Paid up adverse credit records

The Department of Trade and Industry published the National Credit Amendment Act (NCAA) and supporting Regulations on Friday 13 March 2015, with the effective date being same date of publication.

The NCAA requires credit providers to furnish all registered credit bureaux with information relating to paid up adverse records within seven days of receipt of settlement from a consumer. Other data suppliers are required to provide this information in their next data submission to the credit bureaux.

In turn, credit bureaux are required to remove adverse status codes in respect of which the debt has been settled, either partially or in full, within seven days of receiving the information from any data supplier.

The changes made by Experian SA to comply with this requirement will include the settled adverse status codes being removed whilst ensuring that the payment history is retained within the account information section on the credit bureau record.

In the event of the debt being fully settled, as reflected in the Furniture Retailer example above, the balance is zeroised and the account status would reflect as paid. The payment cycle will reflect a ‘0’ which represents ‘current’.

In the event of the arrears being partially paid, two scenarios are possible as reflected in the Bank – Credit Card example.

• In Scenario 1 above, the Bank-Credit Card balance reflects the updated outstanding amount. The account status would be open or current and the payment cycle will reflect a ‘0’ which represents ‘current’ as provided by the credit provider.
• In Scenario 2 above, the Bank-Credit Card balance reflects the updated outstanding amount. The account status would be open or current, however the payment cycle will reflect the months outstanding as provided by the Credit Provider in the data submission.

For all examples, the payment profiles would no longer reflect as default and would be displayed in the account information section as per the illustration above.

Illustration of what the online data string will reflect:

Transaction Type – Output String – Pre NCAA

Pre-NCAA adverse account status code:

Months In Arrears               99876 Status Code                        L Status Code Description     Handed over

Transaction Type – Output String – Pre NCAA: Debt settled in full

Post-NCAA – Debt settled in full – adverse account is now displayed in the payment profile section:

Months In Arrears              099876 Status Code                       ‘P’ Status Code Description     Paid

Transaction Type – Output String – Post NCAA: Debt partially settled

Post-NCAA – Debt partially paid – adverse account is now displayed in the payment profile section:

Months In Arrears              099876 (As provided by Credit Provider) Status Code                        ‘  ‘ Status code Description      Open or current

OR

Months In Arrears               499876 (As provided by Credit Provider) Status Code                        ‘  ‘ Status code Description      Open or current

Regarding the submission of the information relating to paid up adverse records by the data suppliers, we would like to remind our clients that the paid up adverse records must be submitted electronically as a separate file using the same layout as your current monthly submission.

We are in the process of interpreting the finer points of the regulations first released to the market last Friday and will keep you updated in terms of our approach.

Please do not hesitate to contact your account manager should you require any additional details at this time.

Kind regards, Experian South Africa