Account of activities for the period January 2009 – December 2009

Metamorphosis

is the key

to unlocking

our potential

Our Mission

The Credit Information Ombud will:

• Effectively resolve disputes between members of the credit information industry (credit grantors and credit bureaux) and credit receivers (consumers and businesses) in terms of credit information.

• Act as an educator to the public in matters pertaining to the credit information industry.

• Act honestly, independently and fairly; balancing the rights of both credit receivers and credit grantors.

All matters will be treated in confi dence.

Our Values

The values of the Credit Information Ombud are not negotiable and cannot be diminished in any way.

• Fair: We will act in the best interests of all parties, taking both sides into consideration and considering the merits of each case carefully.

• Independent: We will not take sides and will remain impartial at all times. No individual or organisation will be in a position to unduly infl uence us.

• Honest: We will openly deal with any issue put before us, asking the relevant questions and communicating clearly and transparently.

• Confi dential: Everything that we do will be kept in the strictest confi dence and will not be disclosed to another party without permission.

Mission andValues

- Page 1

An

nu

al R

epo

rt 2

009

Page 2 -

Transformation

In business, as in life, change is the only constant. Without change, life itself would be impossible.

The forces that determine change can work extremely slowly, over aeons, to change galaxies, continents, systems. This change can be profound, as those studying the effects of man on our planet know only too well.

Change, however, can also be sudden, inspired, and miraculous. A butterfl y emerges from a chrysalis. Pigment and canvas become a work of art. Drops of rain transform a parched desert into a riot of colour and vegetation.

Since its inception, the Credit Information Ombud has changed the lives of countless individuals. Few can doubt the profound effect the resolution of a debt issue or the removal of a negative listing by the credit bureaux can have on the parties concerned. The letters of appreciation in this report bear testament to the gratitude of some of the benefi ciaries.

Now the Credit Information Ombud itself has been transformed. The fl edgling agency that specialised in transforming the face of the credit industry has become the Credit Ombud.

New challenges, new solutions, a new future. The transformation continues.

- Page 3

Mission and Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Chairperson’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Our Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Report of the Ombud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Credit Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Easy access for fi nancial consumer complaints. . . . . . . . . . . . . . . . . . 11

Centralised Helpline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Money Advice Association trading as Imali Matters. . . . . . . . . . . . . . 11

The International Network of Financial Services Ombudsman (INFO). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Key Figures at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Consumer Awareness and Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Letters of Appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Other Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

In Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Contents

Page 4 -

Nicky Lala-MohanChairperson

- Page 5

Chairperson,s Report

The year under review was probably the most challenging one yet for the Credit Information Ombud (CIO). The extension of its mandate to not only deal with dispute resolution relating to credit information per se, but to also include dispute resolution for credit matters for non-banking credit providers (credit matters that require dispute resolution for banks that extend credit are dealt with exclusively by the Ombudsman for Banking Services) meant that many changes were required to take on the additional task.

The Credit Information Ombud changed its name to the Credit Ombud, encompassing both credit information and general consumer credit. The Terms of Reference and its funding model required changes as well as regulatory approval from the Financial Services Ombud Schemes Council in terms of the Financial Services Ombuds Scheme Act, 2005 (FSOS). Additional qualifi ed staff had to be recruited and a new Council had to be constituted.

I am happy to report that all of that has been successfully done and offi cial accreditation of the scheme was granted by the Financial Services Ombud Scheme’s Council in terms of FSOS.

The extension of the mandate to deal with credit matters is a very important step for the Credit Ombud and non-banking credit consumers at large. Those consumers can now lodge their credit-related complaints free of charge to the offi ce of the Credit Ombud, who will resolve their dispute fairly, independently and confi dentially. The National Credit Act provides the framework and ambit within which credit-related complaints will be resolved. Its jurisdiction includes instances where a consumer has been unfairly treated by a credit provider or has been subject to unconscionable behaviour by a credit provider.

Credit information matters are resolved by the Offi ce within a period of 47 days. This is very commendable in the light of the international norm of 60 days. The dispute resolution methodology for credit information is settled and well entrenched. The goal of the offi ce is to set the same standards in relation to resolving credit-related disputes, a challenge I believe the offi ce is capable of handling.

The extension of mandate also meant a restructuring of the Council. A special welcome to all the new Council appointees. The newly constituted Council is vibrant and well represented in terms of stakeholder interests. I am particularly pleased with the consumer bodies’ representation and independent members that play a meaningful role. To the Council as a whole, a big thank you for having the faith in me and reappointing me as Chair of the new Council, and also for their guidance and unwavering support.

It is with sadness that I have to report the death of one of our founding Council members, Bill Lacey. Bill, who represented the South African Chamber of Commerce and Industry (SACCI), passed away in June 2009 after a long illness. May he rest in peace.

As is statutorily required, I confi rm that the Credit Information Ombud complies with section 10(1)(b)(ii) of Financial Services Ombud Schemes Act 2005 in that there is constant monitoring for compliance of the scheme and ensuring adherence to the requirements of the FSOS Act.

A special word of gratitude to the Ombud and his staff. The challenge lies ahead, but it is certainly not insurmountable.

NICKY LALA-MOHAN

Page 6 -

The offi ce of the Credit Information Ombud is an independent and impartial body that reports to the CIO Council and not to the credit industry. The Council consists of four (4) constituencies: consumer bodies, the credit-granting industry, the credit bureau industry and business representatives on the Council:

Our Stakeholders

2009

Consumer Bodies

Credit Granting Industry

Credit Bureau Industry

Business

Legal Resource Centre (LRC) Achmed Mayet

Credit Providers AssociationGavin Long

TransunionPaul Hutton

Black Management Forum (BMF)Kganki Matabane

Consumer ActivistSiva Naidoo

Micro Finance South Africa (MFSA)Dave de Beer

Experian Kim Jenkins

South African Chamber of Commerce & Industry (SACCI)

Bill Lacey

Women’s National CoalitionLaura Kganyago

The Banking AssociationNicky Lala-Mohan

Credit Bureau Association (CBA)Ramesh Pillay

Afrikaanse Handelsinstituut (AHI)Dr Tjaart van der Walt

- Page 7

A new beginning

In 2010, the Credit Information Ombud was transformed into the Credit Ombud, which has an extended mandate and is constituted slightly differently. In future, the Credit Ombud will operate with stakeholders and representatives as set out below.

2010

Consumer Bodies

Credit Industry

Independent members

Black SashThandiwe Zulu

Banking AssociationNicky Lala-Mohan

National Clothing Retail Federation

Michael Lawrence

Siva Naidoo

South African National Consumer UnionLillibeth Moolman

Furniture Traders AssociationPhilip Kruger

Motor Vehicle Finance AssociationChristo Otto

Dr Tjaart van der Walt

Women’s National CoalitionLaura Kganyago

Credit Providers Association Gavin Long

Micro Finance South AfricaDave de Beer

Credit Bureau AssociationRamesh Pillay

Tefo Raditapole Magauta Mphahlele Thuli Zungu

Credit Ombud Council

The offi ce of the Credit Ombud is an independent and impartial body that reports to the CO Council and not to the credit industry. The council consists of three (3) constituencies: consumer bodies, the credit industry, and independent members of the Council:

Page 8 -

Report of the OmbudIntroduction

Transformation is the tool to remain relevant. It is the process of realigning oneself with current needs and opportunities. The ability of reinventing ourselves is not always easy, as it takes us out of our comfort zones, but in order to grow as a person or as an organisation, we need to face up to the challenges, overcome them, and by doing this, ensure that we remain relevant to face up to ever changing circumstances.

This is exactly what the credit industry, together with the Credit Information Ombud, did when we responded to the Finmark Trust research report, which concluded that there was a lacuna in the non-bank credit industry in terms of alternative dispute resolution within this industry.

Finmark Trust, an organisation well known for its interest in making fi nancial markets work for the poor, engaged in research on the landscape for consumer recourse in the fi nancial services sector of South Africa.

The fi ndings of the report were that there was no independent Alternative Dispute Resolution (ADR) or Ombud for complaints or problems related to non-bank credit. Non-bank credit can be defi ned as credit provided by institutions registered with the NCR for the purposes of supplying credit to consumers (excluding licensed banks). This could include furniture retail, clothing retail, non-bank vehicle fi nance and microlenders.

This report prompted the CIO and the credit industry to investigate the possibility to overcome the lacuna that existed in the market. After extensive consultation with all stakeholders, the decision was made to expand the jurisdiction of the Credit Information Ombud to become the Credit Ombud. The CIO applied to the Financial Services Ombud Schemes Council (FSOS) in terms of the FSOS Act 2005 for approval of the changes to the Jurisdiction and Terms of Reference of the offi ce. The FSOS Council duly approved the changes.

The Credit Ombud will in future manage disputes in terms of credit information as well as disputes in terms of non-bank credit transactions as defi ned above. Please refer to our website at www.creditombud.org.za to view the new Jurisdiction as well as the new Terms of Reference.

Credit information

2009 will be remembered as one of the most diffi cult years in recent history in terms of economic activity in South Africa, which saw the country joining the global recession for the fi rst time in 17 years. Many consumers were faced with hardship, which had an impact on their ability to repay their debt.

The National Credit Regulator published the 2009 Credit Bureau Monitor, which illustrates the information held on registered credit bureaux. The monitor is a reliable tool to ascertain the ability of the country’s credit active population to repay their debt.

In December 2009 there were 18,07 million credit active consumers in the country and 45,3% of that population had impaired credit records. Consumers have an impaired record if any of their accounts is classifi ed as three or more payments in arrears or has an “adverse listing”, or if they have a judgment or administration order against their names. This fi gure is concerning, and it means that 8,18 million people will have diffi culty in accessing fi nance. This fi gure increased by nearly 34% from June 2007 to December 2009.

- Page 9

Manie van SchalkwykOmbud

Page 10 -

on behalf of the Financial Services Ombud Schemes Council requested all ombud schemes to work together in making this initiative a reality.

With all the fi nancial ombudsmen and regulators on board, this helpline will serve as a single entry point for all fi nancial complaints, and this will eliminate any confusion with consumers regarding which organisation to contact when wanting to complain, as there will be only one telephone number for all fi nancial ombudsmen and regulators.

Money Advice Association trading as Imali Matters

The creation of a centralised helpline is one initiative that can assist consumers to have easier access to ombud structures. In a country where a vast number of consumers did not have access to formal education and have literacy challenges, it is necessary to make the ombud schemes available to the community. Consumers should be assisted in their home language and be able to rely on somebody to read and write on their behalf.

The CIO has engaged in a project with the Department of Trade and Industry, Finmark Trust and African Bank to investigate the viability of establishing offi ces in the community where consumers will receive independent, face-to-face guidance in terms of fi nancial matters. An association was formed with the above parties known as the Money Advice Association. The offi ces are called “Imali Matters”, loosely translated as “Money Matters”. These offi ces will not only assist consumers with independent, face-to-face guidance in fi nancial matters, but will also double up as a centralised offi ce where consumers can lodge fi nancial complaints. Staff in these offi ces could assist consumers in taking down complaints and forward these complaints to the relevant ombud or regulator’s offi ce.

Against this background it is imperative for this offi ce to reach out to consumers and assist those who have been incorrectly or unfairly listed on a credit bureau. Furthermore it has become equally important to assist those consumers who are not necessarily listed on the credit bureaux to resolve their disputes with non-bank credit providers through the expanded jurisdiction of the CIO.

The theme for our annual report for 2009 is “Transformation”, as I feel it is fi tting in the current environment that the offi ce and the industry is facing to reinvent ourselves to serve consumers in resolving their disputes not only in terms of credit information, but also in terms of non-bank credit transactions.

Easy access for fi nancial consumer complaints

Centralised helpline

The Credit Information Ombud, the Ombudsman for Banking Services and the Long-term Insurance Ombud have successfully implemented a centralised helpline to assist consumers in eliminating any confusion regarding which offi ce to contact when wanting to complain. This helpline is manned by operators who assist prospective complainants by directing their complaints to the correct offi ce.

Consumers welcomed this initiative and the helpline managed up to 2 900 calls per month. Unfortunately the service provider failed to provide a professional service and we had no choice but to cancel our contract with them. Subsequent to this the National Credit Regulator, the Financial Services Board and other ombud structures have indicated their willingness to join the initiative. In fact, the Financial Services Board

- Page 11

The staff at the Credit Information Ombud’s offi ce.

Standing, from left to right: Jacob Sefure (Call Centre Agent), Caroline Buthelezi (Public Relations Offi cer), Daisy Guntert (Call Centre Agent), Harsha Naran (Case Manager), Buti Magagula (Case Administrator), Reana Steyn (Senior Case Manager-Legal), Cynthia Matshiakgotshi (Senior Case Manager), Lucy Mokhweba (General Administrative Assistant), Amanda Erasmus (Operations Manager).

Seated, from left to right: Magda van Biljon (Case Administrator Supervisor), Janine Abrahams (Case Administrator), Manie van Schalkwyk (Ombudsman), Bets Noordman (Personal Assistant and Bookkeeper), Kabelo Teme (Receptionist), Anthony Mpyatona (Case Administrator).

The project team will be rolling out 3 offi ces to test the concept for one year to establish the viability of such an initiative. One offi ce will be linked to an NGO in the Western Cape, an offi ce in Gauteng will be linked to a Provincial Consumer Affairs offi ce and there will be one independent offi ce in Durban.

We have received funding from the Financial Education Fund (FEF) and African Bank to roll out this initiative, and at the time of fi nalising this report we have opened offi ces in Cape Town and Gauteng.

Once this initiative proves to be successful, the Money Advice Association will have to evaluate how this concept can be rolled out to the rest of the country.

The International Network of Financial Services Ombudsman (INFO)

The International Network of Financial Services Ombudsman (INFO) is a network created by fi nancial ombudsmen on a global basis to network and share experiences within the industry. Experience has shown that ombud offi ces around the world deal with similar challenges, thus this forum creates an opportunity to learn from different ombud offi ces around the world. Every year the members of INFO gather at an international venue for a conference. The 2009 conference in Dublin was well balanced and attended by delegates from 26 countries.

The 2010 conference will be hosted in Cape Town, South Africa from 28 to 30 September 2010, and interested parties can register for this conference at the conference website at www.info2010.org.za.

Appreciation

I would like to record my sincere appreciation to the Chairperson, Nicky Lala-Mohan, the CIO Council and the staff of the CIO for their dedication, hard work and positive attitude during the past year. Their unqualifi ed support ensured that the CIO could serve our complainants effectively and impart our knowledge to consumers to manage their credit profi les more effectively.

Manie Van SchalkwykOMBUD

Info 2010 presentation CD

Page 12 -

Key Figures at a

Glance

Disputes recorded at credit bureaux:

Calls received by the CIO call centre:

Cases opened by the CIO:

Cases closed by the CIO:

General enquiries received:

Average days to resolve a dispute:

Percentage of disputes resolved in favour of consumers:

Media Equivalent Advertising Value:

Community workshops:

Cost per dispute:

52 18824 1991 586

1 486, which equates to 2 745 disputes

13 83047

65%R13 022 107

47R1 970

- Page 13

Consumer awareness

and EducationSince its inception, the offi ce has continued to create awareness of its existence and educate consumers in credit information matters.

In 2009 we enjoyed a highly successful year by making consumers aware of our existence through the media as well as outreach activities, working with provincial consumer affairs sections, NGOs and other community-based organisations.

We further received a generous travel sponsorship from the Credit Bureau Association that enabled us to participate in consumer workshops covering 6 provinces. We participated in 47 outreach activities or workshops. The main objective is to provide credit information education and reach consumers of all provinces in the country.

Our outreach activities alone could never amass the level of awareness and consumer education we currently enjoy and aim for. The media has been instrumental in enabling us to carry our message to consumers countrywide. Our participation in print and electronic media keeps growing every year. The year 2009 saw our offi ce reach the EAV (Equivalent Advertising Values) of over R13 million, which is the highest fi gure this offi ce has ever achieved. This is a signifi cant increase of 40,5% compared to 2008.

We participated in 60 electronic media interviews on 24 different radio and television stations and featured 141 articles in the print media in 59 different newspapers and magazines. Educational press releases are written by us and sent to the media constantly. These press releases also generate radio and television interviews, which in turn increases our exposure and awareness to the public.

C

Caroline Buthelezi Public Relations Offi cer

Page 14 -

Letters of

Appreciation

“I never imagined that one day exactly a year later, I would be thanking someone for the job well done regarding this unfortunate incident of mine. Cynthia, me and my family take this moment to say thank you for your selfl ess and dedicated service to help us with this enormous hardship that was placed on us. Boy oh boy, you provided unrivalled fi rst-class service, a service beyond reproach. I wish there were lots of you in this country. I cannot thank you enough. I would like your management to know that you are a rare gem indeed, a star. Thank you, I am going to recommend your services to everybody.”

“Dear Cynthia! I thank you very much for assisting me so effi ciently and professionally in the way you did. I didn’t expect it to be so quick. I can honestly say I can inform anyone, including the media, what a great job you guys are doing. It’s unbelievable, considering the fact that your service is free!”

“I would like to express my most sincere gratitude for your effi cient service. The Credit Ombud has done an outstanding job in removing my name from… (credit bureau) after being sent from pillar to post. I just wanted to thank you for the… excellent service that I have received from you guys. I have struggled and failed to get a fair and reasonable response from… (credit bureau). If you were not there to help, I would have struggled to get my name cleared, thus I wanted to thank you for what you have done.”

Letters edited

“Thank you so much for your impeccable service and communication concerning the judgement against me. Your persistence in pursuing the matter until it was resolved was inspirational and I started to lose hope that matter would never be resolved. I can’t put into words what a difference you have made in restoring my faith in the system which I started to doubt.”

“Once again I would like to thank you very much for the outstanding service and work you did for me. I wish you could do the same to others who have serious problems like these. I can’t say how happy I am and how thankful I am. Thank you very much for everything. You dedicated your time to make sure that the matter is resolved without any compensation. Thank you, thank you, thank you!”

“It is with such great pleasure that I am sending you this email today. In a time where one does not get any service and no one cares about their jobs and only does the bare minimum if they have to, I have had the greatest experience in dealing with Janine Abrahams.

I had a complaint regarding my credit profi le and this lady immediately tended to it. Not only did she do her job, but she also kept me up to date of what was happening regarding the query.

It is with a smile on my face and a very thankful heart that I would like to bring this to your attention. This lady rocks. Thanks, Janine, for doing your job… and doing it with such style and class.”

“I would like to take the opportunity to thank all at the Credit Ombud for their assistance and speedy reaction to my request. From my fi rst call on I was treated with respect and understanding of my dilemma.”

“Please accept my greatest appreciation regarding my dispute with... (credit provider). You were so professional and willing to help me throughout. This matter has been dragging since January, but you worked it like a pro, relaxed and I must say, you are a professional and I really value your service. I am so glad that the Ombudsman does look at the reality and this is what we really need from other companies. You did a great job and well done. If all the cases are going smoothly like this one, then I must say you are there to help people and not judge them. Thank you so much, Mr Buti Magagula, thank you, have a blessed and successful life because you must know that you made someone happy here.”

“Thank you from the bottom of my heart for your kind and effective assistance in this matter. I would also love to thank those that assisted you in this “project”. I notice that you went over and above the call of duty and sorted out a problem that I would never have been aware of otherwise, i.e. the duplication of information by… (bank). You are the kind of person that continually restores people’s faith in the customer service industry. I appreciate this greatly, as my life has been stuck because of this and I felt done wrong as I have worked very hard over the past 2 years to rehabilitate my fi nances. May God bless you.”

- Page 15

The CIO contact centre assists credit receivers in taking down their complaints telephonically, explaining the CIO dispute resolution process to the public if they do not have a valid reference number from a credit bureau, and by addressing general enquiries that consumers may have in terms of the credit information industry.

In total, 24 199 telephone calls were recorded by the CIO call centre for the period January 2009 to December 2009.

This is an average of 2 016 telephone calls per month.

This fi gure decreased from 27 999 in 2008, thus a decrease of 13,6%.

The decrease in telephone calls received by the call centre is a result of the termination of the services of the external call centre.

2008 2009 Total 24 199

Table 2: Number of calls received at call centre

3 500

3 000

2 500

2 000

1 500

1 000

500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2 19

3

1 96

0

1 75

1

2 21

5

1 71

9

2 41

8

1 78

7

2 19

8

1 85

2

1 61

8

2 02

5

2 42

4

2 46

2 2 63

1

2 72

3

2 21

6

2 69

0

1 98

6

3 36

7

1 68

6

2 35

1

1 62

0

3 07

9

1 22

7

As the fi rst step in the CIO process, credit receivers disputing information on their credit profi le need to contact a credit bureau and make the credit bureau aware of the dispute. In total, 52 188 disputes were recorded by the credit bureaux for the period January 2009 to December 2009.

This is an average of 4 349 disputes per month.

This fi gure decreased from 53 964 in 2008, thus a decrease of 3,3%.

The credit bureaux successfully resolved 97,1% of the complaints and the balance of 2,8% was escalated to this offi ce.

2008 2009 Total 52 188

Table 1: Disputes received by credit bureaux

8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

6 69

6

3 65

3

4 60

8

2 40

6

4 68

9

5 57

4

3 72

0

2 77

9

4 40

0

6 05

3

4 64

8

4 34

8 4 51

1

5 29

5

3 07

2

3 98

9

4 47

0

5 51

1

4 40

8

4 42

9

4 16

0

2 96

9

4 58

2

5 18

2

Statistics

Page 16 -

In total, 1 586 cases were opened by the CIO offi ce for the period January 2009 to December 2009.

This is an average of 132 cases per month.

This fi gure increased from 1 411 in 2008, thus an increase of 12,4%.

2008 2009 Total 1 586

Table 3: Cases opened by the CIO

180

160

140

120

100

80

60

40

20

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

144

104

92

112

92

130

75

95

104

153

123

163

142

143

109

166

136

164

145

128

149

138

100

90

2009 Total 1 486

Table 4: Cases closed by the CIO

200

180

160

140

120

100

80

60

40

20

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

106

74

135

88

118

181

148 14

9

134

99

157

97

2009 Total 2 745

Table 5: Disputes closed by the CIO

400

350

300

250

200

150

100

50

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

171

124

279

188 19

3

299

240

273

236

202

352

188

In total, 1 486 cases were closed by the CIO offi ce for the period January 2009 to December 2009.

This is an average of 124 cases per month.

It must be explained that when a consumer lodges a com-plaint with CIO, we discuss all sections of the credit profi le with the consumer and do not focus solely on the com-plaint itself. The reason for this is that the credit profi les are complex and consumers do not necessarily understand all the data elements that are displayed on the credit profi le. When consumers understand the data better, usually more disputes arise in terms of the accuracy of the data on the credit profi le, and the CIO may see fi t to investigate these disputes as well. This results in more than one dispute for every complaint that has been lodged with the CIO. Each subsection (or dispute) in a case should be seen as a sepa-rate case, as the case worker needs to follow a complete dispute process for each subsection of a case. Previously we only reported on the number of cases opened by the CIO. We will now report on the number of cases closed as well as the number of subsections closed.

Although the CIO closed 1 486 cases for 2009, this fi gure represents 2 745 disputes. This is an average of 1,9 disputes per case. The importance of report-ing this statistic is that it has an impact on the productivity of the staff and has a direct impact on the cost per case.

- Page 17

The CIO receives general enquiries from the public in the form of telephone calls, letters, faxes and e-mails. These general enquires vary in the type of information on which consumers need clarifi cation, and the volume of general enquiries relates directly to media exposure received by the CIO.

In total, 13 830 general enquiries were recorded by the CIO call centre for the period January 2009 to December 2009.

This is an average of 1 153 general enquiries per month.

This fi gure increased from 9 562 in 2008, thus an increase of 44,6%.

The main reason for this increase is more effective capturing of the general enquiries.

2008 2009 Total 13 830

Table 6: General enquiries logged at the CIO

1 600

1 400

1 200

1 000

800

600

400

200

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

586

1 04

1

749

1 28

1

818

1 22

7

912 95

3

817

1 26

2

969

1 25

3

902

1 47

8

871

1 37

2

807

1 21

5

848

1 12

8

743

999

540

621

The CIO has categorised the general enquiries in order to understand where the most pressing issues are for consumers and how to direct our education in the media in an attempt to answer these questions for consumers.

The three main categories are:Most consumers contact us to request their credit profi les. As this function is not offered within the CIO and as a result of the high call volumes received from consumers requesting their credit profi les, we included a message to direct consumers to the credit bureaux on the interactive voice recording system. This will hopefully reduce the number of calls and free up the call centre staff to direct their efforts more productively.

Consumers also contact us for information regarding defaults and judgments, and to complain about the bad service levels that credit bureaux provide. We use this information to focus our media outreach in an attempt to answer some of the questions.

A signifi cant number of consumers contact us to complain about the service delivery of credit bureaux. The CIO refers these complaints directly to the credit bureau concerned.

Table 7: Types of general enquiries received

A

QPONMKJ

IH

G

F

E

D

C

B

L

32,14%

19,69%

15,57%

6,40%

6,32%

0,93%

4,72%

3,61%

3,12%

1,26%

0,91%

0,16%0,97%

1,77%1,39%

0,87%0,16%

A - Consumer requesting credit profi leB - Default listingC - Judgment D - Complaint against credit bureau E - Web general enquiry received F - Administration G - CIO case progress H - Complaint against credit grantorI - Credit application declined - score

J - Identity theft K - Enquiry L - Complaint against debt counsellor M - Debt counsellingN - GarnisheeO - Payment profi leP - Explaining prescription of debtQ - Sequestration

Page 18 -

Categories of jurisdictionA In these cases the CIO offi ce has not ruled in favour of a complainant – 26,81%B The negative credit information listed on a credit receiver’s credit profi le is displayed on a credit bureau for a longer period than is dictated by the National Credit Act – 26,58%C There is insuffi cient or incomplete credit information listed on the credit receiver’s credit profi le – 17,63%D The subscriber to the credit bureau supplied inaccurate information to the credit bureau – 6,83%E The complainant has withdrawn the case. This usually happens if complainants fail to respond to requests for information or a respondent’s version of the case. Complainants receive numerous requests from the CIO offi ce to respond before we assume that a complainant does not want to proceed with the case – 5,38%F The credit receiver has been listed more than once in terms of the same debt – 3,21%G Disputes as a result of Section 73 of the NCA where consumers qualifi ed for early removal of information – 2,89%H Inaccurate or incorrect default credit information is listed on the credit receiver’s credit profi le – 2,71% I A credit receiver has been listed on a credit bureau due to a fraudulent transaction – 2,44%J These cases fall outside the jurisdiction of the CIO offi ce – 2,35%K The debt has prescribed – 1,54%L The subscriber to the credit bureaux did not inform the consumer that they would be listing him/her adversely on the credit bureaux – 1,54%M A credit receiver has been listed on a credit bureau due to a service-related dispute with a credit grantor and the dispute has been resolved between the parties – 0,09%N The consumer defaulted on the debt through no fault of his or her own, and has subsequently rehabilitated himself/herself; this is typically where a consumer has defaulted as a result of retrenchment or any circumstances that the person could not control – 0,00%

Explanation of areas where there was a signifi cant movement year on year on the statistics.

Section B - The negative credit information listed on a credit receiver’s credit profi le is displayed on a credit bureau for a longer period than is dictated by the National Credit Act – 26,58%. The major problem in this section is rescinded judgments and rehabilitated administration orders which are not captured by the credit bureaux, thus the judgment and administration order which should be removed, remains on the credit bureaux for a longer period than the information should be retained. This factor can be contributed to the signifi cant increase in fraud with rescission orders. As a result of the credit bureaux’s extensive research to validate the documents, the time to investigate will extend the 20-day period and consumers apply to the CIO for assistance.

Section C - Insuffi cient or incomplete credit information is listed on the credit receiver’s credit profi le – 17,63%. In this section the problem is that credit providers do not update the monthly payment profi le or account history with the credit bureaux. In a signifi cant number of the cases, the payment profi le record will display that the account is still in arrears or that money is still owed to the credit provider, and the consumer has proved the contrary. The credit provider has 60 days to update the information with the credit bureaux. There is a signifi cant increase of incidents of this nature and the CIO would urge credit providers to be more diligent in updating the data on the credit bureaux. Unupdated data prejudices consumers and could result in consumers being declined for credit.

Section E - The complainant has withdrawn the case. This usually happens if complainants fail to respond to requests for information or a respondent’s version of the case. Complainants receive numerous requests from the CIO offi ce to respond before we assume that a complainant does not want to proceed with the case – 5,38%. There has been a signifi cant decline in consumers who withdraw complaints. This is as a result of more effort from the staff to remind consumers of the deadlines to provide information to the CIO.

Section G – Disputes as a result of Section 73 of the NCA where consumers qualifi ed for early removal of information – 2,89%. There has been a signifi cant decline of dispute in this section due to the cut-off period of this regulation in 2007, although there were some consumers in 2009 who still qualifi ed for this “amnesty”.

The CIO has ruled in favour of consumers in 65% of disputes and ruled in favour of the credit industry in 27% of the cases. The balance of the cases either fell outside the jurisdiction of the CIO offi ce or the complainants had withdrawn their cases.

Table 8: Percentage of resolved cases closed by jurisdiction(Figures in bold represent 2009 – Figures in brackets represent 2008)

D6,83%(8,93%)

E5,38%

(11,24%)

A26,81%(30,32)

B26,58%(15,46%)

C17,63%(7,75%)

F3,21%(3,29%)

G2.89%

(11,43%)

H2,71%(1,67%)

I2,44%(2,40%)

J2,35%(3,53%)

K1,54%(0,98%)

L1,54%(2,80%)

M0,09%(0,10%)

A

B

C

D

E

F

G

HI

J K L M

A - Invalid case B - Outdated credit information C - Insuffi cient or incomplete credit information D - Credit grantors did not supply accurate credit data E - Consumer withdrew complaint F - Double listing G - NCA regulations H - Inaccurate or insuffi cient credit information I - Fraud cases J - Outside jurisdiction K - Prescription of debt L - Credit receiver was not notifi ed of adverse listing M - Service dispute

- Page 19

Most cases (96,01%) are resolved through intervention from the CIO offi ce. An intervention constitutes where the CIO is able to remove information from the credit bureaux without extended deliberation with the supplier of the information or with the credit bureaux.

Facilitation between the parties constitutes a summary of the complainant’s case and the response of the credit grantor/subscriber to the credit bureaux. A credit receiver will provide a detailed complaint and will in turn be able to respond to the response of the credit grantor/subscriber to the credit bureaux.

The CIO will evaluate the facts and make a decision on the validity of the negative listing on the credit bureaux. 3,53% of the cases were resolved through facilitation.

Mediations are formal meetings between the complainant and representatives of the credit grantor/subscriber to the credit bureaux, with the Ombud as the mediator. The Ombud guides the debate between the parties until an agreed outcome is reached. The CIO resolved 0,07% of cases through mediation.

Recommendations are normally detailed reports to a credit grantor/subscriber to the credit bureaux explaining the reasons why the information on a credit receiver’s profi le should be removed. If a credit grantor/subscriber to credit bureaux is able to provide additional evidence to substantiate the reasons for listing the information, all new evidence will be considered and then incorporated in a ruling. 0,39% of cases were resolved through recommendations.

The CIO did not make any rulings in 2009, which is a very positive sign, as it demonstrates a willingness from credit providers and credit bureaux to resolve cases.

The increase of the percentage of cases being resolved through interventions is very positive, as it shows the commitment from credit providers and credit bureaux to resolve the cases without much reluctance.

All decisions of the CIO are binding on the credit bureaux and the subscribers to credit bureaux. If subscribers to credit bureaux fail to remove information from the credit bureaux, the CIO could instruct the credit bureaux to remove the information.

A Interventions

B Facilitations

C Recommendation

D Mediation

E Rulings

Table 9: Manner of fi nalisation(Figures in bold represent 2009 – Figures in brackets represent 2008)

A96,01%(83,95%)

B3,53%

(15,26%)

C0,39%(0,64%)

D0,07%(0,15%) E

0,00%(0,00%)

A

BC D E

Page 20 -

Other Statistics

Gender of complainants

The CIO does not capture gender on our application forms, but our call centre agents capture gender based on their subjective opinion.

Male – 81%Female – 19%

Race indicators of complainants

The CIO does not capture race on our application forms, but our call centre agents capture race based on their subjective opinion only for statistical reasons..

Black – 67%White – 26%Indian – 4%Coloured – 3%

Table 11: How did you hear about us? - 2009

A36,11%

L0,54%

M0,50%

N0,35% O

0,09% P0,09%

K0,6%

B21,49%

C13,08%

D9,35%

E6,11%

F5,10%

G2,14%

H1,70%

I1,49%

J1,28%

A

BC

D

E

F

G

H

IJ K L NM PO

In 2009 we concluded 79,48% of all cases within 60 days, compared to 77,48% in 2008.

20,52% of the cases were concluded within 61 to 120 days.

2008 2009

Table 10: Period from opening to closure of cases

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0% 0 - 60 days 61 - 120 days 121 - 180 days

77,4

8%

79,4

8%

17,5

7% 20,5

2%

4,95

%

0%

Complaints Population Credit granted

Table 12: Population statistics per province

42%

21%

46%50%

40%

30%

20%

10%

0%G

aute

ng

Wes

tern

Cap

e

KwaZ

ulu-

Nat

al

East

ern

Cap

e

Lim

popo

Mpu

mal

anga

Nor

th W

est

Nor

ther

n C

ape

Free

Sta

te

13%

11%

15%

1% 2% 2%

4%

11%

4% 4%

7%

4%

7%

14%

6%

10%

6%

4%

13%

21%

13%

5,%

7%

6%

With these statistics we measure the actual percentage of complaints compared to the population statistics of each province, as well as the percentage of credit that is approved in each province. This graph is signifi cant in terms of the awareness of the CIO offi ce in the province. What is clear from the statistics is that there is a closer correlation between the number of complaints and credit that has been granted in a province, than between the number of complaints and the population size.

A - Credit bureauB - Credit grantorC - MediaD - Word of mouthE - InternetF - Website G - AttorneyH - 1023 Telkom

I - NCRJ - OtherK - Educational talksL - Legal WiseM - BrochureN - CIO staff emailO - BillboardP - Scorpion - legal

- Page 21

With its expanded mandate, the Credit Ombud will continue to serve as the mediator between the credit industry and the individual in the pursuit of confl ict resolution. It will continue to do so professionally and ethically. And it will continue to maintain the highest standards of honesty and confi dentiality.

Above all, it will continue to transform lives for the better.

In conclusion

Page 22 -

Credit Information OmbudTel: +27 11 781 6431Fax: +27 11 388 2445

Call Centre: 0860 662 8370861 662 837

Email: ombud@creditombud.org.za

Postnet Suite # 444Private Bag X1, Jukskei Park, 2153

1st Floor, Silver Fern Building Fernridge Offi ce Park

5 Hunter Street c/o Bram Fischer RdFerndale, Randburg

www.creditombud.org.za