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“Return your car or review credit agreement,” advises Banking Ombudsman

todayOctober 25, 2023 133

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The Banking Ombudsman says motorists who are struggling to make ends meet should consider returning their vehicle to the bank or renegotiating their credit agreement.
The advise comes amid a warning from the South African Reserve Bank Deputy Governor, Fundi Tshazibana, about a possible interest rate hike next month.
Last month, the Monetary Policy Committee decided to keep the interest rate steady at 8.25% for a second consecutive meeting.

Tshazibana says there are too many risks to the inflation outlook to declare that further interest-rate increases won’t happen.

The high rates affect loan repayments and business spending, among others.

Ombudsman for Banking Services (OBS), Reana Steyn, says reviewing one’s credit agreement or return a vehicle will help consumers not to default on payments, which will have a negative impact on many other aspects.

The consequences listed by Steyn include:

Adverse information will be listed on a defaulting individual’s credit report, limiting their ability to access further credit in the future;

• Legal action may be taken against the defaulting person, resulting in them being liable for the additional legal costs, and a judgment recorded against their name;  and

• The vehicle may be repossessed and sold on auction. The debtor will remain liable for the shortfall should the auctioned asset not sell for the full outstanding balance. Meaning, you will have to continue paying for a vehicle finance debt, without even having the vehicle to drive.

Steyn, who deals with vehicle related complaints on a daily basis, says consumers who run the risk of having their vehicles repossessed should also know that they also have rights.

“You have the right to refuse entry to anyone who is not a Sheriff of the Court and who does not have an original court order. Should unlawful techniques be used, consumers are advised to record them and report them to the OBS and the SAPS,” she adds.

Yires are further advised to go to the Ombudsman for Banking Services for disputes relating to outstanding balances on the vehicle finance account; unfair treatment by banks and their debt collectors or tracers; unilateral changes of the contractual terms and conditions; prescription related disputes.

OBS’ Kwanda Vabaza’s elaborates in the clip:

 

Various quarters have lamented the rising interest rates in the country, with labour federation, SAFTU, calling on the Reserve Bank to change its policy rate trajectory, saying it is worsening living conditions, whilst pretending to be defending the buying power of workers’ wages.

 

Written by: Lindiwe Mpanza

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