Capitec bank has been hauled to court for alleged abuse of short term credit facilities or profiting from charges for cheques not done.
The complainant, Summit Financial Partners, has claimed that the bank's practices amounted to reckless lending and brought in unjustified profits.
In 2013, the National Credit Regulator (NCR) launched the similar case with the Consumer Tribunal. Lesiba Mashapa, NCR Secretary, says they lost the case in 2013 because the Tribunal said they needed to have suspicion that Capitec was doing something wrong.
The complaint was launched with us sometime last year. We investigated the complaint and referred it to Consumer Tribunal. But I must also say that in 2013, the NCR initiated an investigation into Capitec, and we refereed that complaint to the tribunal. The problem that we encountered from the tribunal was the interpretation of our investigation powers. The tribunal said because we didn't have a reasonable suspicion that Capitec was doing anything wrong when we initiated the 2013 complaint, they decided to declare that complaint and investigation invalid.— Lesiba Mashapa, National Credit Regulator Secretary
It was an issue of different interpretation between us and Capitec. What we found was that Capitec would enter into one agreement with a consumer, and in terms of that agreement the consumer, and in terms of that agreement that's signed only once, the consumer would be entitled to loan starter revolving. In terms of the act, the initiation fee can only be charged for that one agreement. So if there are any subsequent loans that are drawn down on that agreement, our interpretation is that initiation fee can no longer be charged.— Lesiba Mashapa, National Credit Regulator Secretary
In our findings, we found that it's consumers who were merely confirming that their financial circumstances have not changed since the signing of the credit agreement.— Lesiba Mashapa, National Credit Regulator Secretary
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