National Credit Regulator wins high court case

The National Credit Regulator (NCR) is typically vigilant when it comes to ensuring that credit bureaux, debt counsellors, credit providers and so on comply with the National Credit Act (NCA). To this end, the NCR has focused on the South African Fraud Prevention Services (SAFPS) with a view to regulating them if they are, indeed, operating as a credit bureau.

The SAFPS took a compliance notice issued by the NCR instructing SAFPS to register with the NCR to the National Consumer Tribunal. The Tribunal found in the SAFPS’s favour by rejecting the assertion that the SAFPS is operating as a credit bureau. The NCR disagreed and took the matter on review to the Pretoria High Court, which has now ruled that the SAFPS needs to register as a credit bureau within 21 days or cease to receive and submit reports.

What does the SAFPS do? The Section 21 company is a not-for-profit s association that focuses on preventing financial crime. It is funded by its members’ annual subscription fees, many of whom belong to the financial services industry, which includes credit providers. The SAFPS has a fraud prevention database that allows members to file information relating to possible fraud.

Because the SAFPS has been found to have contravened the provisions of section 43 of the NCA, which stipulates that anyone paying for credit reports should register as a credit bureau, the NCR believes it should register as a credit bureau so it can be regulated as one. The SAFPS has, however, argued that is not operating as a credit bureau.

“We are not saying the SAFPS is not a good organisation; not at all,” argues Jan Augustyn, manager investigations and enforcement at the NCR. “They may in fact be doing very good work. But in order to protect the consumer we have to look at things like registration, regulation, recourse for consumers and so on.”


Carol McLoughlin, executive director of the SAFPS, says the company is considering taking the matter on appeal.

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