The media has recently reported extensively about the so-called ‘credit amnesty’, with the common thread suggesting that ‘adverse information’ is about to be expunged from people’s credit records.
This has created confusion even among legal professionals over whether this then includes all ‘adverse information’ on a credit record. If this were the case, the ‘amnesty’ would not distinguish between the different categories of consumer credit information provided for by the National Credit Act 34 of 2005.
The fact is the ‘amnesty’ only affects 3 of the 12 categories of consumer credit information:
Section 13 of The National Credit Amendment Bill provides for the “automatic removal of adverse consumer credit information” in a proposed amendment to section 71 of the National Credit Act 34 of 2005. This amendment is to be included in the Act through insertion of Section 71A to the National Credit Act. The amendment proposes the removal of the following consumer credit information:
An adverse classification of consumer behaviour;
An adverse classification of enforcement action against a consumer;
Payment profile information, that is, the information listed in the consumer credit profile.
Regulation 17 of the National Credit Act defines each of the above categories of consumer credit information by providing a “description” of each category.
An adverse classification of consumer behaviour is described as “subjective classifications of consumer behaviour”;
An adverse classification of enforcement action against a consumer relates to “enforcement action by the credit provider”;
Payment profile is “factual information pertaining to the payment of the consumer.”
Conditions to be met for the “automatic removal of adverse consumer credit information”.
The debt must be paid up;
The credit provider must submit details of settlement to the credit bureaux within 7 days of settlement;
The credit bureaux must remove the information within 7 days after receipt of the credit provider’s notification;
Where a credit provider does not notify the credit bureaux of settlement within 7 days, the consumer can file a complaint against the credit provider with the National Credit Regulator.
Thus, the other 9 categories remain unaffected. These are Disupte Information; Enquiries; Debt Restructuring; Civil Court Judgments; Administration Orders; Sequestrations; Rehabilitation Orders; Other Information. These will remainon one’s credit record for the mandatory period as provided for in Regulation 17 of the National Credit Act.