Unfair blacklisting occurs when credit bureaus fail to follow the correct process in compiling default data on a consumer's profile. A bad credit record – or as people commonly refer to as being ‘blacklisted’ – can have many negative effects, like being denied credit or loans, being unable to secure rentals or being denied certain job opportunities, as a person’s credit score is often thoroughly assessed by financial institutions, landlords and employers. It may be that even though you have paid off a debt, it is still being unfairly listed against your name, as there is a lack of transparency, accountability, and fairness in this process. Scorpion Legal Protection shares how the law protects consumers from unfair blacklisting, as well as what steps you can take when lodging a complaint to the Credit Ombud.

The National Credit Act and unfair blacklisting

The National Credit Act offers protection to consumers against unfair blacklisting by setting out specific rules and regulations that debt collectors and credit bureaus need to follow to ensure that blacklisting is carried out in a fair and transparent manner.

One crucial protection for consumers is the requirement for debt collectors to provide written notice before listing a consumer on a credit bureau database.

This notice must contain:

• Details of the debt
• The credit provider's contact information
• Information on the consumer's rights, including how to dispute the listing if necessary.

If the debt collector fails to provide this notice, the listing may be deemed unfair and removed.

How to Report Unfair Blacklisting

Consumers have the right to report credit disputes to the Credit Ombud, which handles two main types of complaints: credit agreement complaints and credit bureau complaints.

Here's a step-by-step guide on lodging a complaint for unfair blacklisting:

• Step 1: Attempt to resolve the complaint directly with the credit/service provider or debt collector involved.
• Step 2: If you are unable to resolve the complaint as in step 1, you will need to lodge a complaint with the credit bureau and get a reference number.
• Step 3: If you are unhappy, or don’t get a response from the credit bureau within 20 working days, escalate the complaint to the Credit Ombud, providing the reference number you received from the credit bureau.
• The Ombudsman will then conduct an investigation into the matter.

Stay Informed: Check Your Credit Report Regularly

Many consumers don’t realise they have been blacklisted until they try to apply for new credit. Therefore, it is crucial to check your credit report frequently. Scorpion Legal Protection’s Specialist Personal Finance Department knows how to assist members with such matters and frequently gets successful outcomes for members with debt-related issues. Not a member yet? Click here to make sure you’ve got legal help and protection when you need it.

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*This is only basic legal advice and cannot be relied on solely. The information is correct at the time of being sent to publishing.