What to do when blacklisted
What to Do When Blacklisted: Understanding Your Rights and Remedies
Being blacklisted can have a profound impact on your financial well-being and overall quality of life. In South Africa, blacklisting occurs when a credit provider lists you with a credit bureau due to non-payment of debts, affecting your ability to obtain credit in the future. Understanding what to do when blacklisted is crucial to reclaiming your financial freedom and ensuring that your rights are protected under South African law.
Understanding Blacklisting in South Africa
Blacklisting, also known as adverse credit listing, is a record of your credit history that indicates you have defaulted on payments. Credit bureaus collect this information and provide it to potential credit providers. Knowing what to do when blacklisted involves understanding how the system works and the legal framework governing credit information.
Legal Implications of Being Blacklisted
The National Credit Act 34 of 2005 (NCA) regulates credit information and aims to promote responsible credit granting and use. Being blacklisted can limit your access to credit facilities, employment opportunities, and even renting property. It is essential to know your rights under the NCA and what to do when blacklisted to mitigate these implications.
Steps to Take When You Are Blacklisted
If you find yourself blacklisted, the first step is not to panic but to take proactive measures. Understanding what to do when blacklisted can help you navigate this challenging situation effectively. Start by obtaining a copy of your credit report from registered credit bureaus such as TransUnion, Experian, or Compuscan. This report will provide detailed information about your credit history and any negative listings.
How to Check If You Are Blacklisted
Regularly checking your credit report is a vital part of managing your financial health. Under the NCA, you are entitled to one free credit report per year from each credit bureau. Knowing what to do when blacklisted includes being vigilant about your credit status. Review your report carefully for any inaccuracies or outdated information that may affect your creditworthiness.
Disputing Incorrect Listings
In some cases, you may find incorrect or outdated information on your credit report. Understanding what to do when blacklisted involves knowing how to dispute such listings. You have the right to challenge any inaccurate information with the credit bureau. According to Section 72(1) of the NCA, the credit bureau must investigate and correct any errors within 20 business days.
Rehabilitation of Credit Record
Rehabilitating your credit record is a crucial step in overcoming blacklisting. This process may involve settling outstanding debts, entering into payment arrangements, or applying for debt review. Knowing what to do when blacklisted includes seeking advice from qualified professionals who can guide you through rehabilitation under the NCA and related regulations.
Preventing Future Blacklisting
Prevention is better than cure. Once you have addressed the immediate concerns of being blacklisted, it’s important to adopt practices that prevent future adverse listings. This includes managing your finances responsibly, making timely payments, and staying informed about your credit status. Understanding what to do when blacklisted helps you to not only resolve current issues but also to avoid recurrence.
Frequently Asked Questions about What to Do When Blacklisted
Can I be blacklisted without being informed?
Under the National Credit Act, credit providers are required to notify you before listing adverse information with a credit bureau. Failure to do so is a violation of Section 72(1)(c) of the NCA. If you were not informed, you can dispute the listing with the credit bureau.
How long does blacklisting last on my credit record?
Negative information can remain on your credit record for varying periods. According to Regulation 17 of the NCA Regulations, adverse classifications of consumer behavior can be retained for one year, while default information can be retained for two years. Understanding what to do when blacklisted includes knowing these time frames.
Can I remove blacklisting by paying off my debts?
Paying off your debts is a significant step toward rehabilitating your credit. Once settled, the credit provider must update your status with the credit bureau within seven days, as per Section 71 of the NCA. However, the record of the default may still remain for the prescribed retention period.
What is debt review, and how can it help me?
Debt review is a process introduced by the NCA to assist over-indebted consumers. It involves a debt counsellor assessing your financial situation and negotiating with credit providers for reduced payments. Understanding what to do when blacklisted includes considering debt review as an option for managing and settling debts.
Can employers see if I am blacklisted?
Certain employers may request credit checks, especially for positions that involve financial responsibility. Under the NCA and the Employment Equity Act 55 of 1998, they must obtain your consent. Being aware of what to do when blacklisted can help you prepare for such situations.
How do I dispute an incorrect listing?
You can dispute incorrect information by contacting the credit bureau and providing evidence of the error. The bureau is obligated to investigate and resolve the dispute within 20 business days, according to Section 72(3) of the NCA.
Is it legal for multiple credit bureaus to list me?
Yes, multiple credit bureaus can have records of your credit information. It’s important to check all major bureaus when understanding what to do when blacklisted to ensure that all records are accurate.
Can I get credit while blacklisted?
Obtaining credit while blacklisted is challenging but not impossible. Some credit providers offer loans to blacklisted individuals, often at higher interest rates. Exercise caution and consider whether additional debt aligns with your goal of financial rehabilitation.
How does sequestration affect blacklisting?
Sequestration is a legal process where your estate is surrendered to pay off debts. It results in insolvency and can impact your credit record for up to ten years. Understanding what to do when blacklisted includes considering the long-term implications of sequestration.
Where can I get help with blacklisting issues?
Consulting with legal professionals or debt counsellors can provide personalized guidance. Organizations like the National Credit Regulator offer resources and support. Knowing what to do when blacklisted often requires professional assistance to navigate complex legal and financial matters.
References
National Credit Act 34 of 2005 (NCA)
The NCA is the primary legislation governing credit information in South Africa. It aims to promote fair and responsible credit practices. Sections 71 and 72 detail the rights of consumers regarding credit information and the procedures for disputing inaccuracies.
National Credit Regulations
The regulations provide guidelines on the retention periods of credit information. Regulation 17 specifies how long adverse information can be held by credit bureaus, which is crucial for understanding the duration of blacklisting.
Employment Equity Act 55 of 1998
This act regulates fair employment practices, including the conditions under which employers can perform credit checks on potential employees. It ensures that credit information is used appropriately and with consent.
Section 72(1)(c) of the NCA
This section mandates that credit providers must notify consumers before submitting adverse information to credit bureaus. It protects consumers from being unfairly listed without their knowledge.
Section 71 of the NCA
This section outlines the obligations of credit providers to update credit bureaus once debts are settled. It ensures that consumers’ credit records reflect their current financial status accurately.
Regulation 17 of the NCA Regulations
Regulation 17 specifies the retention periods for different types of credit information, which is essential for consumers to understand how long blacklisting can affect them.
Useful Links
National Credit Regulator (NCR) – www.ncr.org.za
The NCR is responsible for regulating the South African credit industry. Their website provides valuable resources on consumer rights, debt counselling, and how to handle credit disputes. It’s an essential tool for anyone wanting to understand what to do when blacklisted.
Credit Bureau Association (CBA) – www.cba.co.za
The CBA represents registered credit bureaus in South Africa. Their site offers information on how credit reporting works, consumer rights, and steps to dispute incorrect listings, aiding in understanding what to do when blacklisted.
Department of Trade, Industry and Competition – www.thedtic.gov.za
This government department oversees the NCA and provides policy information, updates on legislation, and consumer education materials. It’s a useful resource for staying informed about legal changes affecting credit and blacklisting.
If you would like to know more about debt collection click here.
If you feel that debt collectors have acted inappropriately click here.
If you would like to know more about bankruptcy and its legal effect click here.
If you would like to know more about business rescue and liquidation click here.
If you have concerns about deductions from your remuneration click here.
If you would like to know more about your rights under the national credit act click here.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for errors, omissions, loss, or damage arising from reliance upon any information herein. Don’t hesitate to contact Meyer and Partners Attorneys Incorporated if you require further information or specific and detailed advice. Errors and omissions excepted (E&OE).
