If you want access to credit, stay honest

Lying on your CV can have more serious consequences than a humiliating step down from public office. It constitutes fraud, and you can be listed on a database shared by credit providers. A listing for fraud will count against you when you apply for credit.

Carol McLoughlin, the executive director of the Southern African Fraud Prevention Service (SAFPS), says there are about 75 000 people on the SAFPS`s database for misdeeds ranging from forged qualifications, salary slips and bank statements to insurance fraud and identity theft. The names on SAFPS`s database include those of people who have become victims of identity fraud.

Listings on SAFPS`s database are posted there by SAFPS members -typically banks, loan providers (Bay-port, Capfin and Wonga), insurers, service providers (such as MTN) and clothing retailers. Another of its members is Managed Integrity Evaluation (MIE), a company that provides background screening services. The company, on behalf of, for example, a prospective employer, will check the validity of your qualifications, as well as your criminal record.

Once a listing in your name is loaded on to the SAFPS database, SAFPS will notify you of the listing in writing.

McLoughlin says the letter states that you have 14 days to query the listing with the member company that listed you, and once you formally dispute a listing with a member company, the matter must be resolved within 20 days.

Like a credit bureau, SAFPS does not investigate the listing, but its members are bound by a code of conduct to manage the integrity of the data. The onus is on the entity listing you to ensure that the information is accurate. But unlike a credit bureau, SAFPS members are not obliged to give you 20 days` notice of their intention to list you.

This provision in the National Credit Act (NCA), which applies to credit bureaus, is to give consumers the power to protect their names. But SAFPS is of the view that giving a 20-day notice period before listing someone who has committed fraud or attempted to commit fraud would open a window of opportunity for them to go from company to company committing - or trying to commit - more fraud.

SAFPS has been compelled by a High Court ruling to register with the National Credit Regulator as acredit bureau. But McLoughlin says the organisation does not operate like a regular credit bureau, because it does not store information relating to your payment profile or your credit history

SAFPS manages a closed, shared fraud database on behalf of its members, she explains.

"The fraud database consists of records that are filed by member organisations when they have sufficient credible evidence relating to all types of fraudulent activity committed by individuals," McLoughlin says.

For example, in cases of identity fraud, if someone uses your identity to open accounts or apply for credit in your name and is caught out, that information will be recorded on SAFPS`s database.

She says the use of the database has saved SAFPS members more than R6.5 billion in fraud losses since inception, with close to R1 billion saved last year alone.

If you suspect that someone has committed fraud in your name, or want to check what information SAFPS has on you, you can ask SAFPS what, if anything, it has.

McLoughlin says SAFPS can issue you with a report only if your identity number is listed on its fraud database.

RETENTION PERIODS

The NCA sets out retention periods for consumer credit information. For example, if you have been liquidated, this remains on your record indefinitely, whereas an administration order remains on your credit report for 10 years.

McLoughlin says the NCA is silent on retention periods for information that relates to fraud, and SAFPS has submitted a proposal to the Department of Trade and Industry to issue a directive on the retention period for fraud records.

Until this directive has been issued, SAFPS has its own retention periods, which it shares with people who have been listed, she says.

If false information about you has been listed on SAFPS`s database, and you have proof that it is false and haven`t been able to resolve your dispute with SAFPS, credit provider or company that listed the information, you can complain to the National Credit Regulator. Phone 0860 627 627, email complaints@ncr.org.za or go to www.ncr.org.za

IDENTITY FRAUD ON THE RISE

The incidence of identity theft in South Africa has trebled over the past three years, Carol McLoughlin, the executive director of non-profit company Southern African Fraud Prevention Service (SAFPS), says.

At the end of April, 1 370 cases of identity fraud had been reported to SAFPS for the year. This is a 16-percent increase in this crime on last year`s figures. If it continues at this rate, the number of incidents of identity fraud could exceed 4 000 by the end of the year. Last year, 3 873 cases of identity fraud were reported, and in 2012 there were 3 327 cases.

Identity theft costs the economy about R1 billion a year, according to credit bureau Compuscan.

Typically, you realise you`re a victim of identity fraud when a credit provider tries to collect money from you for debt that was acquired fraudulently in your name.

It is difficult to protect yourself from identity fraud. You can report to SAFPS the theft or loss of your identity document and/or passport which could be used to impersonate you. This information is filed on the SAFPS database and is available to its members. This is a free service: your information will remain listed for 12 months, unless you ask for it to be extended.

To use the SAFPS`s service, email safps@safps.org.za

The only way to keep abreast of credit taken out in your name is by regularly checking your credit reports with each of the big four consumer bureaus. Since you are entitled to one free report a year, this enables you to check your report once every quarter -for free.

The four main consumer credit bureaus are Compuscan, Experian, TransUnion and XDS (see "Check your credit report", right).

COMPROMISED

Frank Lenisa, a director at Compuscan, says consumers who keep their repayments up to date assume that they have a healthy credit report, but it is imperative to check that your report has not been compromised by fraudsters.

"It`s important for credit-active consumers to keep a close eye on account activity under their name to prevent and recover from identity fraud. This is one of the steps that can be taken to protect the health of their credit records," Lenisa says.

You should also carefully examine your statements, keep your passwords and identity number secure, and shred receipts and statements before discarding them. Personal information should never be given over the phone, and the authenticity of websites should be checked before entering any personal information online.

If your credit report reflects loans that you did not apply for or accounts you did not open, you should contact the credit providers and request that they provide you with the application form that you allegedly signed when applying for the credit.

Remember, you have the right to dispute any factually incorrect information on your credit report and have the information corrected.

Check your credit report

Every year, you are entitled to one free copy of your credit report from each of the registered credit bureaus.

Although 14 credit bureaus are registered with the National Credit Regulator (NCR), only four of them are full-service consumer bureaus. Among the others are specialist bureaus such as Medical Credit Watch, which is a bureau for healthcare providers only, and Tenant Profile Network, which specialises in vetting tenants for rental properties.

The "big four" and their contact details are as follows:

Compuscan: 0861 514131
Experian SA: 0861 105 665
TransUnion: 0861 482 482 and
Xpert Decisions Systems: 011 645 9100.

According to the latest figures from the NCR, credit bureaus have credit records for 21.71 million credit-active consumers. Forty-four percent of these consumers -or 9.93 million people - have impaired credit records. This means either that they are in arrears (by three or more months) on at least one account, or have a debt judgment or administration order to their names.

In the first quarter of this year, credit bureaus issued credit reports to 168 829 consumers. About 80 percent of reports were issued free of charge.

There were 25 005 disputes lodged about information held on consumer credit records for the quarter, which is an increase of 27 percent quarter-on-quarter and 48.2 percent year-on-year.