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Credit Amnesty Effective 1 April 2014

Credit Amnesty Effective 1 April 2014

What you need to know…

The Department of Trade and Industry (DTI) has recently published the Removal of Adverse Consumer Information and Information Relating to Paid up Judgments Regulations 2014 which will come into effect on 1 April 2014. This is referred to in the media as Credit Amnesty.

This legislation means that the existing adverse information on a consumer, excluding unpaid judgments, will be removed from all Credit Bureau reports from 1 April.  It’s important to note that the debt is not removed, simply the appearance of that unpaid debt on a Credit Bureau report.  New adverse listings and judgments will be added on 1 April, but when they are paid, they will be removed.

The Credit Amnesty Regulations state that any “adverse” and “paid up” information that has been removed may not be used for any reason, including credit scoring and assessments of consumers.

This will affect Credit Bureau searches via WinCredit, from 1 April 2014.  In summary:

Consumer Profile Search adverse data to be removed:

  • All adverse listings (defaults listed by a Credit Bureau).
  • Disputes regarding adverse listings
  • All paid up judgments (effective immediately and on an ongoing basis)

Consumer Profile Search data NOT to be removed:

  • Unpaid judgments
  • Administration orders
  • Emolument orders
  • Sequestrations and rehabilitation listings
  • Debt Counselling notification

Judgment Searches and Doc Copies – Paid judgments will not appear in a Judgment Search result, and Document Copies for these paid judgments will no longer be available.

WinDeed Person Alerts – Only new unpaid defaults and unpaid judgments will appear for a monitored consumer. Paid judgments and paid defaults will be removed on an ongoing basis by the Credit Bureaus.

Please follow the link to read the full Regulations.

The impact on Credit Bureaus:

  • Credit Bureaus will have to ensure that adverse credit information and paid up judgments are removed from all reports.
  • Credit Bureaus will be given 2 months to implement these changes, and by no later than 1 June 2014, adverse credit information and all paid up judgments must not appear on reports.

The impact on Credit Providers:

  • Credit Providers will not be allowed to use adverse credit information and information relating to paid up judgments that have been removed in terms of these Regulations for any reason, including credit scoring and assessment.
  • Credit Providers will be required to submit all information relating to paid up judgments to all registered Credit Bureaus within seven days of receipt of such payment from the consumer. The Credit Bureau will then be required to remove these paid up judgments from its systems within 7 days of receiving the information from the Credit Provider.