National Credit Regulator v Mathusa Batho Financial Services CC (NCT/212864/2021/57(1)) [2022] ZANCT 37 (7 September 2022)

National Credit Regulator v Mathusa Batho Financial Services CC (NCT/212864/2021/57(1)) [2022] ZANCT 37 (7 September 2022)

The Tribunal found that the Respondent repeatedly contravened the National Credit Act and its Regulations by failing to conduct proper affordability assessments prior to granting credit. The Respondent did not obtain or assess consumers' income, living expenses, or debt repayment history, and failed to obtain credit bureau reports before entering into credit agreements. These failures resulted in reckless lending and the approval of credit agreements with consumers who were already over-indebted or unable to afford repayments. The Tribunal accepted the Applicant's uncontested evidence and concluded that the Respondent's conduct amounted to prohibited conduct under the Act. The Tribunal...

Citation
[2022] ZANCT 37
Parties
Applicant: National Credit Regulator; Respondent: Mathusa Batho Financial Services CC
Court
National Consumer Tribunal
Jurisdiction
South Africa
Judgment Date
7 September 2022
Case Number
NCT/212864/2021/57(1)
Procedural Posture
Review Application / Judgment
Outcome
Application granted in part; Respondent's registration as a credit provider cancelled; identified credit agreements set aside as reckless; appointment of independent auditor ordered; no administrative fine imposed; no order as to costs.
Judges
MC Peenze, H Alwar, C Sassman
Legal Topics
National Credit Act, Reckless Lending, Affordability Assessment, Credit Provider Registration, Prohibited Conduct
Banking and Finance Civil Procedure National Credit Act Reckless Lending Affordability Assessment Credit Provider Registration Prohibited Conduct

Case Brief

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Parties

National Credit Regulator

Applicant

Mathusa Batho Financial Services CC

Respondent

Procedural Posture

Review Application / Judgment

Legal Issues

  1. 1 Whether the Respondent repeatedly contravened the National Credit Act and its Regulations by failing to conduct proper affordability assessments before granting credit.
  2. 2 Whether the Respondent engaged in reckless lending and entered into reckless credit agreements with consumers.
  3. 3 Whether the Respondent's registration as a credit provider should be cancelled and whether an administrative fine or appointment of an auditor is appropriate.

Ratio Decidendi

The Tribunal found that the Respondent repeatedly contravened the National Credit Act and its Regulations by failing to conduct proper affordability assessments prior to granting credit. The Respondent did not obtain or assess consumers' income, living expenses, or debt repayment history, and failed to obtain credit bureau reports before entering into credit agreements. These failures resulted in reckless lending and the approval of credit agreements with consumers who were already over-indebted or unable to afford repayments. The Tribunal accepted the Applicant's uncontested evidence and concluded that the Respondent's conduct amounted to prohibited conduct under the Act. The Tribunal...

Court Disposition

Application granted in part; Respondent's registration as a credit provider cancelled; identified credit agreements set aside as reckless; appointment of independent auditor ordered; no administrative fine imposed; no order as to costs.

Orders

  • The Respondent has repeatedly contravened section 81(2)(a)(ii) and (iii) read with Regulation 23A, and section 81(3) read with section 80(1)(a) and 80(1)(b)(ii) of the National Credit Act.
  • The repeated contraventions are declared prohibited conduct in terms of section 150(a) of the Act.