The Credit Ombud assisted more than 70 percent of consumers who complained to his office last year, the 2015 annual report of the Credit Ombud Nicky Lala-Mohan, which was released this week, shows.
Of the five case studies carried in the Credit Ombud’s annual report, two related to reckless lending. (See “Ombudsmen take on reckless lenders”.)
The following three case studies show how the Credit Ombud’s office can help you.
VEHICLE SOLD ON AUCTION
Mr N contacted the office of the Credit Ombud, Nicky Lala-Mohan, for help getting his vehicle back after he had voluntarily surrendered it to the credit provider that provided his vehicle finance. Although he had brought the arrears on his account up to date, his vehicle was sold on auction by the credit provider. He had remained in constant contact with the credit provider, yet he had not been notified by the credit provider that it had decided to sell his vehicle. He was aggrieved because he had not been given the opportunity to prevent this from happening. He owed the balance on the account but did not have the vehicle.
Mr N wanted the credit ombud to help him regain ownership of the vehicle or help him settle the shortfall that arose from its sale.
The ombud’s investigations found that Mr N was heavily in arrears on his instalments when he voluntarily surrendered the vehicle to the credit provider.
The credit provider told the ombud that it had notified the consumer of the valuation of the vehicle via registered post and, when there was no response from him – to arrange for settlement of the outstanding balance – the credit provider proceeded to sell the vehicle on auction.
When the ombud called for a copy of the letter and proof of the despatch to the consumer, it was established that Mr N had not received proper notification in respect of the valuation of the vehicle or the amount the vehicle was subsequently sold for. In light of this, the credit provider and Mr N entered into a voluntary agreement that the shortfall amount of R107 095 would be written off and Mr N’s profile at the credit bureaus would be updated.
FRAUDULENT ACCOUNT
The ombud’s office received a complaint from Ms B disputing a bank account [in her name] on the grounds that it had been acquired fraudulently. She noticed the existence of the account in her credit report. In accordance with the credit ombud’s normal dispute processes, it notified her that there were other accounts reflecting negatively on her reports. As a result, these accounts were also placed in dispute due to fraud.
The ombud asked the banks to investigate. The first bank confirmed that Ms B was indeed the victim of fraud. As a result, the information was removed from her profile at the credit bureau and she was no longer held liable to pay the R52 000 owing in the account.
The second bank also confirmed that two accounts had been opened fraudulently. Ms B was not liable to pay the R19 000 in loans, which were acquired fraudulently.
CREDIT LIFE COVER SHORTFALL
When Ms M’s parents died in 2003, the outstanding balance of their home loan with the credit provider was about R37 000. Although there was credit life insurance on the account, it paid out only R33 000. There was thus a small shortfall of about R4 000 on the account.
Ms M inherited the property. She lodged a complaint with the credit ombud when she received a letter of demand many years later for the shortfall on the account, together with accrued interest.
The credit ombud negotiated on behalf of Ms M and an affordable settlement was reached. A few months later Ms M received her title deed.
STATISTICS
Inquiries and complaints: 12 312
Disputes opened: 4 522
Disputes closed: 5 074
Findings in favour of consumers: 67 percent
Money back in consumers’ pockets: R7.5 million
Biggest category of complaints: Service disputes
Most complained about credit provider: the ombud is not able to publish this information.