By Angelique Ruzicka, editor, Justmoney
The National Credit Regulator (NCR) has arrested several lenders that were ignoring the rules of the National Credit Act and taking advantage of borrowers’ ignorance of the law. The regulator said that it is identifying credit providers that are unlawfully garnishing, retaining pension cards, bank cards, identity documents and personal identity numbers (PIN) of their clients as surety.
Last month it mounted an investigation on 21 credit providers operating in the Pretoria, Boksburg, Benoni and Kempton Park areas. During the operation, two people were arrested and two criminal cases were opened.
The suspects were found to be in possession of 390 bank cards, said Nomsa Motshegare, CEO at the NCR. “Retaining these cards is a contravention of the National Credit Act and it is a criminal offence,” she explained.
She added that this is part of the NCR’s ongoing strategy to root out predatory lending practices and to ensure that all credit providers, no matter where they conduct business, comply with the provisions of the NCA. “The exploitation of vulnerable and unsuspecting consumers by credit providers will not be tolerated.”
Motshegare assured that this operation was not the last one and that many will continue to be conducted in different parts of the country.
Lenders doing wrong
Last year the NCR made nine arrests after launching an investigation together with SAPS and the Directorate of Priority Crimes and Investigation in Venda. The operation was dubbed Blitskrieg, after a German method of warfare. Blitzkriegs were conducted in the Eastern Cape, Kwa-Zulu Natal, the Western Cape and North West Provinces.
Figures produced last year showed that since Blitzkrieg’s launch 47 people had been arrested and that 2,561 bank cards, 1220 pension cards and 401 identification books had been recovered.
Figures produced last year showed that since Blitzkrieg’s launch 47 people had been arrested and that 2,561 bank cards, 1220 pension cards and 401 identification books had been recovered.
Internationally, lenders have also come under the spotlight for falling fowl of the rules. Last week, Justmoney reported how Wonga’s UK business came under fire from the Financial Conduct Authority after it sent out fake legal letters to clients that were in arrears and charged them for the ‘services’. The lender was forced to comenpensate the affected customers.
Wonga’s South African CEO Kevin Hurwitz stated that the same practice was not being adopted here but Justmoney is conducting its own investigation following emails from readers querying legal letters from Landau Attorneys, Black Fox Credit Management and Blake & Associates.
Landau Attorneys have confirmed that Wonga is a client while Black Fox Credit Management have refused to comment. At the time of writing, Justmoney was unable to obtain a statement from Blake & Associates.
Wonga has, meanwhile, confirmed that they have dealt with Landau, Black Fox Management and Blake & Associates. A spokesperson said: "Landau is indeed one of our DC agencies, as is Blake & Associates. Blackfox used to work for us, but we ended the relationship in April this year, and we removed most of our customer accounts from them then. They do still have a handful of accounts that they are working on our behalf – mainly those that they had managed to put repayment arrangements in place. They are absolutely a legitimate company, as are Landau & Blakes."
Landau Attorneys have confirmed that Wonga is a client while Black Fox Credit Management have refused to comment. At the time of writing, Justmoney was unable to obtain a statement from Blake & Associates.
Wonga has, meanwhile, confirmed that they have dealt with Landau, Black Fox Management and Blake & Associates. A spokesperson said: "Landau is indeed one of our DC agencies, as is Blake & Associates. Blackfox used to work for us, but we ended the relationship in April this year, and we removed most of our customer accounts from them then. They do still have a handful of accounts that they are working on our behalf – mainly those that they had managed to put repayment arrangements in place. They are absolutely a legitimate company, as are Landau & Blakes."
She added: "If any consumers have any concerns regarding this, they are welcome to call our customer service centre on 0861966421 who will be able to assist them."
Contact Justmoney:
Has your lender taken possession of your pension cards, bank cards or identity documents? If so email us at info@justmoney.co.za and we will send them onto the NCR for investigation.