{"id":25104,"date":"2013-11-06T15:59:57","date_gmt":"2013-11-06T13:59:57","guid":{"rendered":"http:\/\/www.myza.co.za\/2013\/11\/support-for-proposal-to-clear-bad-credit-info\/"},"modified":"2013-11-06T15:59:57","modified_gmt":"2013-11-06T13:59:57","slug":"support-for-proposal-to-clear-bad-credit-info","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/support-for-proposal-to-clear-bad-credit-info\/","title":{"rendered":"Support for proposal to clear bad credit info"},"content":{"rendered":"

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The Department of Trade and Industry (dti) has received 98 written comments, most of which support the Removal of Adverse Credit Information, Trade and Industry Minister Dr Rob Davies said on Tuesday.<\/p>\n

Briefing reporters ahead of his meeting with the National Council of Provinces (NCOP) later today, Davies said the department had received 98 comments on the adverse credit information proposal.<\/p>\n

The department had published in the Government Gazette a notice requesting public comments on the proposal. The due date for comments was at the end October.<\/p>\n

Through this, consumers who had been blacklisted by the credit bureaus \u2013 but had since settled their debt \u2013 would have their names removed from the credit bureau listings.<\/p>\n

\u201cWhat we are saying is that this exercise would remove that information, and would provide \u2013 particularly through the amendments that would come through the Credit Act \u2013 for an on-going removal once you pay up,\u201d said Davies.<\/p>\n

Of the 98 comments, 66 supported the proposal, 15 had concerns and didn\u2019t support it, while 17 raised questions of clarity.<\/p>\n

The dti had also thus far conducted public consultative sessions in six provinces, with the remaining sessions to be held in the outstanding provinces within the next two weeks.<\/p>\n

\u201cWe are working to ensure that there is a greater onus to conduct a real affordability assessment and at the same time, we will engage in much more credit information campaigns to discourage people from being over indebted,\u201d said Davies.<\/p>\n

It had been observed that real affordability assessments were not being conducted properly by credit providers in granting credit.<\/p>\n

\u201cWhat we\u2019ve actually found is that instead of active affordability assessments being conducted by credit providers, we find that all that really is relied on is whether or not somebody\u2019s name is on a credit bureau, and your name can be on a credit bureau for years \u2013 even if you\u2019ve paid off the entire debt.\u201d<\/p>\n

The removal of adverse credit information will benefit close to two million consumers.<\/p>\n

Davies said this was seen as one way of solving the consumers\u2019 problems, as being blacklisted often dampened job prospects, among other things.<\/p>\n

\u201cSecondly, it will be linked to stronger measures to try to get much more responsible behaviour by credit providers through conducting actual affordability assessments of a more rigorous kind. That is what we are trying to do,\u201d he added.<\/p>\n

The minister also pointed out that when the National Credit Regulator visited the Marikana community, following the tragic events of August 2012, it was found that of the 13 credit providers operating in that community, 11 were not complaint with one or other aspect of the Credit Act.<\/p>\n

Davies said it was easy to get garnishee orders (an automatic deduction from somebody\u2019s salary before they get the salary), which some times take a sizeable chunk of a person\u2019s wages.<\/p>\n

He said the obtainability of\u00a0 garnishee orders needed to be tightened, while credit providers must assess whether a person can afford credit or not.<\/p>\n

\u201cThat assessment needs to be more robust than it has been up to now. We need to change behaviour if we do this removal of adverse credit information exercise.<\/p>\n

\u201cWe will complement this with more robust requirements, in terms of affordability assessment; we also need to educate people about credit. What we have at the moment is an easy way of making credit available to people who can\u2019t afford it.\u201d<\/p>\n

The removal of adverse credit information had previously been referred to as credit information amnesty.<\/p>\n

\u201cCredit amnesty doesn\u2019t mean that the debt is cancelled. That was one of the possible ambiguities that it would imply if you owe somebody some money, that debt is cancelled. That isn\u2019t the case [here]; it\u2019s the removal of the information off the credit bureau. That is what will be removed,\u201d stressed Davies. \u2013 SAnews.gov.za<\/p>\n