The effect of the recent regulations that require the removal of adverse consumer credit information should not be overblown. The information to be removed (besides information relating to paid up judgments) is limited to adverse classifications and does not require the removal of statements of fact.
The adverse classification of consumer behaviour refers to subjective classifications such as “delinquent”, “slow paying” and “not contactable”. That does not mean registered credit bureaus cannot retain and provide objective factual information. There is nothing wrong with recording and publishing facts such as “no instalment paid for October, November and December 2013”. Or “payments for 2013 on the average 20 days’ late”. Or “consumer has left domicilium address and not provided a new address”.
In relation to adverse classification of enforcement action, these again must be adverse comments rather than factual statements. A statement “handed over for collection or recovery” or “legal action” is a classification. On the other hand, “summons issued in magistrate’s court Johannesburg on 27 September 2013 under case number XXXX/2013” is a statement of fact.
The effect of the recent regulations that require the removal of adverse consumer credit information should not be overblown.
Section 70(1) of the National Credit Act sets out clearly what factual consumer credit information a credit bureau is entitled to keep. The minister can by regulation prescribe standards for reporting consumer credit information by credit bureaus “in addition to or in furtherance of” the requirements set out in section 70(1) (see section 70(4)).
The minister cannot change the act, however, and what can be done under section 70(1) can still be done. Regulation 17 previously permitted retention of adverse classifications for a maximum period of one year. These adverse classifications are no longer permitted. But keeping section 70(1) information remains as lawful as ever.
The only other difference is the fact that once a judgment is paid up all information relating to that debt must be removed.