# Regulatory Compliance Category > National Credit Act Forum >  Blacklisting of Customers

## jazz

I work in an organisation that falls under 'incidental credit' however at this point in time we do not levy any interset on arrears balances. Are we able to blacklist clients, what would this have on our organisation bearing in mind that that our agreemnt is not completely subjected to the NCA 

Regards 
Jazz

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## Dave A

I've had a quick skim through from Section 70 - which seems about the place to start unravelling this aspect.

I can't see anything that prevents us from blacklisting a defaulting client under an incidental agreement, other than meeting the prescribed notice period of the intention to the client (which seems to be 20 days).

As I said - a quick skim at this point.

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## stephanfx

What are the "requirements" for blacklisting a client? Only defaulting on payment of an account, or is more necessary?

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## Eugene

All credit bureaus and subscribers accepted a code of conduct indicating the responsibilities of the Credit Bureau as custodians of the data and the responsibilities of the individual subscribers. Typically only large companies are subscribers to bureaus as they also make use of them for their credit scoring on order to establish creditworthiness. Some extracts from the code include:

1.  Data collection and disclosure notification: Subscribers of credit bureau are encouraged to include a standard notification and consent clause in their credit application form. This clause should notify consumers that personal information and payment behaviour may be accessed from and supplied to a credit bureau for risk management purposes.

2. Duty to supply accurate, correct, up-to-date, relevant and complete data: Subscribers must take reasonable steps to ensure that all data supplied to the credit bureau is accurate, correct, up-to-date, relevant, complete and valid. Information must be supplied within a reasonable time period. 

3. Prior notice required before Default listing: Subscribers must give their customers 28 days written notice of their intention to submit default information regarding the customerÃ¢â¬â¢s payment performance to the credit bureau. This notification shall be to the customerÃ¢â¬â¢s last known address, preferably by registered post. 

4. Default listings in respect of prescribed debts: Subscribers shall not submit default information to credit bureau in respect of debts that have prescribed 

5. Duplicate Default listings: Subscribers shall not submit default information more than once in respect of the same debt. 

Turning to the NCA and section 70 which deals with credit bureaus it is noted that only registered credit providers (section 70(2)) may submit details to the credit bureau upon payment of a submission fee. One must bear in mind that default judgments issued by the Courts are automatically lodged at the relevant credit bureaus. The Ã¢â¬Åbad paying consumerÃ¢â¬Â (payment history) could only be listed if you are a credit provider and a subscriber at the bureau.

With regards to Ã¢â¬Åincidental credit agreementsÃ¢â¬Â it would indicate that the company is not registered as a credit provider and therefore the bureau is under no obligation to accept the report (section 70(2)). Should you however reach a stage where you have more than 100 incidental credit agreements, registration as a credit provider will be imminent as required by the NCA and you would then be in a position to lodge your payment profiles of defaulting consumers to the bureau if you are a subscribed member or paid the submission fee.

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## Dave A

Eugene, what I got under 70 (2) (a) is this:



> (2) A registered credit bureau must-
> 
> (a) accept the filing of consumer credit information from any credit provider on payment of the credit bureau's filing fee, if any;


I'd take it from this the credit bureau needs to be registered, but not necessarily the credit provider?

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## Eugene

Dave as I understand it, the credit bureau must be registered as well as the credit provider. It seems that the then looking at the wording of section 70(2)(a) with reference to "credit provider" one must bear the definition of credit provider in mind as stipulated in the NCA.  On first glance it seems that only registered credit providers might list defaulters, which seems unfair. We have a Cape Law Society Seminar on the 30th of June with Mr Gabriel Davel (NCR) and I will raise the question.

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## Dave A

> We have a Cape Law Society Seminar on the 30th of June with Mr Gabriel Davel (NCR) and I will raise the question.


Thanks, Eugene. I for one would be most interested in the response. The threat, or actual blacklisting seems on average to be the far quicker and more cost effective route in producing a result than taking the legal collection route nowadays.

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## Eugene

Will keep you guys posted!

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## Brett Bentley

Dave A "...actual blacklisting seems on average to be the far quicker and more cost effective route in producing a result than taking the legal collection route nowadays."

You obviously need a more effective attorney and collection procedures... ;-)

On a more serious note I am still firmly of the opinion that there is no requirement to be a registered credit provider in order to be able to list a debtor with credit bureaux.

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## Dave A

> You obviously need a more effective attorney and collection procedures... ;-)


Quite possibly. We don't have much of a bad debt problem. But when we do, some debtors can be really squirmy and hard to get a summons properly serviced upon. And more recently I had one that simply did not respond to anything - and then successfully applied for recision of the default judgement. Pretty much start again  :Frown: 

Finally, the delay in getting a defended matter on the roll for some courts is simply not funny. And then they want to settle at the last minute anyway. 

With blacklisting you suddenly get this screaming banshee who just wants to get off the list asap because it's screwing up their car/home/whatever purchase. It normally comes with heaps of verbal and having a record of all the phonecalls you made before you blacklisted them proves useful. 

Which is quicker? Ultimately, it depends how often they are getting finance, but the worst offenders (the non-responders and service avoiders) seem to be playing with financed transactions quite regularly.

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## Brett Bentley

Dave I'm not sure what line of business your company is in but I would advise the use of a domicilium address in your credit application form to facilitate the service of the summons on the debtor while your attorney is tracing the whereabouts of the debtor and the early default judgments will also result in the listing at the credit bureaux.

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## Eugene

I agree with Brett - we make extensive use of a domicilium address in credit application which means that a summons could be served at that address (being the chosen domicile address of the debtor) regardless if he/she still lives there. But that's only the first problem solved (the easy one). The nitty-gritty usually comes in when the debtor has moved and you want to proceed with executionary steps such as a warrant of execution etc. Then the domicilium address will not be of any help and you first have to trace the debtor in order to proceed, but at least at that stage you would have obtained judgment against the debtor.

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## Dave A

The trick would be to get a signed off chosen domicile when there is no intention to give credit. It can be a bit of a challenge in the service industry.

You get this instruction to _do the service, send the invoice and I'll pay the money by internet transfer within a couple of days_ type of thing going the whole time. Quite often, you never even get to physically meet the client.

Lately we've been insisting on a faxed instruction, but some people take exception.

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## Eugene

Dave, it seems a catch 22 in your case. If I were you I would draft a pro forma instruction detailing the work to be done and the price (and any warranties on the work and/or services done) together with teh domicile clause and have that sent to the clients for signature. In such a way you cover both parties: you on teh one side as you have some leverage and the consumer as the "document" serves as his/her warranty for work done etc. If you explain it in this manner to your clients, you would not be stepping on toes.

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## Dave A

Thanks Eugene. That's pretty much what we are doing nowadays. 

It takes a bit of discipline, though, to not proceed with the work when the paperwork hasn't been done. A fairly regular problem is that the client undertakes to be present to sign the paperwork when we arrive to do the work. And then when you get there, there is only a domestic servant present. And of course everyone is screaming at you to get the job done anyway because it is urgent.

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## Bing0

Morning Everyone,

I have a family business for appliance repairs ... washing machines, fridges, ovens ... that sort of stuff. We have a lot of customers that haven't paid us and all we can do is to send email and sms reminders ... the emails are free, but the sms's cost (not much, but, still a cost). I would like to know what I am allowed to do in order to "blacklist" a customer for not paying or verbal abuse or threatening with a gun for no reason what so ever.

I am thinking of starting a web site where one can blacklist a customer and share this data ... and other service providers can check to decide if they want to take a risk, repair and not get paid or simply tell that customer they are blacklisted for not paying.

Am I allowed to do something like that?

Regards,
Bing0

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## Hannes Botha

I don't know how anybody can give credit anymore, especially in your case (as is mine) Bing0

I have about R250k worth of bad debt on my books. Problem is, it's a R3k here and a R4k there. Obviously we were too lenient, but that is water under the bridge.

i have found that as a business owner have no recourse to collect money. You send reminders (sms costs, time, etc) then you send lawyers letters (lawyers cost). If all that fails, you take him to court (R1k as per my lawyer). Now he says to the honorable, that he can only afford R250 per month. Good, settled. At least I get something back, right? Then he stops paying again, and I have to drag him to court again...

As Business owner you also cannot claim at small claims court...

This will be my downfall...

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## IanF

Hi Hannes for credit the latest trick that worked for me was to the restaurant that owed R4k and there was a new manager. So I asked does she know if there is a problem as payment for the menus done in November hasn't been paid. Then emailed the manager and asked the same question and was paid an hour later.
But if they ask for menus again then it is payment with order. 
We also have a "blacklist" of customers on the wall so if they ask for quotes then it is payment with order. 
Now any new customer is a minimum of 70% payment with order.

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## VLW

BCM Credit Risk Solutions are good, chase payments and deal with legalities and black listing.  See if their monthly consulting fee for a small business is viable or not worth it for your situation.

Sent from my SM-A500FU using Tapatalk

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## Hannes Botha

> Hi Hannes for credit the latest trick that worked for me was to the restaurant that owed R4k and there was a new manager. So I asked does she know if there is a problem as payment for the menus done in November hasn't been paid. Then emailed the manager and asked the same question and was paid an hour later.
> But if they ask for menus again then it is payment with order. 
> We also have a "blacklist" of customers on the wall so if they ask for quotes then it is payment with order. 
> Now any new customer is a minimum of 70% payment with order.


Problem is: My customers ask me to help them so that they pay, say a R1800 bill at the end of the month. Then pay on time! GREAT! Next time it is a R3200 bill, and they pay half now and half end of the month. Then pay on time! GREAT! Next time it is a R6700 bill. Can I pay it over three months? And since he has built up a report with me, I allow it. Then the stories start: I'm unemployed now or one of my taxi's broke so I can't pay you this month. Then you usually resort to whatsapps and sms mixed in with some guilt tripping and name calling.

Luckily, I am part of a franchise. They have decided to launch a finance division. Where I send applications to them, they approve or deny applications and once the work is done, they pay me, and get the money from the customer. Of course, this won't help me recover anything I've lost...

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## IanF

> Luckily, I am part of a franchise. They have decided to launch a finance division. Where I send applications to them, they approve or deny applications and once the work is done, they pay me, and get the money from the customer. Of course, this won't help me recover anything I've lost...


That is great going forward, plus you can put the sales on budget with the credit card. It those old customers who have problems that do catch you out. 
Let us know if you get a legal way to name and shame!

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## jamjashare11

Thanks. That's pretty much what we are doing nowadays.

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## sjijaz

Hi Eugene, can you assist me on how I can personally go about  trying to Blacklist an Individual  who owes me R60K
Thx Sjij

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