By Angelique Ruzicka, editor, Justmoney.co.za
The National Credit Regulator (NCR) is investigating what is currently known as the R699 (six-nine-nine) per month car scheme after customers complained that they were losing money following the collapse of a promotional scheme linked to Satinksy, the company behind the R699 offer.
Some customers also claimed they had been awarded vehicle finance loans that were well above what they could afford through Satinsky which applied to several banks including Absa, Standard Bank and Motor Finance Corporation of Nedbank on their behalf.
Today (15 July 2014) the NCR said it is combatting predatory lending practices, including credit marketing practices and has slapped a Compliance Notice against Satinsky 128 (Pty) Ltd. Satinksy’s offering involved supplying customers with entry level cars which would display advertisements highlighting the deal ‘Get a new car for R699 a month’.
A deal too good to be true?
Customers of Satinsky had two ways in which they could repay their car loans. They could either pay full instalments over six years to the bank or sign a deal with a promotions company based in Hong Kong called Blue Lake Trading and Promotions, which would give them a monthly promotional fee in exchange for them sporting advertisements on the car and driving a certain distance (as much as 2000 kilometres a month).
However, the promotions scheme has since collapsed and a number of customers say they are now unable to meet their vehicle finance obligations. According to some reports, Satinsky altered information on vehicle finance applications so that they would be approved by banks. It has also been claimed that all the banks involved in offering finance didn’t conduct proper affordability assessments – a claim which Absa, Standard Bank and MFC deny.
Standard Bank’s Ross Linstrom told Justmoney: “Standard Bank does a comprehensive affordability assessment of every customer approaching Standard Bank for a loan. Loans will only be granted to a customer if all the credit and affordability criteria have been met. With regards to your specific questions regarding Satinsky/Blue Lakes, Standard Bank does not take into account any future royalties or earnings when signing a credit agreement with a customer. No vehicle subsidies are taken into account. Standard Bank does not have a view or information on customers of Satinsky/Blue Lakes, as agreements with them are made separate with them, and without Standard Banks knowledge.”
He added that Standard Bank would be happy to look at assisting customers in rescheduling their loans as they would for any normal collection practice for accounts in arrears. “Should customers feel that they are not in a financial position to honour their financial commitments, they should contact their bank immediately so that a mutually beneficial solution could be agreed upon.”
According to reports, Wesbank said that it has refused to conduct business with Satinsky in any way and its CEO Chris De Kock slammed the R699 deal as a pyramid scheme.
Satinsky, meanwhile, blames the Hong Kong based promotions company Blue Lake Trading and Promotions for its woes.
The NCR said the National Credit Act (NCA) regulates advertisements for credit and stipulates the minimum content that must be disclosed when credit is advertised. It pointed out that the advertisement by Satinsky discloses the monthly instalment of R699 only.
The NCR added that it requires that if an advertisement discloses the monthly instalment, it must also disclose the instalment amount, number of instalments, total amount of all instalments (including interest, fees, and compulsory insurance), interest rate and residual or final amount payable.
The advertisement of Satinsky appearing on the website also contains the statement that consumers will pay a reasonable interest rate without disclosing the cost of credit. The notice requires Satinsky to submit an audit report to the NCR confirming that its advertisements for credit comply with the NCA and that it has implemented systems and procedures to prevent the issuing and publication of non-compliant advertisements.
“The audit report will provide assurance that all advertisements appearing on vehicles are in compliance with the provisions of the NCA,” said Nomsa Motshegare, chief executive officer of the NCR.
“Satinsky has an opportunity to bring its credit marketing practices in line with the provisions of the NCA, however, should it fail to do so, the NCR will approach the National Consumer Tribunal for stringent orders, which may include an administrative fine,” said Motshegare.
The NCR added that it is investigating the Satinsky’s R699 vehicle scheme for other possible contraventions of the NCA. “The purpose of the investigation is to establish if vehicle owners were granted credit in accordance with the NCA. This is a separate issue from the credit advertisements appearing on the vehicles,” concluded Motshegare.
Social media complaints
Meanwhile, customers have taken to social media platforms and HelloPeter to complain about Satinsky and the collapse of Blue Lakes Trading and Promotions. Some have angrily removed the advertising which had previously earned them money.
At the time of writing, 2,333 people had signed up to the Facebook group ‘I have been done in by drive a car from R699 per month’ and there were just over 100 complaints entered on HelloPeter.
Administrators of the Facebook group include Simon Lapping who told Justmoney that he has taken on the task of representing victims of the scheme himself and is negotiating with banks on behalf of customers who are unable to make repayments on loans awarded via Satinsky. This week he said he had met with MFC.
This week City Press
reported on the lavish lifestyle led by Albert Venter the man behind Satinsky and the controversial R699 scheme. The paper claims he lives in the Pretoria suburb of Mooikloof where he has a Ferrari FF, Porsche Cayenne Turbo S, Maserati Spyder and a Nissan Infiniti SUV parked in the driveway.
Attempts made by Justmoney to contact Venter on his cell phone have proven futile, however Lapping said that Venter has been in touch with him and wants to meet with him at his offices.
But Lapping has reservations. Today he said on the Facebook group: “Mr Venter and Satinsky has been on my mind for the last 24 hours and the fact that he requested me to go to his offices is a worry for me. Mr Venter offered me a Directorship in his company which I declined…He has had plenty opportunities from the media to clear the air and to come clean regarding his business and he has declined these offers from the media.
“We were initially supposed to meet in a public space to which I have no problem but the goal posts have been changed to meet him in the lion's den and that I am not prepared to do. I do not want to know about Accelerator Rewards, I want to know about how he is going to keep to his word and fulfil his obligations to everyone regarding the concept he sold to everyone. I apologise to those of you that had faith in me to meet him but under the circumstances I cannot do this.”
(Justmoney is requesting comments from other banks that have financed customers through Satinsky. We will provide updates and comments as and when we get them).
If you want to contact Justmoney regarding the scheme, email us at email@example.com with the words ‘Satinsky R699 scheme’ in the subject line.