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Thread: Effect of NCA on tracing (ITC search)

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    Question Effect of NCA on tracing (ITC search)

    Hi, I'm systems administrator for various law firms and therefore responsible for application/registration of various software packages. One of them Consumer ITC search - according to the new act a search can be done with permission of the consumer. Does this "permission" also apply when doing this search for tracing purposes in order to do debt collecting?

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    Site Caretaker Dave A's Avatar
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    I assume you are refering to using consumer credit information databases for tracing purposes. The relevant section seems to be Right to Confidential Treatment - Section 68.

    Right to confidential treatment

    68. (1) Any person who, in terms of this Act, receives, compiles, retains or reports any confidential information pertaining to a consumer or prospective consumer must protect the confidentiality of that information, and in particular, must-

    (a) use that information only for a purpose permitted or required in terms of this Act, other national legislation or applicable provincial legislation; and

    (b) report or release that information only to the consumer or prospective consumer, or to another person-

    (i) to the extent permitted or required by this Act, other national legislation or applicable provincial legislation; or

    (ii) as directed by-

    (aa) the instructions of the consumer or prospective consumer; or

    (bb) an order of a court or the Tribunal.

    (2) Failure by a credit bureau to comply with a notice issued in terms of section 55, in relation to this section, is an offence.
    Hopefully Eugene or someone else will pop by with something more definitive, but at this stage an interesting thought occurred:-

    Procedurally, we're pretty much obliged to do a credit check, but can only do so with authorisation from the consumer?
    The trouble with opportunity is it normally comes dressed up as work.

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    Silver Member Eugene's Avatar
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    Hi guys. Have been outa station for a couple of days. Ronel, I will draft your answer as soon as I am back in office.

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    Silver Member Eugene's Avatar
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    Ronel,

    Section 18(4) of the Regulations under the NCA authorises the credit bureaus to issue credit reports in the event of a couple of instances. In subsection (g) it may be used to verify employment and section (i) deals with tracing of a consumer which entered into a credit agreement. The regulations further state that if you intend using the bureau for verifications of employment and qualifications, the consent of the consumer is required, BUT the consent in not required when tracing a debtor which entered into a credit agreement (Regulation 18(5)). Problem now is that one might have a number of collections that are not credit agreements as contemplated in the Act and I believe that in these instances, you would need the consent of the consumer.

    I have scanned through many of the “standard” contracts used in the retail industry and all of them contained a clause where the consumer gives permission that his/her credit record may be issued in the event of him/her being a trace or in default with any payments.

    With regards to Dave’s post as to the right of confidential treatment, I believe that a Credit Bureau do not infringe on privacy. The credit bureaus are only allowed to hold the following data on their systems:
    1. Public information – that is judgments issued in a Court of Law and these are public records which means that anyone can go and look at this information. Usually kept on the bureau’s database for 5 years and on the court records for 30 years.
    2. Identifying information – This information is given by the credit applicants on the application forms when they apply for credit. When a credit applicant completes a credit application form with a consent clause in the small print, they are giving the credit provider the right to check this information and your profile with the Credit Bureau.
    3. Credit behaviour information – Information that is forwarded to Credit Bureau by the credit provider. This information is a reflection of how you have conducted your account or a payment profile. The credit provider needs to ensure that the information is correct and the credit applicant is aware that the information is being submitted to the Credit Bureau. This is often outlined in the small print of the credit agreement/application.

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