Bank continues to take money after full payment

2014-09-23 00:00

WHEN Derrick DuToit went under voluntary administration more than five years ago, his motivation was to escape the debt trap and turn over a new financial leaf.

But although his R900-a-month payments under the five-year administration order ended last May, DuToit found himself at his wits’ end after Nedbank started randomly debiting his savings account, apparently for a R17 661,26 credit card debt that was included in the administration order and had been paid in full.

“In April in an electronic payment order, they took off R385. They said it was for the card,” Du Toit said.

Another two debits of R600 and R585 followed last month, despite DuToit and his administrator from BB Administrators, Beatrice de Beer’s, repeated attempts to resolve the problem with the bank over the past six months.

“They said the R17 000 is still outstanding, but I have paid up in full. My administrator has endless problems trying to get information through to Nedbank Credit Card,” he said.

DuToit said his administrator had even visited the card division in Johannesburg on his behalf and assured him that the problem had been solved. But two weeks ago his account was again debited for R385.

“Isn’t it quite strange that when I was under five years administration I had no problems and when I got the letters saying that I’m fully paid up, now Nedbank is taking money out of my account?”

Desperate to plug the debits, DuToit resorted to closing his savings account that he’d held with Nedbank for 15 years.

“I have changed my bank but I am very fearful and not guaranteed that this might stop because they can get my new bank details and take it off,” he said.

DuToit said the problem had impacted his credit record and he couldn’t get a R120-a-month cellphone contract as he remains blacklisted.

When I approached Nedbank for comment, I asked spokesperson Kabelo Collis whether it was possible the debits could be fraudulent and unrelated to the credit card account. Collis declined to respond to questions saying that the bank is “still in the process of investigating” and expected to receive a report on September 29.

However, De Beer is adamant that the consumer’s credit card has been paid up, saying she has proof of payment. She handed DuToit a certificate in terms of section 74U of the Magistrate’s Court Act, stating that all accounts were paid up in May 2013, although not all creditors had issued paid-up letters yet. Witness Crusaders has a copy of the certificate, which bears the stamp of the clerk of the Pietermaritzburg Magistrate’s Court.

De Beer said Nedbank had last week acknowledged proof of payment and is now reconciling “one or two payments”.

Credit Information Ombudsman Manie van Schalkwyk said credit records do not clear automatically once administration orders have been paid up and consumers should apply, via an administrator, for a recision order in terms of section 74Q of the Magistrate’s Act.

“Once the rescission order is submitted to the bureaux, the listing will be removed,” he said.

Ombudsman for Banking Services Clive Pillay said it seemed the bank may have applied the principle of “set-off” to the debt, which applied to all loans entered into before June 1, 2007, when the National Credit Act came into effect, prohibiting the “set-off” clause in contracts.

Pillay said the act also prohibited a bank from debiting an account for a loan repayment unless a customer has agreed beforehand.

“Set-off is the legal right to deduct money from a customers’ account that is in credit and use it to pay an account of the same customer that is in arrears. A common example is where banks deduct money from a savings account or a current account to pay a credit card account that is in arrears,” Pillay said.

However, he said that despite the act, banks continue to apply set-off to loans obtained after June 1, 2007, claiming to apply the common law principle of set-off, although the clause no longer appeared in contracts.

“The banks and the National Credit Regulator are in disagreement on this aspect and to the best of my knowledge it has not as yet been resolved,” he said.

I will keep you posted on the outcome of this case. Send your consumer issues to Lyse Comins at consumer@3i.co.za

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