The judgment in the case brought against the bank by the National Credit Regulator (NCR), means that banks cannot take money from your current account to pay off credit card debt.
Benay Sager, chief operating officer of debt counselling firm DebtBusters, says you shouldn’t overlook the fact that, although the banks can no longer claim credit card debt from another account, the debt is still owed.
The common law set-off applies when two parties owe each other and the debt of one is set off by the debt of the other. The banks have applied this by transferring funds deposited into your bank accounts to settle debt on a credit agreements without your authorisation.
The NCR had sought an order from the high court that the common law set-off has been superseded by section 124 of the NCA, and the court found in favour of the regulator.