Sharon wants to buy a secondhand car but needs to borrow money from a credit provider in order to pay for it. She goes to a microlender who says her name has been listed with a credit bureau so they will not give her the loan. Sharon does not know anything about this listing and thinks it is unfair that they will not give her the loan.

WHAT DOES THE LAW SAY?

The National Credit Act defines the steps that must be taken to deal with this problem. (See Role of credit bureaus)

WHAT CAN YOU DO?

These steps can be used to guide you in the way you deal with Sharon’s problem:

1. EXPLAIN WHAT CAN AND CANNOT BE DONE TO HELP THE CLIENT

• Help her understand the different legal actions that may have been taken against her if she failed to repay her debts in the past
• Advise her of her rights and support her in claiming these rights
• Refer her to a registered debt counsellor as well as to the other institutions that govern the National Credit Act. Tell her that some credit providers choose only to work with debt counsellors, and may not want to talk with you.

2. RECORD INFORMATION ABOUT THE CLIENT

• Sharon’s details, such as name, address, ID number
• Her debt and credit record
• Check if her income is more or less than her expenses
• Make as many copies of this as you need (See below for the Form for Recording Client’s Basic Information)

3. ASSESS THE CREDIT PROVIDER’S ACTIONS

Check whether the correct processes were followed by the credit bureau and record the following details: 

• Which credit bureau is your client listed at? 
• Contact name and details: Is the bureau registered? 
• Is the information correct? 
• Are they holding information that they should not have?
  • Please give details: 
• Have they had any difficulty getting information from the bureau?
  • If yes, please give details:

4. DEAL WITH THE PROBLEM

Sharon has the right to know the reasons for being refused credit and has been told that this is because her name is negatively listed with a credit bureau. (See: Role of credit bureaus)

Remember that credit providers may refuse to lend money:

• If this would mean that the loan would be reckless
• When the credit provider is unable to check the consumer’s credit record (and does not want to run the risk of reckless lending)
• When the consumer is negatively listed and is prohibited from borrowing any more money.

Given the reasons given to Sharon for the microlender refusing to give her credit, you should now follow up with the credit provider and the relevant credit bureau.

FORM FOR RECORDING CLIENT’S BASIC INFORMATION

Client’s surname: ……………………….. First names……………….

ID no:  ………………………..

Address:     ……………………………………………………………………

Contact numbers: home: …………………….   work: …………………………Cell: …………………………………….

Paralegal’s name:      ………………………………………………………….

Start date: …………………………………………………………………………

THE CLIENT’S STORY

Ask why the client has come to the advice office

(Use a blank page to record the main points of the client’s story)

CREDIT INFORMATION CHECKLIST

(Complete details for each debt)

Name of credit provider (organisation/person to be paid): ………………………………………………………………………………………….

Department/person to be contacted:  ………………………………………………………………………………………….

Street address of the credit provider: …………………………………………………………………………………………..

Postal address    ……………………………………………………………….

Phone: …………………………………………………   E-mail:  ………………………………………………

Amount of initial loan: ……………………………….   Period of loan: ……………………………….

Total amount still owing: ……………………………………………………………………………………………..

Amount to be paid monthly: ……………………….  

Number of payments still to be made: ………………

INCOME (Received each month)

R …………………………………………………………………

R …………………………………………………………………

R …………………………………………………………………

R …………………………………………………………………

EXPENSES (Must pay each month)

Rent:    ……………………………………………………………………………………………………

Electricity:     …………………………………………………………………………………………..

Phone:    …………………………………………………………………………………………………

Airtime:     ………………………………………………………………………………………………

Transport:     ……………………………………………………………………………………………

Groceries:     ……………………………………………………………………………………………

Toiletries:     …………………………………………………………………………………………….

Clothes and shoes: …………………………………………………………………………….

School expenses:  ……………………………………………………………………………….

Support of family members: ……………………………………………………………

Debt instalments: ………………………………………………………………………………

Donation to religious institution: …………………………………

Burial society or funeral policy: ………………………………………………………

Insurance:      …………………………………………………………………………………………..

Cigarettes:      ………………………………………………………………………………………….

Alcohol:     ………………………………………………………………………………………………

Sweets, cool drinks and other snacks: ……………………………………………

School fees:   ………………………………………………………………………………………..

Religious festivals, e.g. Christmas/Eid: …………………………………………….

Birthdays:      ……………………………………………………………………………………………

Weddings:      …………………………………………………………………………………………..

Initiations:      ………………………………………………………………………………………….

Funerals:     ……………………………………………………………………………………………..

Travel to visit family: ………………………………………………………………………..

TOTAL MONTHLY INCOME: R : 

TOTAL MONTHLY EXPENSES: R :

MONTHLY INCOME LESS EXPENSES: R :