THE office of the National Credit Regulator will investigate whether Shiras Motors complied with the National Credit Act when selling a minibus to a customer in June 2010.

This follows the Sowetan's article in which we highlighted the plight of an illiterate and widowed woman who Shiraz Motors allegedly defrauded.

Geqezile Ntombela was refunded her R30,000 last Thursday, hours after the publication of the story.

Shiras Badat of Shiraz Motors apologised profusely for any inconvenience they might have caused Ntombela. He also offered to pay 21 months interest which had accrued to Ntombela's money while in Shiraz Motors' account. Over and above this, Badat agreed to pay the travelling costs Ntombela incurred going to and from their dealership trying to recover her money.

After receiving her cheque, a grateful Ntombela said: "I have refused to take the interest they offered because I wanted to get the correct amount and a go ahead from you (Consumer Line) first."

Ntombela's headache began in June 2010 when she went to Shiraz Motors to buy a minibus. This was after her taxi-owner husband died and she had to take over the business.

Ntombela and her son raised R45,000 for a deposit on a Siyaya (Toyota) minibus worth R215,000.

She said Badat told her to raise another R10,000 before she could take delivery of the vehicle, and told her to get a loan from a taxi association to avoid penalties because "she could not cancel the contract as it was legally binding".

The loan was approved and was payable with R3,000 interest over six months, Ntombela said.

She got her minibus but a month later Ntombela got a shock when she discovered that she owed SA Taxi Securitisation R347,127. They were also demanding an instalment of R8,000.

With the help of her daughter, Ntombela discovered that Shiraz Motors had paid only R25,000 to SA Taxi Securitisation.

Her copy of the contract had inaccurate information - the documents had a lesser amount than the one supplied to the financier, she said.

Koketso Tlou, an inspector at the offices or the National Credit Regulator said they will be investigating Ntombela's account.

He said the fact that Shiraz Motors had refunded Ntombela her money, with interest, does not stop the National Credit Regulator from investigating the alleged unfair business practice. He said their office had a duty to investigate such matters.

WHAT CONSUMERS NEED TO KNOW ABOUT THE NCA:

The National Credit Act specifies a list of fees, charges and interest to which the credit provider is entitled.

The fees chargeable: In terms of section 101 of the act, a credit agreement must not require payment of any money or other consideration except for:

* The principal debt, plus the value of an item.

* An initiation fee, chargeable in respect of the initiation of the agreement and may not exceed the prescribed amount relative to the principal debt.

* A service fee, chargeable, may not exceed the prescribed amount relative to the principal debt, and such fees in the case of the credit facility are payable monthly or annually on a transaction basis or on a combination of periodic and transaction basis and in any other case, such fees may be payable monthly or annually.

* Interest chargeable, cost of any credit insurance, default administration charges are chargeable only when the consumer has defaulted on a payment obligation.

This amount should not be in excess of the prescribed maximum amount.

* Collection fees are chargeable when the credit provider has to use debt enforcement proceedings to compel the consumer to pay.