While, as previously reported, the NCR is battling to come to grips with the challenges of the poor drafting of the National Credit Act and the problems with the implementation of the debt counsellors – it would appear there was no Christmas grace at a very active NCR in December 2007.

The NCR was in a tough mood, provisionally liquidating the Rudco Finance (Pty) Ltd, the company which was under NCR investigation in July and August 2007, which revealed that Rudco takes repayments from consumers upfront for periods of 6 to 12 months, with the promise to provide loans in a future date, which promise was not upheld by Rudco.

The NCR issued a compliance notice in terms of the National Credit Act to Rudco on 13 August 2007. However the NCR did not stop there and subsequently obtained an order from the National Consumer Tribunal on 23 November 2007. The Tribunal, amongst others, ordered that Rudco to refund all affected consumers who have made monthly payments without receiving any loans. According to Mr Visagie of Rudco this entails about 1800 consumers with repayments of R7 million. Such repayments should have been effected by 12:00 on 23 November 2007. Rudco has not complied with the Tribunal order and the NCR has been inundated with calls from consumers complaining that they have not received their repayments. Rudco has also not provided the NCR with progress report on repayments made to consumers.

The non adherence by Rudco with the Tribunal order constitutes a criminal offence, which in terms of the National Credit Act is punishable with a fine or with imprisonment not exceeding 10 years or to both a fine and imprisonment.

The NCR didn’t stop there and approached the High Court in Cape Town to obtain a liquidation order against Rudco, which order the court provisional granted on the 6th December 2007.

Furthermore the NCR reports that:

The National Credit Regulator (NCR) has served TransUnion Credit Bureau with a Compliance Notice following the latter’s failure to comply with regulations relating to data cleansing in terms of the National Credit Act.
Gabriel Davel, CEO of the NCR, says Credit Bureaus were required to submit an audit reports to the National Credit Regulator by 31 August 2007.
The purpose of these reports was to assess:

(a) whether the information that had to be removed in terms of the regulations was in fact removed,
(b) to evaluate the accuracy of consumer information held by credit bureaus, and
(c) to assess the adequacy of the procedures followed by bureaus to ensure that consumer information is accurate.

The TransUnion audit report did not meet the requirements for an audit report as required in terms of the regulations. These weaknesses had been pointed out previously.
In terms of regulation 3, TransUnion was required to inform all registered credit bureaux of the paid up judgments that were removed from its records. TransUnion was also required to remove similar information from its records upon receiving such advice from other registered credit bureaux. “It does not appear as if these requirements were met,” says Davel.

In order to address areas of non-compliance, TransUnion is required to take the steps as set out in the Compliance Notice. These include the following:

• Written confirmation that all information that had to be removed in terms of the Act, has in fact been removed
• Written confirmation that all other credit bureaus have been notified of judgements of up to R50 000 that have been removed by TransUnion from consumers’ credit records
• TransUnion to submit an audit report to the NCR that meets requirements of the Act and the directives of the NCR.

TransUnion may appeal to the National Consumer Tribunal within 15 business days.