Credit complaints: Who you gonna call?
The Credit Ombud’s jurisdiction has been extended to enable the office to investigate complaints relating to non-bank credit transactions. Until now the previously named Credit Information Ombud only oversaw issues related to information lodged with credit bureaus. Credit relating to banks will still fall under the Banking Ombud.
The new ombudsman can expect to have his hands full now that he will be dealing with credit provided by retail stores.
As many debt counsellors will tell you, it is often the retailers that are the worst transgressors of the National Credit Act, so there was a significant need for an ombud in this area.
Until now this role fell on the National Credit Regulator (NCR), but as a regulator it is more concerned with systemic problems rather than individual complaints.
What this means for consumers is that you can contact the Credit Ombud if you have any problems with a credit agreement over issues like interest rates, payment periods, repossessions and negative listings at credit bureaus, for example.
According to Credit Ombudsman Manie van Schalkwyk, the only three issues that would be referred to the NCR are reckless lending claims, debt-counselling complaints and complaints relating to pawn shops.
However, if you are unsure of who to call, your first port of call should be the Credit Ombud, who would refer the complaint to the NCR if necessary.
The most common complaints
According to the Credit Information Ombud annual report for 2009, one of the most common complaints is that negative information listed on a consumer’s credit profile at a credit bureau is displayed longer than prescribed by the National Credit Act.
Most of these complaints involve listings of rescinded judgements and rehabilitated administration orders. However, the majority of rescission orders (court orders to remove the negative judgement) are fraudulent.
Therefore credit bureaus have to conduct extensive research to validate the court rescission orders, which means that credit bureaus are often unable to resolve these complaints within the NCA specified 20-working-day period and consumers escalate the matter to the ombud to resolve.
The report also showed that there was a significant increase in the number of cases where information was not updated by the credit providers. In a significant number of cases, the payment history of a consumer will display that the consumer is still in arrears when this is in fact not the case. Credit providers should update the credit bureaus with the most recent information within 60 days.
Since the Credit Ombud started operating under the new jurisdiction, it has received complaints revolving around the issue of incorrect statements of account and payments that were not reflected on consumers’ accounts.
The Credit Ombud’s office was also successful in returning a consumer’s vehicle to him in a matter where the credit provider did not follow correct procedure. Had the vehicle been sold at the auction, the consumer could have lost almost R300 000. In this case he was able to sell the car himself and settle the outstanding amount.
In another matter, the consumer was being charged interest despite the fact that there was no agreement to charge the interest, and the full amount was reversed.
The ombud was also approached by many complainants who have at some point defaulted on a credit transaction and are paying the debt off by way of deductions from their salaries.
In some of the cases the consumers have over-paid, and in all of the cases they are unable to obtain a clear answer as to how much they still owe and how these amounts are calculated.