1. Nicky Lala Mohan Credit Ombud
Presentation to the Select Committee on Finance National Council of Provinces (NCOP)
14 February 2017

2. Agenda Mission Statement and Values
Introduction to the Office of the Credit Ombud
Background & What we do
Statistics
Complaint Trends
What are the challenges for consumers
Areas of greatest concern & how should industry address these issues

3. Mission Statement and Values
The Credit Ombud Will:
Effectively resolve disputes between members of the credit industry and credit receivers (consumers and businesses) with regard to credit and credit information matters.
Act as an educator of the public in matters pertaining to the credit industry.
At all times act honestly, independently and fairly; balancing the rights of all parties.

4. Mission Statement and Values
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 influence us.
Honest
We will openly deal with any issues brought before us, asking the relevant questions and communicating clearly and transparently.

5. Introduction to the Office of the Credit Ombud
Voluntary association of members to provide independent, fair, fast and cost effective dispute resolution
It is an alternative to the Courts
It is NOT a formal, legalistic approach
Free to consumers
Constitution and Terms of Reference
Accountable to an Independent Council
Quarterly Council meetings as well as Council subcommittee meetings for HR; Finance, Risk and Compliance and Corporate Governance

6. CO Council Consumer Bodies Woman's National Coalition
SA National Consumer Union
Black Sash
Independent Members
Siva Naidoo – Consumer Activist
Tefo Raditapole - Attorney
Thuli Zungu - Journalist
Patricia McCracken - Journalist
Hassen Lorgat – Consumer Activist
Credit Constituency
Banking Association
Consumer Goods Council
South African Credit and Risk Reporting Association
National Clothing Retail Federation
Motor Vehicle Finance Association
Micro Finance South Africa
Credit Bureau Association
Non Bank Large Lenders Association

7. Background of the CO & What we do
The Credit Ombud is a “Ombud with Jurisdiction” in terms of the Financial Services Ombud Schemes Act
The Credit Ombud is a registered Public Benefit Organisation with SARS
Credit information operations started in 2004 focusing only on credit bureau information disputes. Since 2012 we also accept non-bank credit complaints.
We also act as an educator of the public in matters pertaining to the credit industry

8. Terms of Reference & Jurisdiction
At the CO’s sole discretion to determine whether complaint falls within its jurisdiction
Act independently and objectively
Have regard to fairness, justice and equity
Balance the rights of consumers on the one hand and the rights of subscribing members on the other hand
Members are bound by decisions
Consumers are not bound by decisions and can take further legal action or report to NCR (Regulator)

9. Summary of Statistics - 2016
Complaints &
Enquiries
14 343
Calls to Call Centre
32 095
Disputes Opened
4 123
Amounts Saved
For consumers
R 10.6 million
Media Equivalent
Advertising Value
R 25.1 million
Average days
to close
52.47 days

10. Complaint Trends
Issues around statements of account, e.g. incorrect/disputed balances, payments not reflecting, disagreements over interest charges;
Incorrect information reflecting on credit bureaus;
Service issues e.g. copies of documents, paid-up letters;
Emolument attachment orders- issues include consumers unable to obtain statements of account, balances, overcharging of interest (in duplum) and NB non-compliance with procedural requirements;
Prescribed debt.

11. Challenges/Areas of concern & how to address same
Too many consumers do not know:
Their rights in relation to credit agreements
Where to turn when they experience financial difficulties
How to budget or handle their financial affairs to their benefit
The legal implications of the contracts that they sign
Co-ordinated financial education for consumers from a young age
Better information and explanations provided at time of contracting
Ongoing communication & building relationships with clients so that they know where to turn when in trouble

12. How to address the problems
More should be done to assist consumers with historical debt problems to rehabilitate themselves,
More education to assist all consumers to become financially independent e.g.
Assisting consumers to save/invest rather than using credit
Financial education
General financial counselling for consumers in need
Appropriate and affordable debt consolidation
Affordable settlements on accounts in debt collection
Efforts to curb the escalation of a debt due to high interest and legal fees

13. Thank you