National Credit Regulator v The Loan Company (Pty) Ltd (NCT/140518/2019/140(1)) [2021] ZANCT 24 (21 July 2021)

National Credit Regulator v The Loan Company (Pty) Ltd (NCT/140518/2019/140(1)) [2021] ZANCT 24 (21 July 2021)

The Tribunal found that the Respondent entered into pawn transactions with consumers, not secured loan transactions. Section 89 of the NCA does not apply to pawn transactions, but the Respondent was required to be registered as a credit provider before entering into any credit agreements. The Respondent contravened section 40(1) read with section 40(3) of the NCA by entering into credit agreements prior to registration. The Tribunal held that the Respondent repeatedly contravened sections 92(1), 93(2), 100(1)(a), 100(1)(c), 101(1), and 101(1)(d)(ii) of the NCA and associated regulations by charging prohibited fees, failing to use prescribed forms, and overcharging interest. The Respondent...

Citation
[2021] ZANCT 24
Parties
Applicant: National Credit Regulator; Respondent: The Loan Company (Pty) Ltd
Court
National Consumer Tribunal
Jurisdiction
South Africa
Judgment Date
21 July 2021
Case Number
NCT/140518/2019/140(1)
Procedural Posture
Administrative Application / Final Judgment After Hearing
Outcome
The Tribunal declared the Respondent in repeated contravention of the NCA, declared certain credit agreements unlawful and void, ordered restitution and compensation to affected consumers, mandated the appointment of an independent auditor, and imposed an administrative fine of R250,000.
Judges
D Terblanche, K Moodaliyar, N Maseti
Legal Topics
National Credit Act, Credit Provider Registration, Pawn Transactions, Prohibited Fees and Charges, Advertising of Credit, Administrative Fine
Banking and Finance Commercial and Corporate Civil Procedure National Credit Act Credit Provider Registration Pawn Transactions Prohibited Fees and Charges Advertising of Credit +1 more

Case Brief

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Parties

National Credit Regulator

Applicant

The Loan Company (Pty) Ltd

Respondent

Procedural Posture

Administrative Application / Final Judgment After Hearing

Legal Issues

  1. 1 Whether the Respondent contravened section 40(1) read with section 40(3) of the National Credit Act by entering into credit agreements before registration as a credit provider.
  2. 2 Whether the Respondent's agreements with consumers were pawn transactions or secured loan transactions under the NCA.
  3. 3 Whether the Respondent contravened sections 92(1), 93(2), 100(1)(a), 100(1)(c), 101(1), and 101(1)(d)(ii) of the NCA and associated regulations by charging prohibited fees, failing to use prescribed forms, and overcharging interest.

Ratio Decidendi

The Tribunal found that the Respondent entered into pawn transactions with consumers, not secured loan transactions. Section 89 of the NCA does not apply to pawn transactions, but the Respondent was required to be registered as a credit provider before entering into any credit agreements. The Respondent contravened section 40(1) read with section 40(3) of the NCA by entering into credit agreements prior to registration. The Tribunal held that the Respondent repeatedly contravened sections 92(1), 93(2), 100(1)(a), 100(1)(c), 101(1), and 101(1)(d)(ii) of the NCA and associated regulations by charging prohibited fees, failing to use prescribed forms, and overcharging interest. The Respondent...

Court Disposition

The Tribunal declared the Respondent in repeated contravention of the NCA, declared certain credit agreements unlawful and void, ordered restitution and compensation to affected consumers, mandated the appointment of an independent auditor, and imposed an administrative fine of R250,000.

Orders

  • The Respondent is declared in repeated contravention of section 40(1) read with section 40(3), section 76(3), sections 92(1) and Regulation 28 read with Form 20, section 93(2) and Regulation 28 read with Form 20.2, section 100(1)(c) and 101(1)(d)(ii) read with Regulation 40, and sections 100(1)(a) and 101(1) of the...
  • The Respondent’s repeated contraventions are declared prohibited conduct under section 150 of the NCA.