The dispute that led to the Supreme Court of Appeal (SCA) case concerned the period for which fraud information is listed on the SAFPS’s database.
The NCR contended that the information in question was negative credit information that could not be retained for longer than one year.
The SAFPS said fraud information could not be viewed in the same light as negative credit information and relied on the predictive nature of the fraud information, which had a relevant bearing for 10 years.
The nucleus of the judgment rests on the purposes of the National Credit Act (NCA). This includes to “promote a sustainable and responsible credit market, credit industry, and to protect consumers”.
Van Schalkwyk says: “Further to this, the judgment gives guidance on the manner in which to interpret statute and that it should always lead to sensible and business-like results.
"To illustrate this point, the court uses an example of a person who has lost his job and due to prolonged lack of income gets sequestrated. Later, the person earns some income, settles the debt and gets rehabilitated.
"The details of this person will remain on the credit bureau database for 10 years.
"But the person who is listed for fraud, who lies to credit providers, manufactures payslips and bank statements and misrepresents the facts with the intention never to repay the debt, will be removed after one year.”
The court makes it clear that by looking at this example, the NCR’s interpretation of the statute “leads to patently insensible and unbusiness-like results and cuts across the purposes of the NCA - it would undermine the ability of the financial industry to protect itself against fraud and in doing so, protect fraudsters and not the victims of fraud; it would not protect consumers”.
This interpretation does not promote a responsible and sustainable credit market or credit industry and does not protect consumers.
Van Schalkwyk says: “We welcome the SCA judgment and see this as a vote of confidence in our work. In the same breath we recognise the very important work of the NCR and will continue to support the regulator with our efforts to fight fraud and financial crime, as well as protect consumers against fraudsters.”
The SAFPS was incorporated in 2000 as a non-profit organisation by the major banks to combat fraud in commerce. Its current members include most major credit providers in South Africa, some insurance companies, as well as the SA Revenue Service, the Financial Intelligence Centre and the SA Reserve Bank.