The University of Cape Town on Tuesday morning confirmed reports that “four cars were set alight at .
If you are a credit provider and have not cleaned up your unfair business practices, you will soon be out of the market. Ask Chatspare Financial Services - they are longer in the business of providing credit to consumers.
The National Consumer Tribunal says the days of credit providers who are getting away with unfair and abusive lending practices are over.
This much was confirmed by one of the first cases at the tribunal, when the National Credit Regulator (NCR) recouped R630000 in favour of aggrieved consumers.
Jan Augustyn, manager for investigations and prosecutions at the NCR, said the regulator received 17 complaints about the lending practices of Chatspare.
Augustyn said the complainants were granted loans against their life policies and investments, and this distressed them because it resulted in them losing their policies due to non-payment.
"The main area of concern was that Chatspare provided loans to these complainants under the exemptions of the Usury Act, which did not allow a credit provider to give a loan of more than R10000," said Augustyn.
Chatspare did not fully explain all the terms and conditions of the loan agreements, he said. It did not use the correct interest rates when these consumers took loans.
Chatspare's mode of operation is exemplified in Joe Phike, who wanted a loan of R40000. But this amount was split into four instalments, giving Chatspare the benefit of high interest.
He had used his investment policy worth R600000 as security.
Phike repaid R160000 over two years for the loan.
Chatspare also surrendered his policy and paid themselves R311.
Phike battled to get the difference until he took up the matter with the NCR.
The tribunal ordered Chatspare to repay his money plus interest of 15,5percent per annum from February.
He received R250000 plus interest after the NCR's intervention.
Since the NCR investigation started, Chatspare has refunded R1,2million to aggrieved consumers, said Augustyn.
In the case of 13 other complainants, the tribunal granted the NCR a consent order, in terms of which Chatspare is to repay R503212,42.
The other three cases were withdrawn by the NCR, but with a proviso that Chatspare would repay R107000 to the three consumers.
"Chatspare is no longer in the business of providing credit," said Augustyn.