Thuli Zungu
In a landmark decision, the National Consumer Tribunal has decided it is unacceptable for financial institutions to sell repossessed or surrendered vehicles for next to nothing, when they could use trade or book values to determine the amount.
Frans Duma of Cape Town surrendered his car when he realised he could not keep up with repayments.
He was not in arrears and as a responsible consumer, he looked for a buyer willing to buy the car for R99000, but Motor Finance Corporation (MFC) rejected his offer.
MFC then sold Duma's vehicle for R54000 and later demanded the shortfall of R74 000 from him.
Duma approached the National Consumer Tribunal to intervene and he won his case.
He is now liable for the shortfall he was willing to pay in the first place had MFC agreed to sell his car for R99000 to his prospective buyer.
The tribunal reminded MFC that a consumer who has voluntarily surrendered his goods can unconditionally withdraw the notice to terminate the agreement and resume possession of any goods that he has surrendered.
Therefore, MFC was under no pressure to sell his car as there was a provision allowing him to resume possession.
MFC offered to pay the shortfall of R40000 they had caused Duma, plus compensation of R6000 for expenses he had incurred in his appeal process.
l See pages 10, 11
Consumer wins case against financier
Thuli Zungu
In a landmark decision, the National Consumer Tribunal has decided it is unacceptable for financial institutions to sell repossessed or surrendered vehicles for next to nothing, when they could use trade or book values to determine the amount.
Frans Duma of Cape Town surrendered his car when he realised he could not keep up with repayments.
He was not in arrears and as a responsible consumer, he looked for a buyer willing to buy the car for R99000, but Motor Finance Corporation (MFC) rejected his offer.
MFC then sold Duma's vehicle for R54000 and later demanded the shortfall of R74 000 from him.
Duma approached the National Consumer Tribunal to intervene and he won his case.
He is now liable for the shortfall he was willing to pay in the first place had MFC agreed to sell his car for R99000 to his prospective buyer.
The tribunal reminded MFC that a consumer who has voluntarily surrendered his goods can unconditionally withdraw the notice to terminate the agreement and resume possession of any goods that he has surrendered.
Therefore, MFC was under no pressure to sell his car as there was a provision allowing him to resume possession.
MFC offered to pay the shortfall of R40000 they had caused Duma, plus compensation of R6000 for expenses he had incurred in his appeal process.
l See pages 10, 11
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