PHEHELLO Mokoena will not have to repay R329,994 for a R71,000 loan, thanks to Consumer Line.
Old Mutual has agreed to cancel all Mokoena's costly additional amounts.
The father of three was going through financial problems as well as mourning the death of a relative when he approached Old Mutual for a loan.
The person who assisted him to secure the loan included two additional benefits that increased the repayment to R329,994 over five years, Mokoena says.
He claims the agent did not explain what his loan entailed.
"I was also not allowed to read the documents before signing them," Mokoena says.
He says he raised his concern at the end of the first month when he noticed that the repayment amount was too high, but no one was willing to help.
He says the agent refused to cancel the cash support amount and the annual essential needs amount in February when he noticed how expensive his loan had become.
"I knew there was something wrong because the repayment was more than 250%," he says.
Mokoena's loan was structured in such a way that he would received a monthly allowance of R1,000 and an annual payment of R14,000.
For this he was charged interest of R88,110 over the loan term.
In addition he had to take insurance cover for R585 for his loan and this premium was included in his monthly instalment, Mokoena says.
The single parent insists that a lot of information was not disclosed to him.
"Otherwise I would not have entered into the agreement," Mokoena says.
Stuart Marshall of Old Mutual's finance section tells Sowetan that Mokoena knew what his plan entailed.
He says specific dates for the annual essential needs were specified in the credit agreement that Mokoena signed, leading him to believe that there was certainly some discussion around the amount that he needed.
Marshall listed some of the measures used to ensure that clients are well informed :
- Manager's review, in which applications are checked by the branch manager
- Manager's interview, in which clients are interviewed by a branch manager to ensure that they understand their contracts.
- Their compliance call centre calls between 10% and 20% of clients to check that they understand what they have bought.
"All contracts are discussed with clients before signing and we believe them when they confirm that they understand.
"Clients also receive contracts for record purposes setting out the loan amounts, interest, dates they will receive annual needs and monthly cash support," Marshall says.
Loan became too costly
PHEHELLO Mokoena will not have to repay R329,994 for a R71,000 loan, thanks to Consumer Line.
Old Mutual has agreed to cancel all Mokoena's costly additional amounts.
The father of three was going through financial problems as well as mourning the death of a relative when he approached Old Mutual for a loan.
The person who assisted him to secure the loan included two additional benefits that increased the repayment to R329,994 over five years, Mokoena says.
He claims the agent did not explain what his loan entailed.
"I was also not allowed to read the documents before signing them," Mokoena says.
He says he raised his concern at the end of the first month when he noticed that the repayment amount was too high, but no one was willing to help.
He says the agent refused to cancel the cash support amount and the annual essential needs amount in February when he noticed how expensive his loan had become.
"I knew there was something wrong because the repayment was more than 250%," he says.
Mokoena's loan was structured in such a way that he would received a monthly allowance of R1,000 and an annual payment of R14,000.
For this he was charged interest of R88,110 over the loan term.
In addition he had to take insurance cover for R585 for his loan and this premium was included in his monthly instalment, Mokoena says.
The single parent insists that a lot of information was not disclosed to him.
"Otherwise I would not have entered into the agreement," Mokoena says.
Stuart Marshall of Old Mutual's finance section tells Sowetan that Mokoena knew what his plan entailed.
He says specific dates for the annual essential needs were specified in the credit agreement that Mokoena signed, leading him to believe that there was certainly some discussion around the amount that he needed.
Marshall listed some of the measures used to ensure that clients are well informed :
"All contracts are discussed with clients before signing and we believe them when they confirm that they understand.
"Clients also receive contracts for record purposes setting out the loan amounts, interest, dates they will receive annual needs and monthly cash support," Marshall says.
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