By Ashleigh Brown, journalist, Justmoney
The R699 car scheme members were denied a class action suit against the banks and Satinsky. Furthermore, the attorneys that represented them have to take on the costs of the case.
On Thursday, 21 August, the Port Elizabeth High Court judge dismissed attorney Duncan Heuer’s application to have the R699 car scheme clients certified as a class.
The aim of the class action suit was to have the credit agreements with the banks – Nedbank’s Motor Finance Corporation (MFC), Absa and Standard Bank – declared to be reckless lending in terms of the National Credit Act.
If the class action suit was a success, the banks would have been obligated to take back the cars and declare the contracts between them and the consumers null and void.
The ruling
IOL reported that Judge Chetty said Heuer’s papers were “based entirely on conjecture and assertions”.
These assertions were that the banks did not conduct proper affordability assessments, and that the clients did not fully understand the risks, costs and obligations of the contracts they had signed with the banks.
PCF Law, the firm for which Duncan Heuer works, released a statement regarding the R699 car scheme hearing. They maintain that they are trying to help the clients in any way possible:“It has been our intention from the outset of this matter to assist consumers affected by the R 699 car scheme, at no cost to them. Despite the judgment, we shall continue to do so in any way we possibly can.”
“We have, however, after careful consideration and having taken advice from senior counsel, taken a decision as a firm to file a notice of intention to seek leave to appeal the cost order made against the firm,” said PCF.
According to PCF, as the class action suit was unsuccessful, clients will now have to make arrangements with the banks by themselves.
Bank’s welcome ruling
Philip Wessels, group managing executive of Retail and Business Banking at Nedbank said that they welcome the ruling. “Nedbank welcomes the ruling of the class action by the Port Elizabeth High Court relating to the Satinsky R699 car scheme against MFC (Nedbank), Standard Bank and ABSA, by a group of disgruntled clients who signed up for the scheme.”
Nedbank has put procedures in place for clients affected by the R699 deal: “Motor Finance Corporation (MFC), a division of Nedbank has a dedicated process in place to assist the affected clients and remains committed to working with all clients to explore viable solutions in line with the National Credit Act,” said Wessels.
Absa had the same sentiments as Nedbank, saying that: “We are pleased with the judgment and believe that this is the correct application of the law to the facts of the case.”
Adding to this, Absa also has a dedicated option for R699 clients with regards to their loans: “Absa has and will continue to assist clients who are under financial stress.”
Defamation charges
Albert Venter, CEO of Satinsky, has served a summons on Cornelia Maria Nel, as reported by Times Live. Nel is reportedly one of the administrators of the Facebook group, ‘I have been done in by the R699 car scheme’.
The summons came about as allegedly defamatory comments were made on the site by members about Venter.
The case will be heard in the North Gauteng High Court, Pretoria. However no date has been set.
The deal
Clients of the R699 car scheme had two options when it came to payment of their 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. This 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 collapsed and a number of customers say they are now unable to meet their vehicle finance obligations.
It was reported that 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.
Bank’s exposure
It was reported that Absa had R700 million worth of exposure to the R699 car scheme. Standard Bank’s revelation about their exposure pushed the overall exposure to the R699 car scheme by the banks to R2.768 billion.
MFC has a collective outstanding exposure of R1.6 billion to the R699 car deal scheme, almost double Absa’s exposure.
In a statement to Justmoney Nedbank claimed that: “individual MFC clients who have purchased vehicles through the Satinsky Group since 2007 amount to approximately 14 000, with a collective outstanding exposure of R1,6 billion at 30 June 2014.”
More information
Justmoney’s sister website, Moneybags, has a full report on the claim made by the R699 car scheme clients, and everything you need to know about the R699 car scheme itself.
Affected R699 clients with Nedbank are encouraged to contact the MFC on these various channels for assistance with their loans:
• 699queries@mfc.co.za
• complaints@mfc.co.za
• 0860-879-900 (but please tell the call centre agent you are a R699 / Satinsky client to ensure fast-track routing to the specialist support team).
For Absa clients please call the following number 0860 789 111 (Option 5) to enable Absa to assist you on an individual basis.