Manie van Schalkwyk Ombudsman

Transcription

1 Manie van Schalkwyk Ombudsman

2 Agenda Mission statement and Who We Are Council Background of Credit Ombud Terms of Reference and Jurisdiction Case Examples Process

3 Mission Statement The Credit Ombud will: Effectively resolve disputes between members of the Credit Industry and credit receivers (consumers and businesses) with regards to credit, credit information and debt counselling matters. Act as an educator of the public in matters pertaining to the credit industry At all times the Ombud will act honestly, independently and fairly; balancing the rights of all parties

4 Who we are Credit Info Non Bank Credit Debt Counselling Credit Bureaux Non-bank Credit providers Banks Banks Retail Furniture Non-Bank Credit Providers Non bank Credit Providers Retail Clothing Debt Counsellors Subscribers to Credit Bureaux Everybody that list info on credit bureaux Micro-lending Non-Bank Vehicle Finance Non-Bank Property Finance Payment Distribution Agents

5 CO Council Consumer Bodies Woman's National Coalition - Laura Kganyago SA National Consumer Union - Lillibeth Moolman Black Sash - Thandiwe Zulu Independent Members Siva Naidoo Tjaart vd Walt Tefo Raditapole Thuli Zungu Patricia McCracken Hassen Lorgat Credit Constituency Banking Association - Nicky Lala-Mohan Consumer Goods Council - Patricia Pillay Credit Providers Association - Darrell Beghin National Clothing Retail Federation - Michael Lawrence Motor Vehicle Finance Association - Christo Otto Micro Finance South Africa - Hennie Ferreira Credit Bureau Association - Ramesh Pillay Debt Counselling Association of SA - Paul Slot

6 Background of the CO The Credit Ombud is a Ombud with Jurisdiction in terms of the Financial Services Ombud Schemes Act and received recognition from the FSOS Council in 2006 The Credit Ombud is a registered Public Benefit Organisation with SARS Operations started in March 2004 focusing on Credit Information January 2010 accepting complaints ito non-bank credit January 2011 accepting complaints ito Debt Counselling

7 Summary of Statistics 2012 Disputes received by Credit Bureaux: Value Saved Consumer R 2 Million Disputes Received ito Credit Bureaux: Disputes received NBC Average days to close 42,6 days Disputes received DC 501

8 Credit Bureaux Good or Bad?

9 Credit Process and Roles of Players Four Main Players: Credit Receivers Consumers Credit Grantors Lewis Stores, African Bank Credit Bureaux TransUnion, Experian Credit Ombud (CO)

10 Credit Process PUBLIC Credit Receivers Consumer Apply for credit by filling out an application form

11 Credit Process PUBLIC CREDIT GRANTOR Credit Grantor Credit Grantor processes application form Sends enquiry to Credit Bureau.

12 Credit Process PUBLIC CREDIT GRANTOR Credit Bureaux Receive information from Credit Grantor Match data to existing data: Provide Credit Report to Credit Grantor CREDIT BUREAU

13 Credit Process PUBLIC Credit Grantor CREDIT GRANTOR CREDIT BUREAU CREDIT GRANTOR Credit Grantor receives report from Credit Bureau Evaluates information in respect of Credit Grantor s policy. Decide on terms of business (ie Accept, decline, ask for deposit, etc)

14 Credit Process PUBLIC Report Terms of Business back to Consumer CREDIT GRANTOR CREDIT GRANTOR CREDIT BUREAU

15 Credit Process PUBLIC CREDIT GRANTOR Ensures rules are adhered to in the process CREDIT GRANTOR CREDIT BUREAU

16 How do you get on a credit bureau Account Information Payment Profile Information - Everybody with an account is on credit bureaux - Positive (80%) and negative information (20%) - Information stays for 5 years Default information -Consumer has regularly not paid according to contract - Before Judgment is taken - Information stays for maximum 2 years - If paid- Credit bureau must update

17 How do you get on a credit bureau Judgement Information - Court Process - Credit Grantor can garnish salary - Repossess Furniture - Information stays for 5 years - Rescission or Abandonment of Judgement Administration Order - Court Process - Administrator distribute money on behalf of consumer - Very expensive option - Costs - Information stays for 10 years or until rescission (court process)

18 How do you get on a credit bureau Debt Counseling - Debt Councilor - Distribution of Funds - NO credit until all debt has been paid - Information stays until clearance certificate is issued Sequestration - Court Process - You are seen as a minor and cannot contract - NO Credit - Information stays for 10 years or until rehabilitated (court process)

19 How do you get on a credit bureau Rehabilitation - Court Process - You are seen as a new person - Must have paid everybody - All info removed that lead to Sequestration - Information stays for 5 years Enquiries - Enquiries are logged when a credit grantor enquired on your name - Not negative - Information stays for 2 years

20 How do you get on a credit bureau All Other Information - Information stays for 2 years

21 How do you get OFF a credit bureau Speak to Credit Grantors Make alternative arrangements Do NOT use Credit clear companies After the retention periods the information will be deleted from the credit bureau automatically Use the Credit Ombud FREE OF CHARGE

22 Credit Bureaux Amnesty What effect does a credit bureaux amnesty have?

23 Jurisdiction Credit Info Inaccurate or incorrect default credit information; Insufficient or incomplete credit information; Out-dated credit information; The obligation of the Credit Grantor to: supply accurate credit information to the bureaux properly inform credit receivers prior to adversely listing them; Cases where a credit receiver defaults through no fault of his own and subsequently rehabilitates himself Listings in respect of prescribed debt. Duplicate/double listings in respect of the same debt Identity Fraud Service Disputes Costs and Damages

24 Jurisdiction NBC and DC The Credit Ombud shall only consider complaints that pertain to Non-bank credit transactions and Debt Counselling: Where the member breached the law or did not give effect to a right provided for by law; Where member breached an applicable Code of Conduct or practice; Not met standards of good practice; or Acted unfairly and/or unconscionable towards a complainant.

25 Examples of NBC Disputes Garnishee order was obtained against the consumer Original collection attorneys absconded No payments to credit provider New collection attorneys appointed - started deducting the initial Judgement amount via a reissued garnishee order Consumer approached CO - we established the paper trail Consumer was refunded R4 000 for overpayments made

26 Examples of NBC Disputes The consumer was garnished insisted that all is paid CP did not assist - obtained judgement for R21,593 Garnishee order for R900 per month Listing on the Credit Bureau Consumer contacted the CO Judgement was taken erroneously CP rescinded the judgment at their own cost, and confirmed no debt is owed.

27 Examples of NBC Disputes Consumer applied for consolidation of a loan Mortgage was registered against primary residence Consumers failed to pay - disputing terms of contract Judgement was taken CP proceeded with the auctioning property for outstanding R Value of the property -R Consumer contact CO CO negotiated stay the Sale in Execution and allow the consumers to resume with monthly payments.

28 Examples of DC disputes Consumer contact CO Sale in execution of property following week Debt review in December 2009 terminated in April allegedly default in payments CO stayed execution Consumer never defaulted Bank swiped account and did not receive payment from PDA, but received money from swiping Reinstated debt counselling

29 Examples of DC Disputes The consumer under debt review for eight months allegedly making regular payments CP terminated debt review and obtained Summary Judgment One of vehicles already attached - second vehicle's repossession imminent After our facilitation CP agreed to re-instate the debt review, subject to renegotiated payments being made despite Summary Judgement being granted.

30 Examples of DC Disputes Consumers applied for debt review Experienced problems with 1 st DC- registration was revoked by the Tribunal Approached 2 nd DC gave the run-around and application for debt review not heard for two years, due to negligence by the Debt Counsellor Bank proceeded with sale in execution of home 2 nd bank terminated debt review - judgement against car 3 rd bank advised that termination of debt review imminent

31 Examples of DC Disputes CO intervened - reported DC to NCR for investigation Stayed sale in execution of consumers' property Other two banks agreed not to terminate debt review Allowing consumers to approach 3 rd DC

32 Summary of DC Statistics Nobody at Fault 36% Debt Counselor 35% Consumer 20% PDA at fault 1% Credit Provider 8%

33 General Observations DC don t communicate that proposal was not accepted Counter proposals are not communicated to consumer Termination by CP after 60 days even if consumer is paying CP only settle for high amounts (80-90%) CP believe DC start at minimum amount and negotiate up Don t trust proposals Consumers receive summonses out of the blue do not have the means to defend in high court Little negotiation power DC don t explain pitfalls of Debt Counselling All think their problems are over What do we do when DC is at fault Consumer has lost house/car etc

34 MEMBER OF THE PUBLIC INITIATES CALL CO CALL CENTRE Credit Bureaux/ Credit Provider/NDMA/ DCASA /PDASA ALLOCATE REFERENCE NO. INVESTIGATE AND RESOLVE COMPLAINT WITHIN 20 W/DAYS REPORTS ON NON RESOLUTION Full investigation by CO Final Decision National Credit Regulator

35 Contact Numbers: CALL CENTRE: WEBSITE:

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