Consumers in South Africa are offered a wide range of protection in the form of legislated consumer rights. These rights have been developed and applied over the years into the framework that we know today, notes the Banking Ombud.
“Over the years, this has been vital; particularly in the financial services sector,” said Reana Steyn, the Ombudsman for Banking Services. “Despite these rights, over the past few years, we have seen that there are major corporates and scam artists that are very willing to take advantage of the public without a second thought.”
However, the Act also recognises the banks’ right to refuse to enter into an agreement with a consumer provided that the reasons for the refusal are reasonable and consistent with the law and the banks’ risk appetite. Since the OBS’ findings were that the bank received, considered, and later declined the consumer’s application in line with the relevant applicable provisions of the NCA, no wrongdoing could be established on the part of the bank.
Steyn reminded consumers that they have the right to negotiate with credit providers, and preferably shop around, especially if the interest rate that is being offered is not in line with what the consumer deems fair. Section 124 of the National Credit Act now regulates set off in respect of credit agreements regulated by the NCA. The aim of Section 124 is to safeguard the rights of consumers in the set off process by giving the consumer a say in the way in which the set off is applied.
Ms Y deposited her child’s school fees in the cheque account and later realised that the bank had debited over R3,700 without her prior knowledge nor consent. Another R700 was again debited from her account without her consent. She requested for the bank to refund the amounts, but the bank refused. The matter was then reported to the OBS to investigate.
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