COSATU supports proposal to remove adverse credit information from credit bureaux records
COSATU supports government's proposal to remove adverse credit information from credit bureaux records. This is in line with the 11th COSATU National Congress's call "for a once-off Presidential Black-listing remission of all South Africans blacklisted for up to a maximum of R200 000.00. Those who have been involved in criminal activities and corruption should be excluded from remission".
The government has proposed the following:
- Removal of all adverse information listings irrespective of value and irrespective of non-payment; i.e. all negative information that may affect credit scoring.
- Removal of all paid up adverse information listings on an ongoing basis;
- Removal of all paid up judgments on an ongoing basis. According to the dti this would benefit 1,605,763 consumers. If not paid off the judgement will remain.
COSATU supports government's efforts to lessen the burden of over-indebtedness on consumers whose credit records have been listed on credit bureaux. COSATU condemns in the strongest terms the Banking Council and other credit providers' intransigent attitude towards government‘s attempt to assist the working poor.
Adverse credit information and adverse enforcement action are used by credit providers for purposes of credit scoring or credit assessment.
The implications of a listing are far-reaching and include being barred from prospective employment, not being able to register and secure loans for educational purposes, not able rent out accommodation and being unable to obtain cheap financing, for instance to start a small business.
The removal of the listings would have positive socio-economic impact on working families and help in the creation of job opportunities.
It is important to note that the amnesty only provides for removal of adverse credit information and not the whole credit record. The credit record will remain e.g. that a consumer has mortgage bond with a bank. Therefore, the media is insincere in reporting that the amnesty would result in credit providers not being able to assess credit risks of prospective consumers.
Statement issued by Advocate Mpheane Lepaku, COSATU Trade policy Co-ordinator, November 14 2013
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