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Ombud urges consumers to be proactive

3 April 2009 No Comment

As part of complying with the National Credit Act, credit bureaux must compile and submit quarterly statistics reports to the National Credit Regulator (NCR).

The latest report released by the NCR includes figures for the period starting from June 2007 to September 2008. manie

By end September 2008 a record of 17, 53 million credit active consumers was recorded, showing an increase from 16.78 recorded in June 2007.

Of the recorded credit active consumers 59, 5 percent showed good credit record standing compared to the 63.6 percent recorded in June 2007.

This shows a total decrease of 4.1 percent in the 15 month period since the introduction of the National Credit Act (NCA) in June 2007.

“This percentage might not seem big and significant; however what it actually means is that almost a million more consumers have impaired credit records and could not stick to their payment obligations.

This is a big number and does not spell good news for the industry” says Manie van Schalkwyk, Credit Information Ombudsman. Van Schalkwyk points out some of the contributing factors to the increase in consumers with impaired credit records.

“The recent economic slowdown may have been a major contributing factor. The effects of the economic slowdown saw interest rates increasing constantly up to 5 percent between June 2006 and June 2008. This factor would mean that consumers have less disposable income which could result in consumers not paying credit accounts as per agreements, thus resulting in the increase on the impaired records. Fuel, food and everyday living expenses also kept increasing which put consumers under more stressful situation.”

“As an organization which deals with consumers who have been affected by negative information at the credit bureaux, my office has a vested interest in the report. The report might just give us an indication on where to focus our efforts in terms of consumer education as one of our objectives. As stakeholders in the credit industry we believe that consumer education should form the cornerstone in alleviating problems arising from credit transactions.” says van Schalkwyk.

Looking ahead he says we might see a further decline in consumers with credit records in good standing.

He point out that the industry would have to keep in mind that the markets crashed in September last year.

This definitely would result in a lower demand for our exports which will result in job losses and thus consumers with no ability to pay credit accounts.

Van Schalkwyk says we as consumers still need to survive despite the economy going to the quandary and here are some proactive tips he shares with us:

  1. Budget
  2. Notify credit providers of any possible
    difficult financial situations- i.e.
    retrenchment
  3. Make other practical payment
    arrangements
  4. Stick to the arrangement – do not default
    “Part of our jurisdiction is to assist
    consumers who default on accounts as a
    result of retrenchment and have
    followed the steps above.

If you have followed the steps above, have rehabilitated yourself by paying the debt, you can approach our office on how to get the information removed from your record” he concluded.

The Ombud’s services are FREE OF CHARGE. The office can be contacted on 0860 66 2837 or on email ombud@creditombud.org.za.

Consumers can also get general credit information on the website on www.creditombud.org.za.

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