Credit Ombud Nicky Lala Mohan was upbeat when he released his office’s annual report yesterday, which was themed around hope. And rightly so: his office was celebrating giving back more than R15 million to consumers, which was a dramatic up-tick on the previous year.
“In line with giving hope to consumers, the achievement that we are most proud of is the more than R15.5m (an increase of 45.85%) that we put back into consumers’ pockets in these difficult financial times. This is turning hope into reality,” says Lala Mohan. “This figure is calculated by adding all the amounts where consumers overpaid or where we found some breach of the law which entitled consumers to a refund or recalculation of their amounts owed.”
Lala Mohan says the office’s call centre recorded 18 072 complaints and queries (up 26%), out of 35 162 calls fielded. The ombud’s SMS line was central to its success last year, having received 11 246 SMSes from the public.
“We can see the impact of this project every time we appear on a television or radio show. We will find a couple of hundred SMSes in our inbox, sometimes immediately, which proves that many consumers prefer this method of making contact with us,” he says.
Disputes opened for investigation were up too, totalling 4 508, which was an increase of 9.34%. A total of 4 662 disputes were closed in the year, which was an increase of 5.43%.
The top three most common cases dealt with by his office were invalid listings, prescription of debt and incorrect statements of account, which, he says, was often deliberate. Lala Mohan says credit providers and debt collectors often withhold statements to hide their costs: “By withholding a statement, consumers don’t get to see what the collection charges are. You can’t see what you’re being charged for. In terms of the National Credit Act, consumers are entitled to view their statements.” The ombud can help by accessing those statements – and have unnecessary charges either scrapped or reimbursed, Lala Mohan says.
Other prevalent issues were emolument attachment orders, unfair credit bureau listings, fraud and reckless lending. In many cases, balances were written off, refunds issued, or consumers were helped to enter into payment arrangements.
Last year, the office resolved 64.76% disputes in consumers’ favour, a figure, which, the ombud says, has remained stable during his tenure.
“We’ve been constantly in line with this figure for the past three years. It shows that consumers out there need help – they go through the internal processes and don’t win with the credit providers or bureaus, so they come to us.”
Reckless credit provision is always a concern, Lala Mohan says, with 40% of complaints being made against credit providers, but he doesn’t believe there are systemic issues.
“Reckless lending is when you don’t apply affordability guidelines. The guidelines provide a blueprint for companies, but each company pushes the boundaries to suit themselves. In one case, a credit provider said a consumer had R2 left in their account after deductions, so they could afford the credit.”
Lala Mohan says his office is proud of its work because it had a good year.
“Generally, we are finding the numbers of complaints and queries to be increasing, due to the state of the economy, but much of it is owing to consumer education. We’ve done a lot of work around that, including outreach activities.”
OMBUD SERVICE IS FREE
The Credit Ombud’s service is free. The only requirements that must be met are:
• The complaint must be within the jurisdiction of the office;
• The complainant must follow the stipulated complaint process; and
• The complainant must sign or agree to the terms and conditions/rules and undertakings that accompany the complaint form.
The ombud’s rulings are binding on its members (credit providers and bureaus). If you’re not happy with the decision of the office, you may approach the National Credit Regulator, or seek alternative remedies.
To contact the Credit Ombud, phone 0861 662 837 or 011 781 6431, or SMS “Help” to 44786, email [email protected], or send a letter to PO Box 805, Pinegowrie, 2123. The office’s website is www.creditombud.org.za.