Questionable bank foreclosure procedures have once again fallen into the spotlight following the Supreme Court of Appeal (SCA) decision last week to overturn two settlement agreements between Standard Bank and a defaulting client because the bank had not complied with the National Credit Act.
The SCA overturned the settlement agreements in the Wolmarans Kinder Trust case after the agreements were used by the bank to obtain orders from the Bloemfontein High Court, allowing the bank to sell properties to recover its debt without the consumer being afforded an opportunity to oppose the application or follow some other route to repay the debt, such as a debt review process.
The SCA judgement arose after the Trust and its trustees applied to the SCA to have the High Court orders overturned.
This follows another judgement in May when the Pretoria High Court ruled that banks have no right to cancel a loan agreement if a consumer goes into debt review. In this case, the Banking Association of South Africa argued, without success, that consumers under debt review had cancelled their original loan agreement, which would then allow the banks to charge higher interest and other charges.
Emerald van Zyl, a financial investigation consultant, said in a telephone interview that he has had to assist in the prevention of sales-in-execution by the banks of some 1 563 homes on behalf of bank clients.
He stated that in many of the cases, the banks overcharged on mortgage loans, and in his experience, Standard Bank has become a major culprit in this regard since 2007.
Regarding this latest SCA court judgement, he asked how it was possible for the High Court, in the first place, to grant an order allowing the bank to sell its clients’ assets in contravention of the National Credit Act.
He said that the lack of financial knowledge by many people in the legal system compounded the problem of banks seemingly being purely driven by profit motives. For example, two months ago, he attended a court hearing as an expert witness, only to discover that the judge adjudicating the case had no idea what a trust was.
“Consumer protection has collapsed in South Africa,” he said.
Standard Bank responded to Business Report’s questions about the latest the SCA judgement by stating that it complies with all applicable legislation, including the NCA, and that it is committed to “upholding the highest standards of legal and ethical conduct in all its operations, including matters involving customer credit and debt recovery.”
The bank said it was “important to note that every case is unique, and the Bank approaches all matters on a case-by-case basis, taking into account the specific circumstances and legal frameworks applicable. The Bank remains confident in the robustness of its internal processes and its compliance with the law.”
“We are reviewing the judgment carefully and will be guided by legal advice and the Bank’s commitment to responsible banking,” the bank said.
Meanwhile, the major banks, National Credit Regulator, and the Human Rights Commission face a R60 billion class action suit set for February 2026, involving allegations of unlawful home repossessions, violation of consumer rights, and banks charging higher monthly instalments after recapitalising arrears while still suing for the same arrears—effectively billing twice.
In 2018, a Johannesburg High Court judgement that was supposed to have made bank foreclosure practices more transparent and humane ruled that banks had to obtain a court order declaring a property specifically executable before selling it in execution and whether alternative remedies had been explored.
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