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Mpungane v Addcon (Pty) Ltd and Others (NCT/289/2009/138(1) (P)) [2010] ZANCT 48 (6 May 2010)

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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy


IN THE NATIONAL CONSUMER TRIBUNAL,

HELD IN PRETORIA


CASE No: NCT/289/2009/138(1) (P)

DATE:06/05/2010


In the matter between

THEMBINKOSI CHRISTOPHER MPUNGANE..............................Applicant /Consumer

and

ADDCON (PTY) LTD....................................................1st Respondent/ Credit Provider

CAPITEC BANK LIMITED............................................2nd Respondent/Credit Provider

EDGARS A DIVISION OF EDCON (PTY) LTD.............3rd Respondent/Credit Provider

VALUE FURNISHERS..................................................4th Respondent/ Credit Provider


The application was facilitated by the debt counsellor Lorenco Lewis



JUDGMENT


1. INTRODUCTION

1.1 The Applicant is a consumer who applied for debt review in terms of the National Credit Act 34 of 2005 (the Act). The debt counsellor representing the debtor is Lorenco Lewis. The Applicant is applying for a consent order in terms of section 86(8) read together with section 138 of the Act.

1.2 The debt counsellor found that the Applicant was experiencing difficulty satisfying all obligations under his credit agreements in a timely manner.

1.3 The debt counsellor recommended a restructuring of the payment instalments to all credit providers, as per the agreement which is attached hereto marked "Annexure A".

1.4 All the respective credit providers (Respondents to this consent order) consented to this agreement.



2. APPLICATION FOR CONSENT ORDER

  1. The Applicant applied for a consent order on 9 December 2009. The Tribunal expressed concern regarding the interest rate which Capitec Bank Limited (a Respondent) was charging the Applicant in the consent order. The matter was adjourned in order for the Tribunal to subpoena the contract which the Applicant concluded with Capitec Bank.

  2. The matter commenced again on 21 April 2010. The Tribunal had received the relevant contract from Capitec Bank.


3. THE CAPITEC BANK CONTRACT

The documents received from Capitec Bank establish that the Applicant signed two contracts on 14 October 2008 in order to receive loans from Capitec Bank. The first contract (loan contract number 1181057130) was for a loan of R22 250.00 which was repayable over a twelve month period. The annual interest rate for this first loan, as stipulated in the contract, was 39 percent. From the consent order it appears that this is the loan which is in default.


The second contract was for a loan of R3660.10 (loan contract number 1159125323). This loan had to be repaid within one month. This second contract was therefore for a short term credit transaction. The interest rate recorded for this second loan was 60 percent per annum. This is contrary to the National Credit Act which states that the maximum prescribed interest rates for short term credit transactions (which is a credit transaction for loans which do not exceed R8 000 and which are repayable within a period not exceeding 6 months) is 5 percent per month. The Act also states that such interest must be disclosed as a monthly interest rate (National Credit Act Regulation 42 (1) (b)).


4. THE CONSENT AGREEMENT

The consent agreement attached to the application for a consent order indicates that the Applicant owes Capitec Bank R20 848, 96. This is in respect of the first contract. The Applicant has agreed to repay this amount over a period of 39 months at an annual interest rate of 37 percent per annum. The debt counsellor representing the Applicant has indicated that Capitec Bank will not agree to a reduction of the interest rate.


5. CONSIDERATION

The loan granted to the Applicant in terms of the contract (which is the subject of this consent order) concluded between the Applicant and Capitec Bank constitutes an unsecured credit transaction. When such a loan is granted, credit grantors are entitled to charge maximum rates of interest according to the formula for such loans as set out in Regulation 42 Table A. The legislature has expressed the maximum interest rate which may be charged as a formula rather than as a fixed rate. This means that when the Reserve Bank Repurchase Rate (repo rate) is reduced, credit grantors are obliged to reduce the interest which they are charging particular consumers, if the rates are higher than the maximum amount as allowed in terms of the Regulation. A calculation, based on the applicable formula, indicates that the maximum amount of interest which the credit grantor can charge at the present time is 34.30 percent. The interest set out in the consent agreement is in excess of this amount.


6. CONCLUSION

The application for a consent order is refused and the Tribunal makes the following order:


The matter is referred to the National Credit Regulator in order to investigate whether there is prohibited conduct on the part of Capitec Bank. The Regulator is requested to report back to the Tribunal within a period of one month from the date of this judgment regarding its findings.


T WOKER


Handed down on this 6 day of May 2010



IN THE NATIONAL CONSUMER TRIBUNAL
HELD AT CENTURION


Case No:

In the matter between:

MPUNGANE, THEMBINKOSI CRISTOPHER..................CONSUMER/lst APPLICANT

Identity number: ...

And

ADDCON (PTY) LTD.......................................1st RESPONDENT/CREDIT PROVIDER

CAPITEC BANK LIMITED............................2ND RESPONDENT/CREDIT PROVIDER

EDGARS a division of EDCON (PTY) LTD...3RD RESPONDENT/CREDIT PROVIDER

VALUE FURNISHERS....................................4th RESPONDENT/CREDIT PROVIDER



DRAFT CONSENT ORDER IN TERMS OF SECTION 86 (8) READ TOGETHER

WITH SECTION 138 OF THE NATIONAL CREDIT ACT 34 OF 2005



WHEREAS:

a. The consumer applied for debt review in terms of the National Credit Act 43 of 2005;

b. The debt counsellor found that the consumer is experiencing difficulty satisfying all obligations under the credit agreements in a timely manner;

c. The debt counsellor recommended a restructuring of the payment instalments to all the credit providers, as per the agreement which is attached hereto marked:

"Annexure B";

d. All the respective credit providers and the consumer/applicant consented to this agreement, which consents are hereto attached marked "Annexure C

NOW THEREFORE:

The Tribunal, being satisfied that the Applicant and Respondent are parties to a debt rearrangement facilitated by a debt counsellor under section 86{7) of National Credit Act, hereby orders, by consent of the parties:

1; That the payment structures of the agreement between the Applicant and the Respondents as set out in Annexure "B", be made an order of the National Consumer Tribunal;

2. Which agreement restructures the payment instalment by extending the payment period as indicated in Annexure "C"




Creditor

Reference

Annual Interest

New Monthly

..instalment. ...

Balance

Estimated Period in Months . .

ADOCON (PTY) LTD

4808964

25.90%

R426.39

R12 221.53

33

ADOCON (PTY) LTD

4808825

25.90%

R432.66

R6 075.25

20

CAPITEC BANK LIMITED

1181057130

39.00%

R660.94

R20 848.96

39

EDGARS a division of EDCON (PTY) LTD

7000100100011121423

21.00%

R105.97

Rl 224.34

18

VALUE FURNISHERS

014-01823

15.50%

R233.85

R2 344.47

15



DATED at Centurion this the day of .2009



REGISTRAR OF THE NATIONAL CONSUMER TRIBUNAL


Applicant/Consumer

Debt Counsellor on behalf of the Consumer


TO:


THE REGISTRAR OF THE TRIBUNAL CENTURION


1. ADDCON (PTY) LTD

ESPLANADE BUSINESS SUITE

8 CLIFFORD STREET

QUIGNEY

PO BOX 1S92

EAST LONDON

5200


2. CAPITEC BANK LIMITED
PO BOX 12451

DIE BOORT

STELLENBOCH

7613


3. EDGARS a division of EDCON (PTY) LTD
EDGARDALE PRESS AVENUE

PO BOX 200

CROWN MINES

2025