Credit blacklisting unlawful - Horn

Social commentators have slammed credit blacklisting, which has caught thousands of Namibians in a poverty trap and unable to obtain credit from financial institutions. This comes at a time when the Law Reform and Development Commission has embarked on scrutinising existing laws that inhibit development. Credit bureaus that blacklist people for considerable periods of time, such as Trans Union South Africa, also known as ITC, are a case in point. According to data provided by the Trans Union office in Namibia, in 2012, about 760 000 Namibians were reported to be living on credit, of whom about 152 000 had been blacklisted for failing to repay their debts. However, according to LRDC chairperson Yvonne Dausab, she is not aware of any “specific law or policy framework” that authorises the credit bureaus to blacklist people. Dausab said the LRDC is investigating this issue, especially incidents where people have paid off their debt but are still unable to get their creditworthiness restored. Professor Nico Horn also said there is no legal foundation in the country that allows this, adding that credit blacklisting is not only against the law in Namibia but also in South Africa. “It is totally against the Constitution. People must have the right to defend you. If they want to do it constitutionally they must serve summons on individuals and let the court decide,” Horn said. He added that people’s status in society is severely affected by this unlawful practice. Ombudsman John Walters echoed Horn’s sentiments, saying consumers find it almost impossible to get off the black list. “They will ask you to come with a letter from a lawyer but the lawyers are often not so forthcoming,” he said. According to him there are no control measures in place when reporting individuals for alleged bad debts. “Anyone with malicious intent can put you on that list, but a person needs an opportunity to dispute that and only if the court finds that I have defaulted can they put me on a blacklist,” said Walters. According to economist Dr Omu Kakujaha-Matundu, there is an urgent need for Namibia to develop legislation to protect consumers from unscrupulous lenders and even themselves. He added that the current system almost dooms consumers, leaving them with all the responsibility to prove their creditworthiness. “There is no recourse in our laws. You have now condemned the consumer almost into not accessing funds to acquire certain items or to pay for their children’s education,” he said. A credit bureau is an institution where consumer credit activities are monitored and recorded. ITC is the name that South African and Namibian consumers used to refer to a credit bureau because ITC for a long time was the only credit bureau operating in the countries. ITC which was eventually bought by an international American-based company called Transunion Credit Bureau. JEMIMA BEUKES