JOHANNESBURG - Volkswagen Financial Services South Africa became the second company in a month to feel the wrath of the National Credit Regulator (NCR) after it was issued with a compliance notice for charging consumers an on-the-road fee, administration fee and handling fee on credit agreements.
This month the NCR also issued BMW Financial Services with a compliance notice for the same offences.
The NCR said these fees were not permitted to be charged on credit agreements by the National Credit Act.
NCR chief executive Nomsa Motshegare said the compliance notice instructed Volkswagen Financial Services South Africa to refund consumers and submit an audit report to the NCR.
Volkswagen Financial Services South Africa failed to respond by the time of Business Report going to deadline.
“The National Credit Act allows consumers to be given a quotation which sets out the cost of credit before signing credit agreements. Consumers should request this quotation from their credit providers so that they can properly check the cost of credit that is being offered,” Motshegare said.
Going forward the NCR said it would continue to conduct industry-wide investigations on the cost of credit to root out illegal charges and fees that consumers are charged.
“Credit providers are reminded that it is a criminal offence to charge consumers fees and charges that are prohibited by the National Credit Amendment Act of March 2014,” the statutory body said.
The NCR is responsible for the regulation of the South African credit industry and is an entity of the Department of Trade and Industry.
When the National Credit Act came into effect, it established the National Credit Regulator (NCR) to oversee the regulation of the credit industry in South Africa.
Unscrupulous
One of the most important tasks of the NCR is to monitor credit practices and deal with complaints from consumers regarding unfair credit practices.
In doing so, it's enforcing the rights developed for consumers in the National Credit Act of South Africa, and rooting out unscrupulous credit practices.
The NCR said the companies tended to prey on unsuspecting customers.
“It is obviously to boost their revenues and the NCR is committed to root out these illegal charges,” Motshegare said.