You could end up paying more for credit if the South African Fraud Prevention Services (SAFPS) loses its battle with the National Credit Regulator (NCR), Manie van Schalkwyk, the executive director of the SAFPS, told Personal Finance this week.

The SAFPS maintains a database of the names of people who have been listed for misdeeds ranging from forged salary slips, bank statements and qualifications, to insurance fraud and identity theft.

You can be listed by the SAFPS’s members – banks, insurers, microlenders and clothing retailers – even if you haven’t been convicted of fraud.

The NCR is of the view that the SAFPS must be registered as a credit bureau and be subject to the rules regulating bureaus. These rules limit the “shelf life” of different types of data. For example, if you have a judgment to your name, it can’t stay on your credit report for longer than five years from the time that the judgment was issued.

But the SAFPS contends that it doesn’t operate like a regular credit bureau, because it doesn’t store information relating to your payment profile or credit history.

In 2010, the NCR instructed the SAFPS to register as a credit bureau. The SAFPS challenged the instruction. The matter was referred to the National Consumer Tribunal (NCT), which decided in favour of the SAFPS. The NCR then applied to the High Court to review the tribunal’s decision. The High Court found that the SAFPS’s activities contravene the Act, so it set aside the tribunal’s decision and ordered the SAFPS to register as a credit bureau.

Van Schalkwyk says the NCR has once again reported the SAFPS to the tribunal.

“The NCR is of the view that fraud information is the same as negative credit information. Therefore, it is their belief that this information should be listed on the database for one year instead of the current 10-year display period. The tribunal agrees with the NCR.

“If this judgment is implemented, it means that SAFPS must remove 87 percent of its database,” he says. This effectively means introducing into the financial system a large number of people who pose a significant risk to creditors.

“We are appealing this judgment from the NCT to the High Court. The appeal date is set for August 31.”