A Supreme Court of Appeal (SCA) judgment that found against the National Credit Regulator (NCR) in relation to alleged excessive service fees by a credit provider will not have massive implications for consumers.
This was according to the NCR, after the SCA dismissed its action against Getbucks, which the NCR charged had contravened Regulation 44 of the National Credit Regulations.
The NCR in 2014 launched proceedings in the National Consumer Tribunal against Getbucks alleging that it had contravened Regulation 44 by charging excessive service fees.
In response Getbucks launched high court proceedings, seeking an order prohibiting the NCR from prosecuting it in the tribunal, on the basis that Regulation 44 was unlawful/invalid because it had not been promulgated according to the correct procedure.
The SCA recently held that because a section required a 30-day period for comment and this had not been allowed, the Minister of Trade and Industry had not been empowered to promulgate the regulation and the NCR was barred from invoking it against Getbucks. The minister took no part in the appeal.
“The regulation could only have been promulgated under s11. The requirement was that the Gazette allow a period of at least 30 business days for the submission of comments. This requirement was not complied with,” the SCA found. “The power of the minister to make the regulation thus did not arise under s11. The net effect of all of this is that the promulgation of the regulation was ultra vires the power of the minister. The regulation was accordingly not validly promulgated.”
The NCR this week said the SCA judgment only has an impact on credit agreements entered into before September 14, 2015 – the date on which the 2015 regulations came into effect.
“Moreover, it only has an impact on service fees charged under those credit agreements during that time period. Credit agreements entered into after and/or service fees charged after that time period, will be governed by the 2015 regulations. The SCA judgment in Getbucks, while disappointing, will not have ‘massive implications’ nor will it be a ‘massive problem’ for consumers,” the regulator said.
Getbucks did not respond to requests for comment.
Cape Times