Thandaza Zulu* was in a good credit and financial state, confident that she ticked all the right boxes to qualify for the home loan she was applying for to realise her dream of owning a home of her own. She was unfortunately declined for the loan based on the fact that she had ‘too many’ accounts and in addition, she posed a high risk as some of them were allegedly not up to date. As far as she was aware, she only had six accounts which were all in good standing.
‘What Thandaza had been a victim of is known as a mismatched profile,’ says Credit Ombud Nicky Lala Mohan. ‘This often happens when either an ID number is captured incorrectly when applying for credit or in instances where the ID number of the person applying for credit turns out to have several possible ID matches on the credit providers’ systems,’ explains Lala Mohan.
In some instances, this mismatch can happen as a result of people sharing the same ID number because of an error on the Department of Home Affairs’ system.
The President recently announced in his State of the Nation Address that South African’s would soon be able to apply at their local bank for their smart identification cards. This exercise will surely go a long way in cleaning up Home Affairs’ database and assist consumers who might have a problem of ‘sharing’ an ID number with someone else.
In Thandaza’s case, she was mismatched with about seven different people who were originally from Swaziland. This dramatically increased the number of accounts on her credit profile from six to 18 accounts. ‘Thandaza’s case presented what initially looked like fraud, but turned out to be a mismatched profile when further investigated. It emerged that the people whose accounts were appearing on her profile indeed opened legitimate accounts at store branches which trade in Swaziland, but are originally South African based credit providers,’ says Lala Mohan.
The unfortunate instance of mismatched profiles such as was the case with Thandaza, happens as a result of ID number sequencing. South African ID numbers use dates of birth as the first six digits, followed by what is known as a sequence number, which is made up by the four digits which follow the numbers which capture an individual’s date of birth. ‘In this consumer’s case, although her name and surname were not the same as those of the seven people she had a possible match with, she shared an identical date of birth and sequence number which they had in their Swaziland identity documents,’ continues Lala Mohan.
The office of the Credit Ombud successfully assisted Thandaza to correct her profile and remove the accounts which did not belong to her. An important lesson from this case is that consumers need to be aware of what information is on their profiles and are advised to do the following:
· Check your profile regularly and be familiar with how many accounts and with whom you have them so that you are able to pick up any discrepancies in the number of accounts reflecting on your profile
· If you find any accounts that you are not familiar with, lodge a dispute with the concerned credit bureau
· Ensure that you choose the correct option when applying for credit when asked about your marital status – being married in community of property or with an ante-nuptial has an effect on listings where married individuals’ profiles are concerned
· Be aware when stores close down or get bought out by another credit provider as the original name of the store may change to the one of the ‘new’ credit provider on your credit profile list of accounts
Other forms of credit profile discrepancies happen as a result of your personal details being duplicated, although this is normally rare. If a credit bureau picks up this duplication, they generally would try and assist the consumer to rectifying the error.
‘It is vital that South African consumers get into the habit of checking their credit profiles as it can have negative effects on their credit transacting or even their ability to secure a job or promotion when they find themselves in a situation such as the one Thandaza found herself in,’ warns Lala Mohan. ‘Even worse, in some cases people are pursued for debt collection as a result of these mismatched accounts,’ he adds.
According to statistics from the National Credit Regulator (NCR), only 173 194 credit reports were issued in the last quarter. This, when compared to the fact that there are 22.5 million consumers who are credit active in the country, is a drop in the ocean.
Consumers can contact the office of the Credit Ombud for free assistance when they have been listed on a credit bureau incorrectly or unfairly, have been garnished incorrectly or unfairly or have any problems relating to their credit agreements from clothing and furniture retailers. The office can be contacted on 0861 66 28 37; or at [email protected] or visit their website at www.creditombud.org.za for further information.