If you bought financial products from Platinum Telecash, you may be in line for a refund of "excessive charges" that were levied in contravention of the National Credit Act (NCA) after the National Credit Regulator (NCR) slapped the company with a compliance notice this week.
According to the company's website, Platinum Telecash sells "an interest-free revolving line of credit similar to an overdraft", prepaid airtime, cellphone top-up contracts with "relaxed credit criteria" and funeral assurance.
After an investigation, the NCR found that Platinum Telecash had contravened the NCA by:
- Not taking reasonable steps to ensure that clients understand the risks and costs of its credit agreements, and their rights and obligations under a credit agreement;
- Failing to assess consumers' debt repayment histories; and
- Failing to assess consumers' financial means or obligations.
Consumers who enter into credit agreements with Platinum Telecash are also being charged fees that contravene the NCA. These include monthly membership fees, monthly product fees, monthly credit facility fees, monthly subscription fees, once-off product registration fees and/or annual card fees. Other contraventions of the NCA include:
- Illegal provisions in credit agreements where "their general purpose is ? to mislead consumers that fees and charges apply whether or not the consumer makes use of the facility";
- Charging initiation fees that exceed the permitted maximum of 15 percent of the initial principal debt or credit facility;
- Not properly notifying consumers of charges;
- Levying service fees in advance and not only at the end of the month to which they relate; and
- Charging reverse debit fees of R29 for unpaid debit orders.
The NCR has ordered Platinum Telecash to:
- Check its clients' ability to afford its products;
- Stop levying fees or charges that contravene the NCA;
- Change the provisions of its credit agreements so that they are no longer unlawful;
- Notify consumers of charges to their accounts; and
- Levy service fees only at the end of the relevant month.
The company has 30 business days to provide the NCR with a written affidavit by director Bob Lafite that it has:
- Changed the provisions of its credit agreements;
- Appointed a registered chartered accountant to assess and report on its compliance with the NCA; and
- Submitted a report to the NCR that identifies all its clients who have been charged illegal charges and excessive initiation fees since June 2007.
Platinum Telecash has been given a further deadline of 60 business days, from September 8, to refund all clients who were charged incorrectly and to provide confirmation by an auditor that the amounts have been refunded.
A representative of the company, Johrika Jenkins, told Personal Finance that Platinum Telecash is taking the necessary steps to ensure that it complies with the NCA.
Earlier this year, a reader, A Mapolisa, told Personal Finance that he had been sold three products by Platinum Telecash: Money Call (a credit product), Telecash (a credit product) and Mobijubba (airtime).
The call centre consultant told Mapolisa that Money Call was a savings product. Mapolisa was told that he would pay a once-off registration fee of R99 and a weekly fee of R49.95. In exchange, a "loyalty bonus" of R1 000 would be paid into his bank account every three months.
Platinum Telecash later admitted that Money Call had been "misrepresented", because it is in fact a credit product. Mapolisa was refunded R2 125.35.
If you have any complaints about credit agreements you have with Platinum Telecash, you can contact the NCR on 0860 627 627.