Questions about phone records being used for credit scores in South Africa

TransUnion and MTN have responded to questions about a new service they launched yesterday that can compute a credit score for someone based on their call data records.

Called TransUnion Telco Data Score, the companies said the system would help millions of South Africans with limited or no formal credit history gain access to financial services.

They explained that call data records (CDR) reflect patterns in mobile phone network usage behaviour and correlate to an individual’s financial behaviour.

CDRs are metadata about calls, including the phone numbers being contacted, and when the call started and ended. It may also include which cellphone towers the device was connected to during the call.

Considering that South Africa’s RICA law treats CDRs as extremely sensitive information, using them for credit scoring raises privacy, security, and legal questions.

Even law enforcement in South Africa is not supposed to be able to access call data records without an order from a designated RICA judge.

MyBroadband asked for a detailed technical breakdown of how people’s CDRs would be kept secure and TransUnion provided the following statement.

“TransUnion deploys a multi-layered security program to combat the ongoing and increasing threat of fraud, cyber-attacks and malicious activity,” it said.

“In today’s dynamic threat environment, TransUnion is constantly enhancing and refining our controls to address the latest security threats.”

TransUnion Telco Data Score was developed in partnership with MTN’s digital platforms business, Chenosis.

Chenosis provided the following statement regarding how it was able to use call data records for credit scoring without violating RICA.

“The data provided will be shared in terms of the Protection of Personal Information Act (POPIA) on the legal basis of consent,” it said.

Chenosis said consent must be explicit and no data would be processed or shared without it.

“If the customer does not provide consent, the transaction will not continue. Consent is requested each time a new transaction requiring credit verification occurs,” it said.

All data shared is aggregated and no call data records identifiable to data subjects are provided.

“Data processed demonstrates patterns of usage, which is used to generate a credit score against a category of data subjects,” Chenosis said.

Consent is voluntary, specific to the transaction, and granted per lender. Therefore, if a customer consents to its Telco Data Score being released to one lender, the consent applies only to that lender.

“This provides customers with control over access requests to their data,” Chenosis said.

On MTN’s network, customers can opt-out or revoke their consent any via by dialling the USSD code *135#.

Chenosis said that through the USSD code, customers can immediately revoke consent and opt out of sharing their information with the lender they initially consented to sharing it with.

MyBroadband tested the USSD feature and found we were able to access a menu to grant or revoke consent to TransUnion and Experian through the following selections: *135#—0 (More) — 8 (Consent Management) — 0 — 4 (Information sharing consent).

Creating opportunity, empowering lenders, and growing the economy

In their statement announcing the service, TransUnion and Chenosis said Telco Data Score would provide millions of underserviced people with access to credit for the first time.

“By using telco data as a proxy for financial reliability, the TransUnion Telco Data Score enables lenders to accurately assess new-to-credit consumers and expand access to safe, affordable credit,” TransUnion said.

According to TransUnion estimates, over 1.4 million credit-invisible South Africans open new credit accounts each year, contributing to more than four million new accounts over the past three years.

However, traditional scoring models often fail to assess this segment accurately, leaving more than 16 million adults outside the formal credit system.

Approximately 35% of new-to-credit consumers are under the age of 25, many of whom are new to the workforce and often use credit to buy clothing for work.

TransUnion said this highlighted the need for innovative tools that support younger, digitally active individuals who may lack a conventional credit footprint.

It said that successfully integrating these and other excluded consumers into the economy could add approximately R173 billion to South Africa’s GDP.

TransUnion said it conducted pre-launch validations across the retail and banking sectors, where the service demonstrated a 25–35% improvement in predictive performance over past alternative data models.

By adopting TransUnion Telco Data Score, it said lenders could better predict user behaviour and support responsible lending by ensuring that credit users at risk of default are not overexposed.

The product also helps new-to-credit consumers establish and build their credit footprint over time.