The tribunal handed down a judgment in favour of the National Credit Regulator (NCR) against a Humansdorp micro lender trading as JMK Cash Loans, finding them guilty of a host of illegal practices, including:
- Charging excessive interest – more than 30% per month, when the legal limit is 5% per month for six months;
- Retaining their clients’ Sassa and bank cards along with their PIN codes;
- Operating despite their registration with the NCR having lapsed; and
- Not conducting affordability checks.
The business was ordered to pay a fine of R800,000 within 30 days.
“It appears that (JMK Cash Loans) has ignored the requirements of the National Credit Act and exploited consumers who appear to lack knowledge about their consumer rights,” the tribunal said in its judgment.
It emerged during the joint investigation by Sassa, the Hawks and the Eastern Cape’s consumer protection office that child support and foster care social grants were being regarded as loan applicants’ income.
“This judgment clarifies that child support and foster care social grants are not to be used as consumer income in credit applications,” said the NCR’s CEO, Nomsa Motshegare. “Credit providers are warned to observe this judgment.”
