Up until recently, all governance of retail stores with regards to credit was handled by the National Credit Regulator (NCR), which has been preoccupied with the implementation of the new
debt counseling system. Retail stores and their mistreatment of consumers have largely been overlooked, despite retail stores being the worst of the credit lending lot, according to many debt counselors.
While poor lending claims, and claims relating to pawn shops will still be referred to the NCR, other complaints against retail stores will be dealt with by the Credit Ombudsman. This means that consumers have an opportunity for recourse should they be treated unfairly according to the requirements of the National Credit Act.
While many retail stores are quick to report non- or late payments to the credit bureaus, they fail to notify the bureaus when the client is back in good standing and all account payments are up to date. In fact, according to the Credit Information Ombudsman’s annual report for 2009, failure to notify the bureaus of rescinded judgements is one of the biggest cause for complaints in the retail credit lending sector.
Failure to report good standing to the credit bureau within a 20-working-day period is in contravention to the National Credit Act. Also, any recourse taken on the part of the creditor has to follow specific procedures which many lenders don’t live up to. These will also be investigated by the Credit Ombudsman.