A total of 2’848 disputes were closed in the Credit Information Department in 2012, with the jurisdiction of Insufficient/Incomplete Credit Information being one of the biggest reasons for disputes. This category of disputes accounted for 32% of disputes.
Many consumers lodge disputes that relate to prescription and, in some cases, we remove information from a credit bureau based on the fact that the debt has prescribed. We would like to take the opportunity to explain the difference between the legal process of prescription and the Credit Ombud’s Terms of Reference in respect of listing of prescribed debt.
The legal process of prescription determines that a debt shall be extinguished by prescription after the lapse of the relevant period in terms of our law:
- For an ordinary debt the period is 3 years
- For a judgement this period is 30 years
- Any debt secured by mortgage bond the period is also 30 years
Prescription starts running from the day that debt becomes due and payable.
The credit provider may proceed with legal action and apply for judgement against a debtor, based on a prescribed debt. It is the duty of the debtor to raise a defence of prescription and the claim may be dismissed if the court is satisfied that the debt has indeed prescribed. In addition, the credit provider may be ordered by the court to pay for the debtor’s legal costs if not successful with the claim.
However, according to the Credit Ombud’s Terms of Reference, subscribers of credit bureaus may not submit information in respect of a debt that has prescribed. Prescription of debt is defined in our Terms of Reference as follows: ‘In the event that a debtor has not acknowledged a debt for a period longer than 36 months, the said debt would have prescribed and a subscriber of the credit bureaus will not be allowed to list the information at the credit bureaus.’ In other words, the consumer is not required to first raise this as a defence in court. The service/credit providers are bound by the provisions of the Terms of Reference not to submit such information to credit bureau.