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Some enter into takeover agreements without the written consent of their banks. This sometimes prejudices the consumer because he or she remains liable to the bank until the car is paid for in full.
Sonwabile Fisa is one such consumer. He still owes Wesbank for a vehicle he no longer possesses and the dealer to whom he handed the car, Wayne Fester, has not paid the settlement figure to the bank as agreed.
Fisa, 27, does not know where his car is and cannot reclaim it from Fester because he has already sold it to a third person. Fisa now has a bad credit record against his name as a result.
He discovered that the car had not been paid up when he tried to buy a house a month ago.
He claims Fester had always lied about the whereabouts of the car and his commitment to pay off the amount owed to his bank when calling him on his cellphone.
His lawyers sent the sheriff of the court to Fester's house, only to discover there was no such address.
Fisa said he notified the bank about his problem and was told he remained liable for the balance owed since there was no law in South Africa that allowed the bank to claim money from the unscrupulous dealer.
Fisa's problems started in January last year when he traded in his Corsa bakkie. He owed R75000 when he met Fester in January but the amount had risen to R88000.
"He told me he no longer owned a trading place, but had a market for second-hand cars," Fisa said.
Three months later Fisa gave him his bakkie when Fester told him he had found a buyer for the vehicle.
"He even showed me an FNB deposit slip showing "uncleared", making me believe it was payment for my car," Fisa said.
He was later told the amount owed on his car would be settled in two days. That was five months ago, Fisa said.
Believing that his car had been settled he bought a Golf 5 after his application for finance was approved.
"I was shocked when a Wesbank official called to tell me I was behind with my payments. It was only then that I learnt I had entered into an illegal transaction with Fester," Fisa said.
He threatened to report Fester to the police and, to pacify him, Fester gave him a contract in which he undertook to settle the car before the end of May.
"The contract was back-dated to April 15 2010, which is the time he took the car, and that was the last time I saw him," Fisa said.
Until today Fester has not settled payment for his car, Fisa said.
Fester told Consumer Line that Fisa was delaying the process.
He said he would have settled his account long ago, but Fisa did not respond to his request for a statement showing the settlement amount.
He promised to settle the balance once Consumer Line had sent him the settlement statement, which we did. But at the time of going to print he had not settled Fisa's account.
Sam Tebele of Consumer Affairs said there was no law that compelled dealers to pay off loans on trade-in vehicles they accept.
When that happened the person who traded in the vehicle remained responsible for the loan, even though they no longer possessed the car.
Tebele said it was not advisable for consumers to hand over their cars to people who promised to take over the instalments without written permission from their financiers.
Tebele said the office of Consumer Affairs had also received complaints from one consumer in which a car dealer kept the money after selling a vehicle following a trade-in agreement.
Dealers had even disappeared with customers' cars after negotiating take over agreements, leaving them to pay outstanding loans on cars not in their possession.
"Consumers shouldn't see their credit and financial future destroyed by unscrupulous or dishonest business practices," Tebele said.
"When consumers trade in their vehicles they certainly don't expect and should not continue to be strapped with the loan on it."