Fin24

Decision a boost for consumer rights

2012-12-04 15:56

Bloemfontein - Consumer rights have received a major boost with a recent Supreme Court of Appeal (SCA) decision, the National Credit Regulator said on Tuesday.

The SCA ruled in favour of the National Credit Regulator (NCR) against Standard Bank, for overcharging on administration fees on home loans granted under the Usury Act.

It stipulated that money lenders could not charge a fee of more than R5, excluding VAT, for administration.

The Usury Act has since been repealed by the National Credit Act (NCA).

However, the NCA includes transitional provisions relating to pre-existing agreements, and some of its provisions apply to pre-existing credit agreements which would have been subject to the NCA had it been in effect when the agreements were concluded.

The SCA held that Standard Bank was not entitled to charge an administration fee greater than that allowed by the Usury Act on home loans which existed at the time the NCA came into operation, until the fee is amended under the powers conferred by section 105(1) of the NCA.

NCR legal adviser Annemarie Friedman said the section indicated that the trade and industry minister could prescribe a method of calculating fees contemplated by the act.

"Since the NCA came into operation, the minister has not increased the home loan administration fees and the maximum of R5 is therefore still applicable," she said.

Friedman said consumers who entered into home loan agreements prior to June 1, 2007, with mortgage amounts less than R500 000 should check their bank statements to establish whether they had been overcharged on their home loan administration fees.

If so, they should approach the NCR or Standard Bank.

Comments
  • colin.taylor.9883 - 2012-12-04 16:07

    Good news. Banks charge way too much for admin and service fees. Not that we get any SERVICE from the banks.

      ruan.smith.14 - 2012-12-04 16:40

      Agreed!!

      jannie.beirowski - 2012-12-04 17:01

      You are correct in specifying "Banks". Mine has been charging me R28.50 pm. Outrageous! I will read to them from the good book!

      darren.raath.5 - 2012-12-04 17:07

      nedbank charges me an admin fee of R49 per month on my bond,a maintenance fee of R48 per month on my chq account which is over and above services fee of a couple of 100 rand per month.

  • JohnLove123 - 2012-12-04 16:29

    More bad news to follow for Standard Bank early 2013....watch this space:)

  • SarelJBotha - 2012-12-04 16:44

    Every home owner should ask the following from their bank: 1. Return of the original instrument(s) of indebtedness in return for full payment of the loan. 2. Bank to state under oath whether they are still the legal holder of the note and loan. 3. whether the loan has been securitized? They will most probably duck and dive. Hopefully you will then decide to actually try and found out what it is they hide from you.

  • linda.horsfield.77 - 2012-12-04 17:04

    Finally the courts are realising that banks are just legalised thieves! Firstly, why do they even charge an administration fee? The only "administration" they do is accept a monthly payment into the account, usually done by debit order. They dont send out monthly statements, and they are earning more than enough interest to cover all costs related to the loan account. Multiply the R40.00 that Standard Bank charges to "administer" a bond account by the hundreds of thousands (possibly millions) of bond accounts - and you will see the obscene profit that they are making - for doing nothing in return other than robbing their clients blind!

      michangel.justice - 2012-12-05 15:25

      yet so many applaud the fact that SA have an excellent banking system. HYPOCRITES. with reference been made to http://www.fin24.com/Economy/Trouble-ahead-for-SA-banks-warns-Moodys-20121205

  • arthur.salvado - 2012-12-04 17:08

    Maybe other banks should be looked into. I shall certainly look into and audit my bank.

  • theMichaelHawthorne - 2012-12-04 18:04

    Absa charged me R20 000 for administration fees on a R60 000 sale with a R20 000 deposit!!! They are criminals just like Zuma!

      africa.simo - 2012-12-04 18:36

      Absa is the biggest calprit when it comes to over charging it consumers. I appeal to the NCA to look into all the charges that are charged by our banks whether they legally or are they overcharging us the consumers.

  • stefan.ferreira.984 - 2012-12-05 07:17

    I also pay R 49 per month admin fee for my home loan at Nedbank.

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