A man who bought his car while he was employed on a short-term contract is accusing Motor Finance Corporation, a division of Nedbank Limited, for reckless lending.
Milfort Maphuti Moloto bought a Hyundai H100 2.6D in March 2020 through Nedbank while he was employed on a 10-month contract.
The collectable loan was over R484,000 and it was repayable in instalments over sixty months and had a balloon payment, which became payable immediately after the sixty months.
The crux of Moloto’s argument lies in the assertion that his financial situation at the time of the loan approval was not adequately considered by the bank.
In his application, at the National Consumer Tribunal (NCT), Moloto alleged that since the overall collectable amount was over R484,000 and his total earnings for the 10 months were over R530,000; this left him with a net difference of at least R46,118.
He further argued that the loan agreement was payable over seven years with a residual or balloon payment. From this, he said, it can be concluded that the granting of the loan amounted to reckless lending, particularly given his limited contractual employment duration.
In response, Nedbank countered Moloto’s allegations by affirming their commitment to responsible lending. The bank pointed out that it performed necessary checks according to legal requirements, including validating Moloto’s claimed income through his payslips and bank statements.
Moloto, however, maintained that the bank’s focus on gross income failed to factor in the precariousness of his contractual employment. He did not dispute the affordability assessment based on his income and expenses at the time when the loan was considered. He only took issue with the fact that the bank did not take into account that he was employed on a ten-month contract.
Furthermore, the bank stated that matter was already pending in the high court. Secondly, it was argued that Moloto’s time frame for making the complaint to the NCT had lapsed.
According to the National Credit Act 34 of 2005, complaints must be lodged within three years following the incident, and Moloto’s application, filed in October 2023, exceeded that limit by seven months.
Moloto maintained that he referred his complaint to the National Credit Regulator (NCR) before the three-year period had expired, and the NCR issued its notice of non-referral after the expiry of the three years, implying that the time bar was interrupted whilst the matter was with the NCR.
However, the NCT ruled unfavourably for Moloto, stating its statutory guidelines prohibited intervening in matters exceeding the three-year barrier, regardless of delays experienced with the NCR.
“The tribunal has no option but to find that the applicant’s (Moloto’s) case is subject to this time bar, which must be dispositive of this matter,” read the ruling.
Moloto’s application was dismissed.
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