Our legal team loves taking on lenders and collectors who exploit consumers with excessive fees and abusive collection practices. In the past few years, we’ve actively changed the garnishee and credit industries by exposing irregularities and taking dodgy lenders to court.
Join the fight. Become a Consumer Champion. To follow our fights, email: protect@summitfin.co.za
Summit is seeking a Declaratory Order from the Court to clarify which fees should be included in the so-called Statutory In Duplum rule set out in section 103(5) of the National Credit Act (NCA).
Under common law, the In Duplum rule protected consumers from being charged more than double the principle amount owed when they fell into arrears – but the rule only applied to interest charges.
Section 103(5) of the NCA explicitly expanded this rule to include a cap on all charges listed in section 101 of the Act: capital amount, interest charges, initiation fee, service fees, collection costs, and default administation charges.
Although a reasonable interpretation of this section implies that legal fees incurred in the debt collection process would be included in the Statutory In Duplum cap, collecting attorneys have resisted this interpretation and asserted that the “Collection Costs” mentioned in the Act refer to non-legal fees, and that their legal fees are to be excluded.
As a result, high legal fees charged on arrears accounts have resulted in consumers paying far more than double their outstanding amount.
We believe this goes against the intentions of section 103(5) of the NCA and are asking the court to clarify the correct interpretation. The case is expected to be heard in August 2019.
Summit joined forces with Wendy Appelbaum and the Stellenbosch Law clinic in a case that brought garnishee (emolument attachment orders) abuse to the attention of the Constitutional Court.
As a result, the Constitutional Court handed down a ground-breaking judgment in September 2016 that rewrote sections of the Magistrate’s Court Act to ensure a fairer garnishee process for consumers. Now, a garnishee order can only be issued by a Magistrate in the district where the consumer lives or works, and millions of consumers are taking home more of their hard-earned pay.
Reckless lending was introduced by the National Credit Act to place a responsibility on credit providers to help prevent over-indebtedness. However, reckless lending regulations are rarely enforced through our courts or Regulators.
Summit is seeking to raise awareness and create legal precedent by escalating various reckless lending matters to the courts and continuing to place pressure on credit providers to take responsibility for their role in South Africa’s debt epidemic.
Two mashonisas (loan sharks) targeting mining employees in the Platinum belt area were arrested on criminal charges after Summit investigated their unlawful behaviour.
Kurie Cash Loans demanded that consumers hand over their bank cards and pin numbers as security until their micro loans were paid up. This highly exploitative practice is prohibited by section 89 of the NCA. Summit appointed a private investigator who built a strong enough case to have Kurie’s owner arrested on criminal charges.
A-Fana Cash Loans granted micro loans to unemployed or disabled consumers on condition that the consumers hand over their Sassa social grant cards. This allowed A-Fana to withdraw funds directly from the consumers’ social grant funds, leaving consumers without any income, and wholly dependent on A-Fana for more credit. Summit alerted the National Credit Regulator and A-Fana’s owner was arrested on criminal charges.