Volkswagen Financial Services SA (Pty) Ltd v National Credit Regulator (NCT/94937/2017/56(1)) [2019] ZANCT 175 (4 April 2019)

Volkswagen Financial Services SA (Pty) Ltd v National Credit Regulator (NCT/94937/2017/56(1)) [2019] ZANCT 175 (4 April 2019)

The Tribunal found that the applicant, as credit provider, is responsible under the National Credit Act for ensuring that only permissible fees are charged to consumers in credit agreements. The 'on the road', administrative, and handling fees are not included in the closed list of charges permitted by sections 101 and 102 of the NCA and thus constitute prohibited charges under section 100(1)(a). The applicant's argument that these fees were simply passed through from the dealer was rejected; the credit agreement itself imposed these charges on consumers. Furthermore, the fees were inaccurately disclosed as 'Service & Delivery Charge' in the credit agreement, which misled consumers and...

Citation
[2019] ZANCT 175
Parties
Applicant: Volkswagen Financial Services South Africa (Pty) Ltd; Respondent: National Credit Regulator
Court
National Consumer Tribunal
Jurisdiction
South Africa
Judgment Date
4 April 2019
Case Number
NCT/94937/2017/56(1)
Procedural Posture
Review Application / Final Determination After Hearing
Outcome
The compliance notice issued against the applicant is confirmed as modified. The applicant is ordered to cease charging the impugned fees, refund affected consumers, and submit audited reports. No order as to costs.
Judges
D Terblanche, M Peenze, B Dumisa
Legal Topics
National Credit Act Compliance, Prohibited Credit Fees, Consumer Protection, Disclosure Requirements, Principal Debt Calculation
Banking and Finance Commercial and Corporate National Credit Act Compliance Prohibited Credit Fees Consumer Protection Disclosure Requirements Principal Debt Calculation

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Parties

Volkswagen Financial Services South Africa (Pty) Ltd

Applicant

National Credit Regulator

Respondent

Procedural Posture

Review Application / Final Determination After Hearing

Legal Issues

  1. 1 Whether the applicant charged consumers 'on the road', administrative, and handling fees in contravention of the National Credit Act.
  2. 2 Whether such fees are permitted to be charged or included in the principal debt under sections 100, 101, and 102 of the NCA.
  3. 3 Whether the fees were inaccurately or misleadingly disclosed in credit agreements contrary to section 92(2) of the NCA.

Ratio Decidendi

The Tribunal found that the applicant, as credit provider, is responsible under the National Credit Act for ensuring that only permissible fees are charged to consumers in credit agreements. The 'on the road', administrative, and handling fees are not included in the closed list of charges permitted by sections 101 and 102 of the NCA and thus constitute prohibited charges under section 100(1)(a). The applicant's argument that these fees were simply passed through from the dealer was rejected; the credit agreement itself imposed these charges on consumers. Furthermore, the fees were inaccurately disclosed as 'Service & Delivery Charge' in the credit agreement, which misled consumers and...

Court Disposition

The compliance notice issued against the applicant is confirmed as modified. The applicant is ordered to cease charging the impugned fees, refund affected consumers, and submit audited reports. No order as to costs.

Orders

  • From 10 April 2019, the applicant must cease charging consumers 'on the road', administrative, and handling fees on credit agreements and submit written confirmation to the respondent by 25 April 2019.
  • The applicant must submit a list of all consumers charged these fees since 2007, including the number of consumers and total amount charged.