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Credit provider shut down

By unknown | Oct 15, 2008 | COMMENTS [ 0 ]

Thuli Zungu

Thuli Zungu

The National Credit Regulator will no longer tolerate credit providers who trample on the rights ofconsumers.

In a landmark ruling, the National Consumer Tribunal ordered that Frabert (Pty) Ltd - trading as Cashwise Frabert - be stripped of its trading licence.

Frabert had a loan book valued at about R3,1 million and 9900 borrowers. It defied the law by retaining consumers' bank cards and pin codes as a mechanism for collecting or enforcing credit agreements.

Jan Augustyn, a manager, investigator and prosecutor at the National Credit Regulator (NCR), said the tribunal gave an order in their favour because the Act prohibits such practices.

"The National Credit Act prohibits such practice and any credit provider that contravenes the practice is guilty of an offence," said Augustyn.

Frabert operated in Northern Cape. The credit provider had 11 registered branches throughout the province.

Augustyn said that on investigation, the NCR found numerous bank and pension cards at Frabert's offices. It issued a compliance notice, but Frabert ignored it.

A follow-up probe revealed continuing non-compliance and the matter was referred to the tribunal for determination, Augustyn said

He said once a credit provider's registration was cancelled, the provider could not engage in any formerly registered activities.

The NCR has ordered Frabert to return the bank and pension cards to the debtors. Non-compliance with an order of the tribunal is a criminal offence punishable with a fine or imprisonment for a period not exceeding 10 years, or both.


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