Adjudication( continued)
The debt counsellor recommended a restructuring of the payment instalments to all credit providers. All the credit providers consented to the recommendation.
The Tribunal expressed concern about the interest rate charged by one of the credit providers in the consent order. The transaction between the applicant and Randburg Finance was a shortterm credit transaction. Randburg Finance was entitled to charge 5 % per month in terms of the National Credit Regulation 42( Table A). Randburg Finance was charging an interest rate of 60 %. This concern was raised by the Tribunal, mero muto, ie without it being raised by any of the parties.
The Tribunal had to determine whether the interest rate charged by Randburg Finance exceeds the maximum prescribed interest rate of 5 % per month in terms of National Credit Regulation 42( Table A), sections 101( 1)( d) and 103( 5) of the NCA.
The Tribunal refused the application for the consent order and referred the matter to the Regulator to investigate whether there was prohibited conduct on the part of Randburg Finance.
The Tribunal found that the agreement between the applicant and Randburg Finance constitutes a short-term loan. It is a loan not exceeding R8 000 which is repayable within six months. When such a loan is granted, the credit grantor is entitled to charge 5 % per month in terms of Regulation 42( Table A). Section 101( 1) states that the interest charged may not exceed the maximum prescribed rate ie 30 % over 6 months. The Tribunal held that an agreement to pay 60 % interest per annum constitutes an illegal agreement.
The Tribunal further held that the agreement is contrary to the in duplum rule. The Tribunal referred to judgment of NCR v Nedbank Limited and others 2009( 6) SA 295( GNP) where the court held, amongst others, that once the total charges referred to in section 101( 1)( b) to( g) equal the amount of the unpaid balance, payments made by a consumer thereafter during the period of default do not have the effect of permitting the credit provider to charge further interest while such default persists. It further held that the amount which Randburg Finance will ultimately receive through the consent agreement is clearly in excess of what Randburg Finance is entitled to receive, taking into account the statutory in duplum rule.
4. In the matter between Maria Magdalen Olyn and African Bank Ltd, Capitec Bank Ltd and Nedbank Ltd( NCT / 286 / 2009 / 138( 1)( P))
The case involved an application for the confirmation of a debt re-arrangement agreement in terms of Section 86( 8)( a) read with section 138( 1) of the NCA. The applicant was the consumer who applied for debt review in terms of the NCA. The debt counsellor found the applicant to be experiencing difficulty satisfying all obligations under her credit agreements in a timely manner.
The debt counsellor recommended a restructuring of the payment instalments to all credit providers. All credit providers consented to the recommendation.
The Tribunal expressed concern over the interest rate charged by one of the credit providers in the consent order. The transaction between the applicant and Capitec Bank was an unsecured credit transaction. Capitec Bank was entitled to charge 35,4 % per annum in terms of the National Credit Regulation 42( Table A). Capitec Bank was charging an interest rate of 37 % per annum. This concern was raised by the Tribunal, mero motu, ie without it being raised by any of the parties.
Annual Report 2011 page 38 | national consumer tribunal