As if Credit Bureaux were not having enough challenges from the NCR on compliance with the data cleansing provisions of the NCA’s regulations, Transunion ITC now reports that:

“Since mid-November 2007, all Credit Bureaus in South Africa have been denied access to the Johannesburg Court and hence cannot record judgments. No clients have been advised of any judgments from the Johannesburg Court for nearly three months.

The Court Manager made this decision, and despite recent correspondence with the Director General, it would appear that the situation cannot be rectified immediately. The decision was apparently made over a problem with office space at the court, but this should not have restricted our rights to obtain judgments.

Via legal representation, we have requested that the State Law advisors fast-track this issue and we expect a response in the next two weeks. We have also raised the issue with the Credit Bureau Association and the National Credit Regulator.

The impact of not obtaining these judgments is considerable for all lenders. TransUnion are pursuing an urgent solution and we will keep you informed.”

The impact of creditors not obtaining these judgments, referred to my Transunion is that:

1. Credit Providers may grant credit to debtors in the jurisdiction of the largest magistrate court in the country who are not credit worthy; and

2. if they are full blown credit providers entering into credit agreements in terms of Section 8 of the NCA (other then incidental credit), then they could be failing short of their obligations in terms of Section 80 of the NCA, not to grant reckless credit as they have been unable to properly conduct the assessments of the debtors as required in terms of the section.

Obviously creditors could argue that they conducted the assessment to the best of their ability in the circumstances but the action of the Johannesburg magistrates court is frustrating the goals and intentions of the National Credit Act.