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Tuesday Apr 22, 2014

You must be given 20 days' notice before blacklisting

Before a credit or service provider can report any negative information about you to a credit bureau, it must give you 20 days' notice that it intends to list 'default' information on your credit report. Once this default information is listed, you're commonly referred to as having been 'blacklisted'.

You have the right to be notified so that you have an opportunity to resolve the dispute with your credit and/or service providers and ensure the integrity or accuracy of the information on your credit report. Protecting your credit report is important, because it is used to determine whether or not credit will be extended to you.

The National Credit Act (NCA) states that it is your right to be notified by a credit or service provider that it intends reporting negative information about you to a credit bureau. This right applies when the credit provider:

Classifies you as delinquent, slow-paying, absconded or not contactable; and

Intends to take 'enforcement action' against you - for example, when a debt is handed over for collection or recovery, or is written off, or when you are taken to court.

Before a credit provider can take legal action against you, it must send you a section 129 notice, which informs you that you are in default and that you have the right to refer the credit agreement to a debt counsellor, an alternate dispute resolution agent, the Credit Ombud or a consumer court in an attempt to resolve any dispute or agree to a plan to settle your debt.

This letter may also inform you that the credit provider intends noting on your credit report an adverse listing in respect of the debt, and that you have 20 days to bring your account up to date or to settle the debt to avoid the adverse listing.

But not all section 129 letters warn you of an adverse listing. The provider can also notify you by phone or SMS.

According to the latest Credit Bureau Monitor, in the quarter to the end of December last year, consumers lodged some 20 000 disputes with credit bureaus about the accuracy of the information on their credit reports. This was a year-on-year increase of 20 percent. In the same quarter, disputes over the accuracy of information held by credit bureaus resulted in more consumers' credit reports being altered (16 643) than remaining unchanged (3 391).

Credit bureaus hold information on 20.64 million credit-active consumers, of whom 9.93 million have 'impaired' reports. An impaired report means that it records an adverse listing and/or debt judgment and/or administration order and/or that you are three or more payments or months in arrears.

Information may stay on your credit report for a certain period, depending on how it is categorised. Until April 1 this year, when the credit information amnesty came into force, a default judgment could be recorded on your report for five years, even if you had settled the debt. The only way to expunge this information from your record was to have a court rescind the judgment, at your expense.

But from June 1, a bureau must remove a record of a judgment from your report within seven days of it receiving proof that you have settled the debt.

The NCA also entitles you to a free credit report once a year from each of the 13 credit bureaus registered with the National Credit Regulator (NCR). You can find the contact details of these bureaus on the NCR's website, registrants/cb.php

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