National Credit Regulator v Cash Squeeze (Pty) Ltd (NCT/136842/2019/140(1)) [2019] ZANCT 167 (31 October 2019)

National Credit Regulator v Cash Squeeze (Pty) Ltd (NCT/136842/2019/140(1)) [2019] ZANCT 167 (31 October 2019)

The Tribunal found that Cash Squeeze's business model, which involved advancing funds to consumers against their vehicles and disguising the transactions as sales and rentals, constituted simulated secured credit agreements. These agreements fell squarely within the ambit of the National Credit Act and required compliance with its provisions, including registration as a credit provider, conducting affordability assessments, and adhering to prescribed interest rates and charges. Cash Squeeze failed to comply with these requirements, charged exorbitant fees, and inserted prohibited provisions. The Tribunal held that all allegations by the NCR were deemed admitted due to the respondent's...

Citation
[2019] ZANCT 167
Parties
Applicant: National Credit Regulator; Respondent: Cash Squeeze (Pty) Ltd
Court
National Consumer Tribunal
Jurisdiction
South Africa
Judgment Date
31 October 2019
Case Number
NCT/136842/2019/140(1)
Procedural Posture
Prohibited Conduct Application / Default Judgment
Outcome
Application granted. Cash Squeeze found to have engaged in prohibited conduct under the NCA. Agreements declared reckless and set aside. Administrative fine imposed. Interdict and reimbursement orders granted.
Judges
J Simpson, L Best, A Potwana
Legal Topics
National Credit Act, Reckless Credit, Affordability Assessment, Administrative Fine, Prohibited Conduct
Banking and Finance Civil Procedure National Credit Act Reckless Credit Affordability Assessment Administrative Fine Prohibited Conduct

Case Brief

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Parties

National Credit Regulator

Applicant

Cash Squeeze (Pty) Ltd

Respondent

Procedural Posture

Prohibited Conduct Application / Default Judgment

Legal Issues

  1. 1 Whether Cash Squeeze's 'pawn your car and still drive it' scheme constitutes prohibited conduct under the National Credit Act.
  2. 2 Whether the agreements entered into by Cash Squeeze are simulated transactions intended to circumvent the NCA.
  3. 3 Whether Cash Squeeze failed to conduct affordability assessments and charged unlawful interest and fees.

Ratio Decidendi

The Tribunal found that Cash Squeeze's business model, which involved advancing funds to consumers against their vehicles and disguising the transactions as sales and rentals, constituted simulated secured credit agreements. These agreements fell squarely within the ambit of the National Credit Act and required compliance with its provisions, including registration as a credit provider, conducting affordability assessments, and adhering to prescribed interest rates and charges. Cash Squeeze failed to comply with these requirements, charged exorbitant fees, and inserted prohibited provisions. The Tribunal held that all allegations by the NCR were deemed admitted due to the respondent's...

Court Disposition

Application granted. Cash Squeeze found to have engaged in prohibited conduct under the NCA. Agreements declared reckless and set aside. Administrative fine imposed. Interdict and reimbursement orders granted.

Orders

  • The Respondent is interdicted from entering into any further credit transactions with consumers or contravening the NCA.
  • All credit agreements entered into between consumers and the Respondent are declared reckless. All consumer obligations under these agreements are set aside. All consumers are to be reimbursed with all fees and charges paid to the Respondent under those agreements.