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DTI lacks staff for investigations

Cape Town û Minister of Trade and Industry, Alec Erwin, has admitted in parliament that the department does not have enough inspectors to attend speedily to the many complaints submitted monthly concerning the conduct of financial institutions.

The department is criticised mainly for its laxity in clamping down on banks which reportedly regularly infringe on the Usury Act by charging more interest on home loans than is permissible.

One of the allegations made is that the department does not take action on the hundred or so infringements of the act that have already been reported to it.

In response to a question in the National Assembly, Erwin said that the department has 42 approved posts for inspectors but that only 28 of these have been filled. Only 21 of the inspectors are involved with inspection work while the other 7 are involved in administrative work.

Apart from the fact that there are very few people performing inspection work at a national level, the implementation of the Usury Act is only one of their many duties.

They also have to deal with infringements in terms of credit agreements, sales and service problems, unfair business practices, tracking down counterfeits, ensuring that the development programme of the motor industry is implemented, keeping an eye on South Africa's trade agreements with other countries, and ensuring that there is compliance with the provisions of the Company Act.

In his response to a further question by Mahomed Cassim of the IFP, as to whether the Registrar of the Usury Act was being investigated by the Public Protector following complaints by the public that there had been no response to their requests, Erwin said that the Public Protector was in contact with the Registrar regarding the complaints.

According to person who brought the complaint, he had been trying since 1996, without success, to get the registrar to do something about his complaint concerning a particular bank.

According to Erwin, however, the bank had refuted most of the allegations against it. Someone else had levelled the same complaint about another bank. The problem, in these instances, is that those involved had already taken legal action against the banks on their own initiative and the department was reluctant to get involved.

Concerning other allegations that "hundreds" of files in connection with possible prosecutions against banks had gone missing, Erwin said it was correct that "some" files had been misplaced. This is apparent from court documents in which the department itself had been accused.

It is, however, no foregone conclusion that the files concerned are related to any court case against banks. Efforts are now being made to trace the files or to open new ones if they cannot be found.

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