CONSUMERS must guard their identity documents and regularly access their credit profiles to check for incorrect listings and fraudulent credit and loan accounts that may have been opened up in their names.
This was the advice from Credit Ombudsman Nicky Lala Mohan, speaking on the sidelines of a credit industry awareness campaign held in Durban last week.
Lala Mohan said his office, which handles consumer disputes about negative listings on credit bureaux and complaints about non-bank credit providers such as micro-lenders and furniture and clothing retailers, has received 40 fraud-related complaints over the past six months. These complaints involved cases where fraudsters had accessed consumers’ personal information to open accounts.
“It may not be a major problem yet, but we are of the view that it is on the increase,” said Lala Mohan.
“We find that in certain instances, consumers’ personal information, such as identity documentation, is being used to open fraudulent accounts and the consumer is having to bear the brunt of resolving the issue,” he said.
Lala Mohan said there could be more cases but because consumers do not regularly check their credit profiles, they might be unaware of fraud, until of course, they need credit and are surprised by a poor credit report.
According to the latest Credit Bureau Monitor released by the National Credit Regulator recently, the number of consumers applying for their credit reports decreased 11,6% year on year in March, with 149 222 credit reports issued in the first quarter of 2015. This figure is low given that there are 23,11 million credit active consumers who now owe R1,61 trillion, according to the NCR’s Consumer Credit Market Report. Of these, 10,41 million consumers have impaired credit records.
Lala Mohan said consumers should access their credit profiles — consumers are entitled to receive one free report per year — to check for fraud and to assess the accuracy of their profiles.
“This is a prudent measure of assessing the accuracy of one’s credit profile as there could be inaccurate information appearing on the records,” he said.
“Regular assessment of one’s credit profile ensures that all the information that is reflected and used by other credit providers in assessing credit applications are correct and up to date,” he said.
Lala Mohan advised consumers to immediately raise the issue of inaccurate information or unknown accounts with credit providers and bureaux.
“The credit bureaux then have 20 days to fix it and if they don’t resolve it then consumers can complain to us,” he said.
Lala Mohan said South African consumers are often slack about protecting personal information such as identity numbers.
“We are so bad about revealing our ID number. We leave it around everywhere on documents and paper trails, and if you go into a building you are asked to put your ID number down,” he said.
“Consumers have got to be careful about revealing their identity number. We need to treat our ID numbers as Pin numbers,” he said.
Lala Mohan said the top three complaints received by his office over the past six months were disputes about incorrect credit bureau information, emoluments attachment orders (garnishee orders) and issues regarding consumers’ statements of account.
Lala Mohan added that consumers often do not understand how payment profiles on their credit reports work.
“Consumers are often not aware that payment profiles reflect for a maximum period of five years from date of last transaction. Even though an account may have been paid up, the payment profile will remain for five years,” he said.
“Consumers are confused or upset when they realise that negative information, for example, non-payments, will reflect for so long on their records even after they paid the account in full,” he said.
During the 2014/15 financial year, his office received 5 890 complaints, of which 701 were from KZN, compared with 3 567 from Gauteng and 1 021 from the Western Cape.
Lala Mohan added that consumers are often confused about which ombudsman to approach with their complaints, which is why the Financial Industry Ombudsman including his office, the Ombudsman for Banking Services, the Short-Term Insurance Ombudsman and the Long-Term Insurance Ombudsman have set up a joint call centre to direct complaints to the correct ombudsman. Consumers can contact the call centre at 0860 662 837