According to the executive manager of the Credit Bureau Association (CBA) Jeannine Viljoen, there is no such thing as a blacklist.
This means that companies that advertise that they can remove your name from a "blacklist" are unable to do so, and are rather providing consumers with high-interest loans to help pay their debt, which results in more debt.
She said: "There are a number of companies that claim to be able to clear a consumer's credit report or remove their name from a "blacklist". This is, however, false advertising and is intended to mislead consumers. These services are also often advertised at exorbitant costs."
When people say that they are blacklisted, in reality it means that they have a bad credit profile with the credit bureau.
All consumers who have credit, whether it be a clothing account, a credit card or a loan, have a profile with the credit bureau, which contains all the information on how you manage your credit, both good and bad. If you have a bad credit profile, no company is able to change this. The only way to improve your credit profile is to pay off your debt.
Viljoen explains that it is not possible for a company to remove or alter your credit report. "The information that is displayed on your profile is linked to your payment behaviour and how well you manage your obligations. A third party cannot alter this information. The company that you have an account or a loan with supplies information on how well you pay your accounts to the credit bureau."
Protecting the consumer
Claire Cobbledick, head of marketing at Gumtree South Africa reveals that the company has been working with the CBA to tackle the problem of misleading advertisements that claim to remove consumers from blacklists, or offer to provide them with credit.
She said: "Safety is of paramount importance. We took immediate action to block keywords and advertisements pertaining to blacklisting and encourage our community to report any ads that make such claims immediately. We are committed to working with organisations such as the Credit Bureau Association to ensure that we are protecting our customers and keeping their best interests in mind."
The National Credit Act
The National Credit Act looks at "credit in the form of a loan, lease, instalment sale, credit card or obtaining goods or services on credit from a credit provider." The aim of the Act is to simplify and standardise how credit providers have to provide information on credit agreements to customers.
The Act requires a credit provider to ensure that a person can afford the credit that they have applied for. If you are not able to afford the credit, but the provider enters into an agreement with you this is regarded as reckless lending. However, only a court can pronounce an agreement as reckless.
Viljoen explains: "Companies who advertise that you will qualify for credit despite having a negative credit bureau report are most probably granting those loans recklessly and if you are already over-indebted or in arrears with some of your loans, you are just worsening your financial position. The National Credit Act prescribes that all credit providers must do a proper affordability assessment (which includes an analysis of your income and your expenditure as well as all your other financial obligations) before they can grant credit. If they are not doing this, they are not acting in your best interest."
The National Credit Regulator (NCR) is responsible for the regulation of the credit industry in South Africa. It is responsible for the registration of credit providers, credit bureaus and debt counsellors, as well as enforcing compliance with the National Credit Act.
Tips: Consumer credit report
A consumer credit report contains all the information that a credit provider needs to know on your credit history, financial history and personal information.
Credit history: This includes any signed credit agreements, your repayment history and if you are or were under debt review.
Financial history: This includes your past and current income and your assets and liabilities.
Personal information: A variety of other personal information needs to be included in the credit report. This includes your education, employment and career history, you ID number, your name, date of birth, physical address, marital status and contact details.
Information that should not be included in your credit report includes: your race or political connections, medical status or history, your religion, thought, belief or opinions, your sexual orientation or membership to a trade union.
If your credit report shows that you are in bad financial standing with your credit provider, it is important to understand where the problem lies, and to contact the credit provider to make arrangements for payment.
In 2014 the South African government implemented a credit information amnesty which required creditors to remove consumers' credit records. However, consumers are still responsible for paying off this debt. In astatement last year, Chantel Cronje, legal advisor at Legal & Tax said: "The debt must still be settled if you are to keep your credit record clean in the future."
Having a clean credit record means that consumers can apply for more credit. However, this will only worsen your financial situation if you have bad credit. Rather practice caution and avoid entering into any further credit agreements.
For information on your credit report contact the CBA 011 463 8218 or visit www.cba.co.za