Rudco fails to repay lenders before NCR deadline
Rudco, the company that has been attracting a lot of interest by advertising home loans with an interest rate of six percent fixed for 20 years, this week failed to repay money it collected from would-be lenders in contravention of the National Credit Act (NCA) and the Usury Act, as it was instructed to do by the National Credit Regulator (NCR).
The NCR had already referred the matter to both the National Prosecuting Authority (the Scorpions) and the National Consumer Tribunal, the body set up to adjudicate in cases where credit providers contravene the law. This week, at a pre-trial conference at the tribunal, a new repayment deadline of November 22 was set, the NCR’s Advocate Jan Augustyn says.
Rudco is obliged to give the NCR a report on its progress towards repaying some 1 800 people who applied for its debt consolidation loans by November 13. The tribunal will reconvene on November 23.
In August, the NCR issued a compliance notice to Rudco stating that it had taken monthly service fees and loan repayments from consumers who applied for its debt consolidation loans before advancing these loans and that this was in contravention of the NCA and the Usury Act.
In addition, the NCR said the company had charged loan applicants monthly fees in excess of the prescribed R57 a month, its advertisements were misleading and it had not provided consumers with quotes for its loans as required in terms of the NCA.
The NCR ordered Rudco to stop taking repayments and fees before loans had been advanced and to repay loan applicants the amounts it had collected from them in contravention of the law.
Apparently, Rudco has been collecting repayments from loan applicants to establish whether they are disciplined repayers for up to nine months and has only in some cases provided funds to settle some of the applicants’ existing debts and consolidate these into a single loan.
Manie van Schalkwyk, the Credit Information Ombud, announced this week that the black-listing amnesty has been extended.
If you have an outstanding judgment against you from before September 2006 of less than R50 000 and you repay the amount before December 31 this year, the judgment information will be removed from your records with the credit bureaus.
(Persfin, 3 November 2007)
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