We act on behalf of Ms D Solomon, an adult female debt counsellor (NCRDC 689) who practices within the Western Cape and a member of The Debt Counselling Industry CC trading as theDCI.co.za, which is a web based portal offering services and support to debt counsellors and consumers.
At the outset, we must point out that the press release was made on behalf of theDCI and the views expressed therein were made by Ms Solomon on behalf of theDCI and not in her capacity as a debt counsellor. Our clients have provided us with a copy of your letter dated 11 August 2014 and have requested us to address this correspondence to you and we shall address the issues raised in the aforesaid correspondence utilising the same numbering:
1. The contents of this paragraph are noted. Our clients shall deal with the alleged disparaging comments made about the National Credit Regulator (the NCR) below.
2. Our client denies that the comments made in relation to the NCR are unfounded, baseless and without substance. The statement, comments and opinion expressed by theDCI in the press release were made truthfully, fairly and in the public interest.
3. Unfortunately you have misconstrued the purpose of the press release.
3.1. Our client never intended to suggest, and with respect, neither does the press release statement on a reasonable reading thereof suggest that the problems experienced by African Bank were caused only by reckless lending and the NCR’s failure to investigate such reckless lending.
3.2. Our client is aware that there are various micro and macro economic factors which played a part in the downfall of African Bank, but respectfully submits that the main underlying cause of the downfall is as has been widely reported in the press, the business model of African Bank which is based on the provision of unsecured loans to members of public.
3.3. It is common cause that the investigations of the NCR into the activities of one of the branches of African Bank in Kwa-Zulu Natal resulted in African Bank being found guilty of contravening the reckless lending provisions of the National Credit Act. The statement that the
“regulator had “seriously erred” in not launching a full-scale investigation into the lending practices of the bank’s 630 branches around the country at the time”
is with respect truthful, fair comment and within the public interests. It would have been reasonable to expect that if one of the branches of African Bank had been found guilty of the aforesaid contravention, that the NCR should have investigated the other branches of African Bank in order to determine whether or not there were similar contraventions.
3.4. Our client, however, believes that had the NCR properly perform its functions in light of the investigations which it had conducted into the business of African Bank that it would have resulted in:
3.4.1. possible further reckless lending activities being exposed, and/or
3.4.2. preventing further reckless lending contraventions, and/or
3.4.3. the losses suffered would have been reduced, and/or
3.4.4. the suitability of the registration of African Bank as a credit provider would have been re-assessed.
4. Our client believes that the fine ultimately imposed by the NCR on African Bank is disproportionate to the contraventions of the National Credit Act.
4.1. The statement made by our client regarding the severity of the fine is the reasonable and justifiable view held by our client.
4.2. Our client views the issue of reckless lending as a serious concern in the economy and believes that this is one of the key areas in which the NCR should be concentrating. In light of the aforesaid, our client believes that the fine agreed upon between the NCR and African Bank is not a sufficient deterrent to other credit providers in order to prevent reckless lending, nor is a fine, in our clients view, sufficient in the circumstances where our client believes that the NCR should have performed further investigations into the activities of African Bank.
4.3. We invite you to provide, within 5 (days) of date hereof, the factors which were taken into consideration when agreeing to the settlement in relation to that investigation. Upon receipt of the aforegoing our client will consider the possible retraction of the statement if there are grounds to do so.
5. Our client acknowledges that the NCR has taken certain steps in relation to investigation and enforcement of the provisions of the National Credit Act.
5.1. Our client, however, believes which belief is supported by similar views expressed by other industry stakeholders that the NCR has failed over the years to properly investigate various complaints regarding contraventions of the National Credit Act.
5.2. Our client believes that the NCR is under a duty to be more pro-active and has failed in the proper investigation and enforcement of the provisions of the National Credit Act. A case in point is the failure of the NCR to investigate the other branches of African Bank when the outcome of the initial investigation clearly called out for a full-scale investigation.
5.3. Our client is aware of the proposed affordability assessment rules for credit providers and the draft regulations published in respect thereof. Our client believes that the NCR should have taken these steps earlier and should have, given the various complaints lodged with the NCR over the past years, have taken a more pro-active stance.
6. Our client denies that the media statement has brought the NCR into disrepute and/or that the statements are a breach of Ms Solomon’s conditions of registration as a debt counsellor. The contents of the media statement are true and were made in the public interest, alternatively expressed a reasonable and fair comment and opinion by our client. The contents of the media statement were made by theDCI and not by our client in her capacity as a debt counsellor.
7. Our client accordingly sees no need to withdraw the statements, but theDCI would on receipt of facts and circumstances which indicate that the statements are not true and/or not in the public interest publish a further media statement to clarify.
Kindly could you address all further correspondence in this matter to our office for writer’s attention.
K J BREDENKAMP
CC: MS Kedilatile Email email@example.com