Victory for consumer rights
Business / 04 Dec '12, 3:28pm
Johannesburg - Consumer rights have received a major boost with a recent Supreme Court of Appeal (SCA) decision, the National Credit Regulator said on Tuesday.
The SCA ruled in favour of the National Credit Regulator (NCR) against Standard Bank, for overcharging on administration fees on home loans granted under the Usury Act.
File photo: Adrian de Koc. Credit: Independent Newspapers
It stipulated that money lenders could not charge a fee of more than R5, excluding VAT, for administration.
The Usury Act has since been repealed by the National Credit Act (NCA).
However, the NCA includes transitional provisions relating to pre-existing agreements, and some of its provisions apply to pre-existing credit agreements which would have been subject to the NCA had it been in effect when the agreements were concluded.
The SCA held that Standard Bank was not entitled to charge an administration fee greater than that allowed by the Usury Act on home loans which existed at the time the NCA came into operation, until the fee is amended under the powers conferred by section 105(1) of the NCA.
NCR legal adviser Annemarie Friedman said the section indicated that the trade and industry minister could prescribe a method of calculating fees contemplated by the act.
“Since the NCA came into operation, the minister has not increased the home loan administration fees and the maximum of R5
is therefore still applicable,” she said.
Friedman said consumers who entered into home loan agreements prior to June 1, 2007, with mortgage amounts less than R500,000 should check their bank statements to establish whether they had been overcharged on their home loan administration fees.
If so, they should approach the NCR or Standard Bank. - Sapa