Contravention of the Credit Act – ABSA bank

 

Money grabbing while under debt review

We recently had a case where ABSA bank was a creditor in a consumers application for debt review, where the bank completely contravened  the National credit Act and in specific section 86.

 

Section 86 talks about how both consumer and creditor must enter into and or handle the debt review application with the same mutual respect

The facts of this case is briefly as follows.

The consumer applied for debt review with us

We established that the consumer was indeed over indebted and proceeded with a formal application for debt review

The consumer was listed on the NCR web portal that in turn lists the consumer on all eleven credit bureaus in South Africa. The consumer status would reflect as “Applied for debt review and is being formally assessed”

This listing should in a perfect world immediately reflect on the credit bureaus as well as update the consumer’s status at any and all credit providers that the consumer is a client of. In other words the bank in this case should have picked up immediately that the consumer is under debt review

Furthermore the Act is very specific in terms of giving any unfair advantage to any creditor. This advantage can be the result of three scenarios

1 The consumer pays a certain creditor extra in a payment schedule. This payment then falls outside the arranged or proposed payment that a creditor should receive under debt review

2. The debt counselor deliberately arranges the repayments so that one creditor gets more (in ratio) to the others
3. The credit provider deducts or keeps on deducting money from the consumers account and in turn receives the deducted payment as well as the debt review proposed or agreed amount

 

In our case Absa bank deducted money from the consumers account knowingly and with knowledge that the consumer has applied for debt review

Although the Act clearly states that all debit orders must be cancelled if a consumer applies for debt review, this never happens.

 

Consequently we had major telephonic and written conversations between the branch, the Absa debt review department, the Absa debt review department manager, the NCR and the consumer without any success.

The non compliance by ABSA and the blunt refusal to work with us in good fait as well as in my opinion contravention of the Act resulted in Help with Debt ;lodging a complaint against ABSA with the NCR complaints department

Turnaround time for ABSA to review any written correspondence is 10 to 14 working days

Our dilemma is that the consumer paid his debt review installment but as a result of ABSA bank deducting from his account unlawfully he is now under immense financial strain

I will keep posting replies to this post as to what happens as it happens.