Let’s say you pay your monthly loan instalment at your local bank branch. But the payment, which went through on your side, didn't show up on your creditor’s side and they start sending collectors to pursue you.
They may also report you to the credit bureaus and your credit score can be negatively impacted. But since this was the fault of your creditor, how will the situation be rectified? We find out.
Tip: Make sure you regularly check your credit score so that you can flag mistakes.
Who should correct the mistake?
According to Shikar Singh, head of collections at FNB Loans, it’s the creditors responsibility to remove the adverse listing with the credit bureaus if the payment did not reflect on the creditor’s side but the customer can prove that it successfully went through.
“The credit bureaus must remove the adverse listing within seven days after receipt of such information from the credit provider,” says Singh.
“Keep in mind that the credit provider wouldn’t be aware of the payment made due to the fact that, in the example above, the payment did not reflect on the credit provider’s side,” he adds.
Singh says that this stresses the importance of reviewing statements so that the credit provider can be notified as soon as any payments that do not reflect are noticed.
In our recent survey, we found that just under 65% of readers regularly reviewed their bank statements. This means that nearly 35% of readers may miss debit order errors or payments that didn’t really go through. Make sure you’re doing your part by reviewing your statements regularly.
According to Gavin O'Mahony, deputy CEO at Bayport Financial Services South Africa, mistakes can happen. He agrees consumers should regularly check their credit report.
“This will ensure your credit history and payment profiles are correctly reflected. If you don’t correct it, the error could negatively impact your ability to apply for credit in future,” says O’Mahony.
Like Singh, he suggests that, prior to raising a dispute with the credit bureaus, you should contact the lenders directly and request that they send the updated, corrected information to the credit bureau. This is usually the best – and quickest – way to get information updated.
“If you'd still like to raise a dispute directly with the credit bureau due to the lender not correcting this issue, it’s important to provide as much supporting documentation as possible to prove that the disputed information on your credit report should be removed,” says O’Mahony.
What about debt collectors’ fees?
Singh points out that not all credit providers, debt collectors, or attorneys charge collection fees. However, if they do and you were not in arrears, you may contact them, by email or call, to ask for a reversal of the collection costs.
“It’s your right as a consumer to question and challenge any collection costs that you feel were unjustly charged,” says Singh.
O’Mahony adds that one of the biggest mistakes consumers make is waiting until the last moment before starting the communication process with lenders.
“Should there be an error, the lender should reverse the debt collectors’ fee. You should not pay more than is contractually required,” says O’Mahony.
What if you’re dissatisfied?
O’Mahony says that if you’re unhappy with the response from a lender or bureau, or you don’t receive a response to your complaint within twenty working days, you can approach the Credit Ombud.
“The Credit Ombud exists to resolve disputes arising within the credit industry between members of the association and consumers or businesses, effectively and fairly,” says O’Mahony.
He recommends that if you still don’t receive a satisfactory outcome to your complaint, you can then escalate it to the National Credit Regulator.
Tip: Always keep track of your credit score so that you can correct errors as soon as possible.