01 Oct 2010

Credit & Debt In Numbers

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Olive Masha (Debt Counsellor) @ Lucid Living

As at the end of June 2010, credit bureaus had records for 18.32 million credit-active  consumers, according to the National Credit Regulator .

The number of consumers with impaired  records continued to increase reaching 8.59 million.

212 000 new consumers have been blacklisted by credit providers this quarter, increasing the number to 739 000 year-on-year.

It is evident that the number of consumers defaulting on monthly repayments continues to rise. As a result the action by creditors, reflect a growing intolerance and a firm resolve to improve collections of these bad debts. This is borne out by the steady increase in blacklisting, judgments and other legal action.

Impaired records currently represent 46.9% of all credit active consumers, comprising –

17.3% of consumers in 3 months or more in arrears;

15.6% of consumers with adverse listings; and

13.9% of consumers with judgments and administration orders.

Blacklisting on the credit bureau is a prelude to legal action (judgment) and the eventual repossession of a consumer’s assets.

With the August CPI  at 3.5% (its lowest in 10 years) it’s clear that consumer spending has been reined in dramatically. In this quarter 10.28 million enquiries were made (to the credit bureau) for consumers seeking credit compared to 21.47 million enquiries for tracing/debt collection purposes (increased by 15.6% quarter-on-quarter).

The rise in tracing/debt collection enquiries supports the view that creditors are aggressively attempting to recoup current losses on non-performing accounts.

There were 13,300 disputes lodged with credit bureaus pertaining to incorrect information on consumer’s credit reports (an increase of 86.7% year-on-year). A staggering 72% of disputes were resolved in favour of the consumers i.e. the information was proven to be incorrect.

What the numbers say –

1 The situation for financially distressed people is getting worse;

2 Creditors are blacklisting and taking legal action more aggressively;

3 Check your credit report, there is a very good chance that it contains incorrect information;

What we recommend -

If you are in arrears on your account payments, ACT NOW – before you lose more money, your assets and the resultant stress causes disharmony in your home.

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