombud assisted a consumer with his credit bureau dispute is the matter of *Mr Nkosi. His name was incorrectly listed on all the credit bureaus for a judgment. He requested our office to intervene after he was unsuccessful to persuade the bureaus that the judgment was not against his name. He explained that it is evident from the Court order that the Plaintiff in the case only obtained default judgement against the First and Second Defendant.  Mr Nkosi was the Third Defendant/Respondent in this matter. Consequently there should not be a judgement against Mr Nkosi listed on the credit bureau. The Credit Ombud assisted the consumer by obtaining documents from the Court file and we were able to verify that the judgment was only granted against first and second defendant, as alleged by Mr Nkosi. His credit bureau records was corrected and updated to great relief.

In addition to the dispute resolution role, the Credit Ombud is mandated by its members and an independent Council to which it reports, to educate consumers about the role of the office on the one hand, but also about credit matters in general. Lala Mohan explains: “We found that consumers have a desperate need for more information and education on how to manage their own finances. This encompasses the role of the credit bureaus and the different financial products and simplified information regarding their legal rights and obligations flowing from a financial agreement such as an ordinary loan agreement.”

“We approach consumers’ credit problems in a holistic manner so that it  does not only end with resolving consumer disputes,  but a  very  important part is also to empower consumers so that they don’t end up in the same position again,” says Lala Mohan. “Rehabilitation is key, especially now as consumers face tough times ahead with hikes on essentials such as food and electricity as well as interest rates. We need to ensure that we give consumers tools to be able to deal with their finances and work towards good credit records and maintaining them in the long run,” adds Lala Mohan.

The Credit Ombud urges consumers to take note of some of the following important credit rights they have as consumers:

  • Right to apply for credit – Every adult person has a right to apply to a credit provider for credit. Being granted the credit is however not an automatic right.
  • Protection against discrimination in respect of credit – A credit provider must not unfairly discriminate directly or indirectly against a person applying for credit.
  • Right to reasons for credit being refused – On request from a consumer, a credit provider must advise a consumer the reason for refusing to enter into a credit agreement; offering a lower credit limit; refusing to increase a credit limit; or refusing to renew an expiring credit card or credit facility. Too few consumers know about this right to make use if it when they are denied credit.
  • Right to information in an official language – A consumer has a right to receive any document that is required in terms of the National Credit Act (NCA) in an official language that the consumer reads or understands e.g. Consumers who are not fluent in English could exercise this right, but unfortunately they don’t know about it and therefore they do not request the translated documents in their chosen language.
  • Right to receive documents – Every document that is required to be delivered to a consumer in terms of the NCA must be delivered either in person at the business premises of the credit provider by ordinary mail; prepaid registered post; fax; email; or printable web-page.

Consumers can contact the office of the Credit Ombud via email on [email protected] or 0861 66 28 37 if they would like to get more information on arranging free consumer education workshops or should they require any  assistance in dealing with disputes with credit grantors and credit bureaus. Consumers can also sms our office on 44786 and one of our consultants will you back.

* Names have been changed to protect the privacy of individuals.

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