WENDY KNOWLER | Free credit score, seven-day cooling off period and detailed contracts

In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use: 

You can get your credit score free, just not from one particular credit bureau

Your credit report is a record of your borrowing history, containing your personal details and a list of your past and present debt and all the applications you — or a fraudster impersonating you — have made for loans or accounts.

It also shows whether you pay your debt on time or miss repayments. It’s your credit score, based on that report, which provides you — and the companies you want to get credit from — with an instant indication of whether you’re considered a good, bad or borderline risk.

The score is a three digit number ranging from 0 to 999. You need a credit score of at least 600 for a bank to consider your home loan application and anything above 650 is considered a good credit score. In terms of the National Credit Act, each credit bureau is required to give you access your credit record free once a year.

Thabang recently tweeted that the free report which South Africa’s largest credit bureau — TransUnion — makes available is “incomplete” in that it doesn’t reflect the credit score. The Credit Ombud’s head of case management Lee Soobrathi confirmed this.

“Not all the credit bureaus provide a credit score with the free credit report. TransUnion does not. “They charge an extra fee for that,” he said. “But with Experian, XDS and Compuscan the score is included in the report.”

Legally the National Credit Act only refers to the requirement to provide one free credit report a year — there is nothing specifying a credit score, so they may withhold it. Happily their competitors choose not to. Good to know.

About that seven-day cooling off period

So many people believe they have the benefit of a seven-day cooling off period in which they can reverse a transaction and get their money back or be free of contractual obligations. In terms of the Consumer Protection Act, there are only two instances in which that is true: if you buy something online and if you agree to a product or contract as a result of direct marketing.

Direct marketing scenarios include agreeing to a cellphone contract over the phone and signing a gym contract on the basis of an advertising flyer you were handed in a mall or on the street. It does not apply when you choose to enter a physical shop and buy something or sign a contract.

That’s what Prince did during Black Friday week. He renewed his cellphone contract in a shop and the smartphone which came with his chosen package was a Huawei. “To my dismay I discovered it is not supported by Google Services and runs on a completely different ecosystem,” he said.

“I immediately notified the store of my frustration with the new device but the store manager flatly refused to assist me. I escalated the matter to head office but I am not getting any joy. All I want is to cancel my contract. I am still within the cooling off period.

“They tried to convince me the alternative system works as well as Google, but I found it to be cumbersome.”

In May 2019, then US president Donald Trump put Huawei and several other Chinese companies on the “Entity List”, meaning they are unable to do business with any organisation that operates in the US. In the case of Google, this means newer Huawei smartphones are no longer able to ship with Google-owned applications pre-installed. This is no secret and it can be argued that consumers are required to do their own research before making a purchase or agreeing to a contract. 

As the phone is not defective, Prince doesn’t have a free “out”.

But cellphone service providers should choose to mention the Google issue to customers who choose an affected phone in the interests of full transparency. Reader Lans says there is a work-around for this issue.

“You can also go to the Huawei app gallery and get apps from there.”

Never make assumptions about the length of a contract 

Remember when cellphone contracts were for 24 months?

Now, thanks to the escalating price of high-end smartphones, cellphone providers keep monthly subscription fees at an “acceptable” level by extending the contract to 36 months.

And, predictably, some people don’t notice that in their contracts before signing.

The same thing happens with gym contracts. Zile of Cape Town e-mailed me this week to say: “I signed a gym contract in 2020 not knowing it was a three-year one as the salesperson did not state that.

“I became unemployed in February 2021 and when I tried to cancel they asked me to pay a cancellation fee of R2,000.”

She didn’t pay, so she was handed over to debt collectors who demanded she pay R6,000. “That’s ridiculous,” she said, and she’s right.

She’s trying to pay it off at R250 a month. I will investigate this case as that escalation is not legal — you can’t be made to pay more than double your original debt.

But here’s the warning: if you want to join a gym, concentrate twice as much on what’s in the contract as on what a salesperson — who is hungry for a commission — tells you.

Pay particular attention to the contract period and cancellation penalty clauses.

• GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.

Support independent journalism by subscribing to the Sunday Times. Just R20 for the first month.