Explanation of Section 73 of National Credit Act

Section 73 of the National Credit Act makes provision for certain information to be removed from the credit bureaux by 01 June 2007.

Adverse credit information, listed on the credit bureaux by 01 September 2006, in respect of debt of less than R500 will be removed from the credit bureaux. This means that all negative listings in respect of smaller debt will be automatically removed and consumers do not have to apply or contact a credit bureau for the removal of this information.

Accounts which was dormant for longer than 24 months by 01 September 2006, unless any enforcement action has been taken by the credit grantor. - This means that if a consumer has not paid an outstanding debt for a period of 24 months by 01 September 2006, and the credit grantor has not handed the account over to attorneys for collection or to take a judgment, then all the information relating to this account will be removed by 01 June 2007.

Judgment Information which credit bureaux receive from the courts will be removed from the credit bureaux in the following circumstances.

All judgment information in respect of a debt of up to R500 which was listed on the credit bureaux by 01 September 2006 – unless the consumer has more than two unpaid judgments on his/her credit record. This means that the judgment information will be removed from the credit bureau under the said amount, and it is not a pre-requisite that the debt must have been paid.

In respect of a debt of up to R5000, if the judgment is older than 18 months by 01 September 2006 – unless the consumer has more than two unpaid judgments on his/her credit record. - Again there is no pre-requisite for the debt to be paid in full for the information to be removed from the credit bureaux, the information should have been older than 18 months by 01 September 2006 and it will automatically be removed from the credit bureaux without application by the consumer.

It is very important for consumers to understand that only the judgment information of above mentioned categories will be removed from the credit bureaux and that consumers still have an obligation to repay the outstanding debt to the credit grantor as the credit grantor can still exercise his rights for example to repossess furniture or to garnish the consumer’s salary

In respect of a debt of up to R50 000, if the full amount was paid in full by the 1st September 2006.

In respect of a debt of up to R50 000 reflecting on the Consumer’s credit record on 1st September 2006, if the full amount is paid by the Consumer between 1st September 2006 and 1st September 2007.

This is a big concession for consumers as it means that any judgment under

R50 000 which has been paid and will be paid until 01 September 2007, will not be displayed on the credit bureaux for a period of 5 years, but will be removed immediately from the credit bureaux. Consumers must see this as an opportunity to pay the outstanding debt in terms of the judgment to get this information removed from the credit bureaux.

This will save consumers the trouble and money to get the judgement rescinded or abandoned in a court of law to get the information removed from the credit bureaux.

Consumers simply have to prove that they paid the outstanding debt; the credit bureaux will verify this information and then remove the judgment information. It must be kept in mind that consumers must contact the credit bureaux with proof of payment to get this information removed.

Consumers must further keep in mind that if the judgment is not paid in full that credit grantors have the right to garnish your salary or repossess goods, and that the judgment information will be kept on the credit bureaux for a period of five years, whether you paid the judgment or not.

This is a unique opportunity to ensure that you can clear your name by simply pay the outstanding judgment.”

The Ombud also stressed that is very important for Consumers to check their credit record at the credit bureaux regularly. This will also enable Consumers to share in the benefits of this data cleansing exercise. When a consumer checks his/her credit record regularly it is easy to identify information which has been listed incorrectly and unfairly which might prevent the Consumer from sharing in the benefits intended by the Act on the 1st June 2007.

If a consumer finds that there is information on his/her credit record which they want to dispute, they can enlist the FREE OF CHARGE services of the Credit Information Ombud. His office can be contacted on 086 166 2837 or Ombud@creditombud.org.za. Consumers can also get useful general information and links on the Credit Information Industry by logging on to www.creditombud.org.za

The Act

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