Thirteen credit providers have landed in hot water with the National Credit Regulator (NCR), which has referred them to the National Consumer Tribunal (Tribunal) this month.
The NCR has not named the companies referred to the Tribunal but they did release the geographical areas in which these providers operated, which included: five from the Eastern Cape area such as King Williams Town and Stutterheim, two from Bloemfontein, one from Rustenberg in the North West, one from Nelspruit, one from Dundee in KZN, one from Gauteng and two from Stellenbosch and Roberston in the Western Cape.
“We will not be releasing the names as each of the entities are not guilty of the same contraventions. We have highlighted the general contraventions in the referrals as to show that we are not increasing our efforts in dealing with these contraventions,” said a spokesperson from the NCR.
The referrals follow investigations conducted by the NCR across the country into micro-lenders. These investigations revealed that these entities were:
1. Giving credit recklessly to consumers;
2. Failing to provide pre-agreement quotations to consumers;
3. Charging interest in excess of the prescribed maximum rates;
4. Overcharging of service fees;
5. Unlawfully retaining pension cards, bankcards, identity documents and personal identity numbers (PIN) of their clients as surety.
“The NCR is intensifying its effort to detect reckless lending and the retention of consumer bank cards and identity documents,” says Jacqueline Boucher, manager investigations and enforcement at the NCR.
The NCR will continue to take enforcement action against entities who extend credit recklessly to consumers and reminds credit providers that keeping pension cards, bank cards and identity documents is a criminal offence”, she adds.
The NCR is asking the Tribunal to order the entities to:
· Refund the affected consumers
· Interdict them from continuing with their unlawful conduct
· Impose an appropriate administrative fine.
The NCR will continue to conduct industry-wide investigations to root out breaches of the National Credit Act and abuse of vulnerable consumers.
Last year Capfin, Cash Converters and furniture retailer Lewis landed in hot water with the regulator too: When asked for an update, the spokesperson said that the Lewis case remains before the Tribunal. “…We await a hearing date [for Lewis]. In the Capfin case it is before the Tribunal and we await judgement.”