Many South African companies may have been abusing information from credit bureaus about job applicants.
This suggestion emerges from yesterday’s speech made by the minister of trade and industry Rob Davies. Presenting new regulations around use of information held by credit bureaus Davies said cautioned companies against abuse of information from credit bureaus.
South Africa is listed with talk of employers who demand to draw credit records for job applicants and rejecting black listed candidates.
“We have been inundated with correspondence from the public showing clearly that the blacklisting at the credit bureaus has now become a new impediment to employment opportunities,” said Davies.
“We caution companies to refrain from using the blacklisting information held by credit bureaus incorrectly to deny people employment. We accept that in some financial positions, such as those in the banking sector, the credit bureau information can be used as a reference in considering persons for employment in that sector.”
However, added Davies, we will not allow the continued abuse of consumer credit information held by credit bureaus for dubious reasons. “We have impressed on the NCR to monitor the use of consumer credit information held by the credit bureaus very closely.”
Davies said “While others can turn a blind eye to the predicament of many South Africans, it is difficult to ignore instances such as the one contained in the email that the dti received yesterday from a 54-year-old father with four sons…”,
The 54 years old father is currently unemployed was explaining that he cannot get employment due to his negative credit record. “In his email he desperately says “’Bottomline is, I need to earn money in order to achieve and maintain a positive credit record, but if I am refused any work, how on earth can I repay my debt and clear my name? I am certain that your department will come up with a solution for this national problem in the near future.’”
Davies said “This is one of the many emails received, including from graduates that cannot find jobs due to blacklisting arising from student loans.”
Davies was presenting new regulations: The Removal of Adverse Credit Information and Information Relating to Paid Up Judgments. These regulations together with the National Credit Amendment Bill (NCAB) promise a new era in the consumer credit market.
He said “The purpose of this process is to assist people who are in the same situation as this 54-year old father and those graduates that wish to be employed so they can be able to repay their student loans.”
The regulations which will see clearance of black listed consumers from credit bureaus kicks in two months. Davies said “This Notice comes into effect on 1 April 2014 and credit bureaus must remove all such information within two months.”
“Therefore effective from 1 April 2014 credit bureaus are prohibited from displaying or providing information that ought to be removed in terms of this Notice to anyone. The credit bureaus must within thirty (30) days after May 2014 submit a report by an independent auditor confirming that all such information has been removed.”
He added “This Notice is applicable automatically to all affected consumers, unlike the 2007 amnesty whereby a consumer was required to follow a particular process to benefit from the amnesty. This means a consumer who may not even be aware of this Notice will nevertheless benefit.”