Monthly Archives: May 2014

Credit Amnesty

The Removal of Adverse Consumer Information and Information Relating to Paid-Up Judgments Regulations (‘Credit Information Amnesty’) which came into effect 1 April 2014, required credit bureaux to ensure that the adverse consumer information as defined by the regulations as well as paid up judgments as held on the database at 1 April, were not displayed or provided to credit providers, or any person requesting such information; and that by no later than 1 June 2014, this information must be removed.

In addition, the regulations require that on an on-going basis, paid up judgements are to be removed from the credit bureau records.

Credit providers are required to furnish all registered credit bureaux with information relating to paid up judgements within seven days of receipt of payment of the capital amount. In turn, credit bureaux are required to remove paid up judgement data within seven days of receipt of proof of payment.

Experian has removed approximately 35,000 paid up judgement records from our database. These include both the historical paid up judgements as well as those received after 1 April 2014 to date.

In order to create operational efficiencies, the Credit Providers Association (CPA) together with the Credit Bureau Association (CBA) have agreed a process and submission template for the notification of paid up judgments. This template has been shared with all our clients. Please let us know if you did not receive it so that we can resend.

Our account managers are available should you require training with your teams on the paid up judgements submission process and to assist with any questions you may have regarding the impact of these regulatory changes on your data.

The amendments to the National Credit Act were also recently passed into law on the 19th May; however the effective date is yet to be confirmed.

These amendments provide for the on-going removal of all paid up adverse information as received from credit providers. We are interpreting the regulation and will continue to keep you updated in terms of the requirements from both a credit bureau and credit provider perspective.

Experian South Africa

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Posted by on 30/05/2014 in Content


Interest rate hikes……Yikes- Credit Health Cronicles


So we have dodged a bullet with regard to the anticipated interest rate hikes on 22 May 2014. If you have bond, vehicle or any other large debt, this would certainly have affected you. The question is whether you would have had the additional funds to pay for this, usually, unbudgeted expense. South African consumers have been fortunate to have enjoyed fairly low interest rates over the last few years and this has led to many taking out bonds or buying vehicles in this period.  This has been in contradiction of economists and financial experts appealing to consumers to pay off as much debt as possible. The reality is that the majority of us will take on debt when it is “cheaper” to do so. That dream home is so much more affordable when the repo rate (rate at which banks borrow money from the Reserve Bank) is around 5%. That would mean we would get a bond at around 9% on the interest rate (if our affordability and credit status was good). A problem would arise if we would go with our maximum affordability and not take cognizance of interest rate hikes. Let’s have a look at how a 100 basis point (1%) interest rate hike would affect your repayments on a R700 000 and R1 000 000 home loan.

Bond repayments with 1% increase

Bond Amount

Repayment on 9%

Repayment on 10%

Increase in Repayment

R700 000

R6 298

R6 755


R1 000 000

R8 997

R9 650


How about an increase of 200 basis points (2%)?

Bond repayments with 2% increase

Bond Amount

Repayment on 9%

Repayment on 11%

Increase in Repayment

R700 000

R6 298

R7 225


R1 000 000

R8 997

R10 322

R1 325

As you can see, the reality of an interest rate increase is a rather large blow to your disposable income and your budget as a whole. So if you are in the process of buying a home, remember that you need to take potential interest rate hikes into account. This would also ring true for fixed interest rate deals as banks will not give you a fixed interest rate for the entire term of the bond. What are the chances of interest rates going up soon? No one would be able to give you a definitive answer as it is based on a number of factors such as the rate of growth in our economy, inflation, strike activity and a final decision by the Monetary Policy Committee. If we look at the history of interest rates in South Africa since 1998, the low interest rate trend after 2010 is very apparent. According to Gill Marcus (Governor of the Reserve Bank), the MPC holds the view that South Africa is on a rising interest rate cycle. What are your solutions to a rising interest rate over the next few months? If you have been paying more than your required installment on your bond, you are already ahead of the pack and the impact will not be that bad for you. If you are not paying more than the required installment, now would be a good time to start! If your bond is more than a year old, approach your bank for a rate review. Even a .25% decrease in your rate will make a difference. Just remember to continue paying your original installment and not the decreased amount when the decrease takes effect. If the increase in interest rates is really affecting your finances and ability to pay, you can increase the term of your bond from 20 to 30 years depending on your age and risk factors. This is a last resort and should be rectified when your finances have recovered by you paying more into your bond. We hope that this this newsletter has provided you with the reality of interest rate hikes and its impact on your personal finances. Remember that even if you don’t have a home, interest rate hikes will affect you indirectly with increases in transport, consumer goods and rent. Make sure you are on top of your finances and ensure your credit status is in good standing. That is your first step to ensuring you always get the best interest rates. Visit for more information

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Posted by on 30/05/2014 in Content


Clearing muddy waters of credit amnesty

Johannesburg – The latest credit amnesty by the department of trade and industry was bound to be misinterpreted by the general public and companies alike, according to Marelize Uys, chief operations officer (COO) at Managed Integrity Evaluation (MIE).

She said there is mass confusion about credit amnesty.

“Some people are going as far as to think their debt was going to be wiped clean. Obviously this is not the case,” she said.

“What this regulation does entail is the once off removal of adverse consumer credit information and paid up judgements, as well as a continuous removal of paid up judgements.”

What is a “paid up judgement”?

This is any contrary court judgements relating to debt where the consumer has settled the capital amounts. In other words, where the consumer has paid off their debt.

“What this means in terms of credit amnesty is that previously debt settlement was listed as ‘paid in full’ for a certain period of time. Now it will not be listed at all, which is good for consumers who have dealt with previous debt,” said Uys.

What does “adverse credit consumer information” mean?

Sometimes people with debt would be officially labelled as “delinquent”, “slow paying”, “absconded”, or “not contactable”, to name a few.

These are usually subjective categorisations of consumer behaviours and do not always reflect the individuals themselves.

“With the new regulations, consumers will not have to live with these labels if they have in fact paid of their debt,” sayd Uys.

How does this credit amnesty impact the credit bureaus?

Credit bureaus must ensure that they have removed all adverse consumer information pertaining to the terms of the credit amnesty.

The adverse data may not be displayed or provided to any prospective employers requesting such information.

Does the credit amnesty mean that a consumer’s debt is absolved?

The credit amnesty does not mean that consumer’s credit obligation no longer exists.

It rather means that certain adverse records regarding the manner in which the consumer previously managed their obligations will no longer be held on the records of the credit bureaus.

“The credit amnesty seeks to create the incentive for consumers to repay their debt instead of naming and shaming people based on subjectivity,” said Uys.

Can employers still conduct credit checks on prospective employees?

Credit checks may be conducted within the recruitment process if the employer continues to abide by the regulations.

In the background screening industry a credit check can be requested for one of the following purposes:

– Employment in a position that requires trust and honesty and entails the handling of cash or finances;

– Verifying education qualifications and employment;

– Fraud detection and prevention services.

Companies looking to vet prospective employees will still be provided with adverse judgements listed against a consumer for debts that have not been settled.

“Additionally, previous employment history, address history and ID verification will also reflect on credit reports,” said Uys.

“This includes new adverse credit information and new judgements as well. So companies need not worry about credit amnesty’s impact on their vetting process.”

– Fin24


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Posted by on 23/05/2014 in Content


Law Society meet with City of Cape Town to discuss issues surrounding rates clearances and refunds

Five members of the CLS Property Law Committee met with the deputy Mayor, Mr Ian Nielsen and senior City officials on 19th May 2014 regarding problems with rates clearances and refunds.



The City officials took pains to explain precisely why the delays and problems occurred. The following are relevant:


 City officials are adamant that the system will be vastly speeded up by mid-June when a turnaround time of approximately 15 days should be achieved. The reason for the speeding up is a long overdue “computer run” planned for the near future and that will deal with most of the backlog.


 “Long outstanding matters” are those that date from before March 2014. All these matters will be urgently addressed as a matter of priority.


The “deeds office” approach by the City, namely to reject any rates clearance application with incorrect documents or information, will be enforced more strictly. Some of the delays can be attributed to attorneys who complained about rejection of their applications, whereafter the City officials tried to assist by fixing lesser defects in applications. The result was that proper applications were delayed because of defective applications blocking the queue. If defective applications are immediately rejected, a consistent turnaround time of less than 10 days can be achieved.


City will soon allocate a dedicated line and address for problems and queries. One of the biggest headaches for City is complainants who lodge a complaint at several levels and demand immediate response. When a senior person then addresses the issue, the system blocks because other officials are also working on the same matter.


The CRC 1 rates clearance certificate debacle also had repercussions, as the requirement for an advanced electronic signature entails more than just inserting the electronic signature: the entire process must be evaluated and verified by the approving institution (there are only two in the country) before the advanced electronic signature can be released. It appears that few, if any, of the metropoles in the country are on schedule and it is unlikely that the deadline of 1 July 2014 for the new clearance certificates will be met.


Both the City and the members expressed concern that some firms consistently enjoy faster turnaround times than others. The City is well aware of the problem and is monitoring the situation but will disclose particulars. Suffice to mention that staff in the rates department has in the past been dismissed for disciplinary reasons.


There are syndicates who target the rates and refund processes and some even managed to change bank account numbers with the result that refunds ended up in the account of a fraudster. The City has a forensic department that operates covertly: members were told that successful arrests were recently made. Every conveyancer should bear in mind that the account and address details, both of the client and of the conveyancing firm in the rates and refund documents, are desirable targets that fraudsters attempt to obtain. Fraud is one of the compelling reasons why the City intends to eliminate manual applications as soon as possible, to rely only on electronic rates clearance certificates and then only with attorneys registered as business partners on the City’s system.


The refund process will in future also be simplified and limited to a refund via the conveyancer to the trust account or the clients nominated account. Where possible, verification will be limited to a bank account of the client plus proof of identity where appropriate.


The Committee and City officials will again meet by mid June 2014 to evaluate turnaround times and the progress made with the new Section 118 rates clearance documentation. Colleagues are requested to refrain from lodging complaints other than through the proper channels at City.

Meyer de Waal

Oosthuizen and Co Meyer de Waal Inc 


Posted by on 21/05/2014 in Content


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Getting out of debt requires great discipline

Johannesburg – The biggest challenge for people in debt is resisting the urge to spend or incur more debt, according to Gavin Payne, executive head of retail risk at Nedbank.

“Getting out of debt requires great discipline. It is important not to add to your debt, particularly now, given that we are at the start of a rising interest rate cycle,” he said.

“Getting out of debt is not an impossible challenge. The solution begins with the correct attitude and a commitment to resolve or improve the situation, undertaken in small steps that will result in dramatic change.”

He offers guidelines for dealing with financial distress:
Be realistic about your financial situation
It’s always important to be honest and realistic about one’s financial situation before you even take steps to address the problem.

Then you need to dedicate time to evaluate your overall financial situation, including the debt component.

Come up with a draft breakdown of your finances, taking into account your expenditure against your monthly income or any other form of affordability.

Thereafter, plan your debt management activities as part of your overall financial plan for the year or period ahead to build financial fitness in the long term.
Once you’ve reached the point of honesty and realisation, you’re likely to come up with a solution which is not going to exacerbate your situation.
Be proactive
When you are in financial difficulty and cannot make the minimum payments on your debt, be proactive.

Don’t bury your head in the sand. Talk to those you owe money and explain your circumstances.

You may think you’re admitting defeat, but this is the first step to dealing with the issue.

If you are open and honest and go to your creditor with a clear plan of how you plan to pay off the debt, they will be more understanding and more likely to work with you to make that happen.
Furthermore, if you are upfront with your creditor they can assist you by possibly rearranging or restructuring your debt.

This may mean entering into a debt restructuring process, where an expert will analyse your finances and work out how much you can pay back whilst keeping enough for basic living expenses.

They can even negotiate on your behalf to reduce the minimum amount payable and possibly even the interest owed on the debt.

Since 2009 Nedbank has restructured over 20 000 home loans, allowing families to retain their homes through effective rehabilitations.

Take small steps

Paying off debt may seem like a mammoth task. However, one that plays a critical role in building financial fitness.

Therefore, it is important to explore various steps that will assist in reaching this goal.

– Don’t be afraid to cut back your expenses. Live within your means.

If you’ve done this and your expenses are still too high, then consider downgrading on your car or home or getting a part-time job to increase the cash flow.

– Start using cash when you shop. Research has shown that simply by paying in cash, people don’t spend as much.

In fact, paying in cash tends to save people between 12% to 18% when making purchases.
Don’t make any more debt
Before you think about how to start paying off your debt, you need to stop adding to it.

Close those retail store accounts and cut up your credit cards. The temptation to continue using them again is strong, so eliminate the option.

– Fin24

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Posted by on 08/05/2014 in Content