There’s nothing quite like a lawyer’s letter to terrify the average consumer into paying up. But a legal process is a fairly costly route for a company, which is why some have been known to resort to making their debtors think attorneys are involve when they are actually not.
Wonga in the UK – described by the media in that country as a “payday loan giant” – went that route in a big way a few years ago. It has paid dearly for it: £2.6 million (R47m) in fact.
Dozens of people have responded to last week’s Consumer Watch column on the “New car from R699 per month” deal, most of them owners of those branded cars, who have in recent months also received a drastically reduced “advertising fee”, for no apparent reason and with no consultation.
But the Satinsky Group of Companies – which masterminded the deal whereby their clients’ monthly car repayments are subsidised by carrying advertising on their cars’ back windows – will not be drawn on that issue at all, instead accusing some clients of making “fraudulent representations”.
To thousands of South Africans, the “Drive a new car for R699 a month” deal seemed like the perfect solution to their “want-a-new-car-but-can’t-afford-it” dilemma.
You get a new car, with a 100 percent loan from one of the banks, making you responsible for the full repayment amount every month, but you offset that expense by signing a second contract with Hong Kong-based Blue Lakes Trading and Promotions, in terms of which you get paid a sizeable amount every month in exchange for turning your car’s back window into an in-your-face moving billboard advertisement, mostly for the scheme itself.