ONE of the biggest banking institutions in South Africa, Standard Bank, has been accused of stealing and overcharging clients who defaulted on their mortgage loan payments.
This was after the bank overcharged a couple on their mortgage interest loan.
This was after the couple, Patrick Anthony and Polin Anthony, defaulted on their mortgage payments for their home in Forest Hill, Gauteng.
On August 29, 2023, Standard Bank debited an amount of R124 047.34 from Anthony’s family bank account after allegedly increasing the interest rate of prime -1% to 1% from August 1, 2009.
However, this allegedly resulted in an overpayment of R135 301.30.
The amount was calculated by the family representative and financial investigating consultant Emerald van Zyl, who said the overpayment was revealed by an independent actuary.
The prime rate is the minimum interest rate at which banks are willing to lend. This will be the repo rate plus what the bank charges to make a profit.
Van Zyl said Standard Bank allegedly increased the prime rate through internal policy. He said this was illegal because the National Credit Regulator does not allow it.
He said the Standard Bank usually does this when clients default on their payments.
The couple has requested Standard Bank to pay back the money into their account, but the bank refused.
Van Zyl said this has affected the couple financially.
Van Zyl also wrote to Standard Bank evaluation manager Fritz Loggenburg, requesting him to also make calculations and refund the couple.
However, in an email sent to van Zyl on September 7, the Loggenberg said the bank reinstated the rate concession on the couple’s account and also credited the clients’ home loan account with R124 047.34.
However, van Zyl argued: “Dear Fritz, on 28 September 2023, the client received a credit in the amount of R124 047.34. This refund was due to the fact that Standard Bank, due to an internal policy, illegally increased the interest rate by 1%. Kindly note that the client wants Standard Bank to deposit that amount into his private account. If the account is in arrears, please deduct that amount and pay the balance into their private account,” read van Zyl’s email.
On September 15, Loggernberg wrote another email: “The refund of service fees and interest was credited to the home loan account as the service fees were charged to the home loan account. There are, therefore, no funds available to credit to the client's personal account.”
However, van Zyl argued again: “Dear Fritz, the amount refunded was for the reason that Standard Bank illegally increased the agreed interest rate from prime -1 to prime. Therefore, the amount is due and payable to the client. If there was any arrears, that amount can be deducted, and the balance paid into the clients' private account.”
But Loggenberg said irrespective of whether the overcharge was a service fee or interest, the account on which the overcharge was made needs to be credited with the overcharged amount.
In this particular case, Loggenberg said, the overcharge of interest was on the home loan account. Therefore, the home loan account was credited.
Van Zyl responded: “The amount overcharged was because of a breach of the agreement by Standard Bank by increasing the agreed interest rate from prime -1% to prime. Therefore, the amount overcharged is due to the client.
I do have an internal memorandum stating that from 2008, it became an internal policy of Standard Bank to increase rates and terms of the loan when client defaulted with payments,” he said.
He said the amount was illegally charged to the client’s mortgage account and, therefore, due to the client and not to be credited to the mortgage loan.
Asked for a comment, Standard Bank spokesperson Ross Linstrom said the bank can’t share customer details with third parties, adding that the comment will be sent to the client, who will share it with the Sunday Independent.
However, on Friday, Linstrom said they had been struggling to get hold of the customer and said the response would be sent to van Zyl. However, van Zyl said he did not receive a message from the bank.
Van Zyl added that the banks were disclosing mortgage clients who defaulted on their payments because they could not afford the instalments, which increased by 55% because of the increase in the prime rate.
He said last month, 26 homeowners’ legal actions were stayed because of overcharges.