“I recently applied for a loan only to realise that I have been blacklisted by a service provider. How can they  blacklist me if I did not give them permission to do so and after I raised a dispute regarding the account?”

The first question that one must answer is what is blacklisting, specifically relating to credit blacklisting.

Credit blacklisting occurs when individuals or businesses have a poor credit history, such as defaulting on loan or credit card repayments. Credit providers such as banks and micro credit providers use the various credit bureaus to assess an individual’s credit rating in order to establish the risk involved in providing finances to the individual.

Logic then follows that if your credit rating or score at these credit bureaus is negative, the credit providers will be hesitant to approve your application for a loan and refuse your application or in some instances only approve your application to some extent in order to minimalize the risk.

The second question to answer is when can you be blacklisted? You can be blacklisted if you transgress one of the following:

• Missing payments on credit accounts
• Defaulting on loans
• Receiving court judgements for unpaid debt
• Failing to pay utility bills
• Failing to pay tax bills
• A history of late- or non-payments (on credit accounts)
• Applying for too much credit at once
• Having a high level of outstanding debt
• A history of returned payments
• Any fraudulent activity
• Failing to honour a debt restructuring or payment plan arrangement with a creditor.

Normally credit providers can proceed with the blacklisting within 7 (seven) days from the date on which the payment was due, but in more cases than not, each credit provider will blacklist you as and when they choose.

The third question one must then answer is, how long does this blacklisting last?

In South Africa, negative information can remain on an individual’s credit report for up to five years, which means that a person can potentially stay blacklisted for this duration. Furthermore, if the ‘blacklisted’ individual doesn’t improve their credit behaviour (or credit score), they could remain ‘blacklisted’ indefinitely.

The duration of ‘blacklisting’ boils down to a couple of things:

• The type of information that was reported.
•  Specific credit bureau policies.
• The individual’s ongoing credit behaviour.

Then the last question is, what can you do if you have been blacklisted incorrectly?

You, as individual have rights which are protected by the National Credit Act, which provide individuals with certain rights and protections when it comes to credit blacklisting.

These rights include the right to have access to their credit records and challenge any incorrect or outdated information. I you believe that you have been unjustly blacklisted, you can lodge a dispute with the credit bureau and request that the information be corrected or removed.

The credit bureau is then obligated to investigate the dispute and provide a response within a specified timeframe.

We have found that service providers and credit providers utilise blacklisting to force a consumer to settle prescribed debt, instead of following the more expensive option which is to institute legal action against the consumer.

As indicated herein above it is important to approach a debt collection specialist attorney to assist you with this issue as prescription of old debt, as same is not payable and therefore the blacklisting is unlawful.