WesBank disagrees with regulator over unfair credit practice

Cape Town - WesBank disagrees with the National Credit Regulator (NCR) that it coaxed defaulting consumers into handing over their cars, it said on Thursday.

NCR referred the matter to the National Credit Tribunal, alleging that Wesbank is in breache of the National Credit Act (NCA). This following an investigation, into the Wesbank’s debt collection practices, which commenced in 2014.

Wesbank, a division of FirstRand Bank Limited, is one of South Africa’s leading vehicle and asset finance providers. The NCR claims the bank, through its debt collection agents, coaxed defaulting consumers into relinquishing possession of their motor vehicles.

“This procedure undermines the voluntary nature of the surrender process,” NCR’s manager for investigations and enforcement, Jacqueline Peters, said in a statement.

However, Wesbank said the referral does not constitute non-compliance with the NCA, but is instead a result of differing interpretation of the applicable legislation.

"WesBank respects the Regulator’s decision to refer the matter to the National Consumer Tribunal, however, disagrees with the conclusions reached by the National Credit Regulator in its application," it said in a statement.

WesBank said it has given its full cooperation with the NCR, over the duration of the investigation, which commenced in 2014.

"WesBank has a strong commitment towards achieving fair treatment of our customers and will continue to cooperate with the National Credit Regulator and the National Consumer Tribunal."

The NCA allows consumers under an installment agreement, lease or secured loan to surrender the goods that they had purchased under these credit agreements.

“The voluntary surrender procedure provided in the National Credit Act is one of the options available to a consumer who is in default under a credit agreement. The consumer also has the right to apply for debt review,” Peters said.

“The typical example is motor vehicles that are bought under installment sale agreements which can be returned voluntarily by defaulting consumers to credit providers.”

Peters added that credit providers can only repossess a motor vehicle from the consumer if there is a court order authorising the credit provider to do so.