Africa-Press – South-Africa. The National Consumer Tribunal has found Clark Gardner, a director of Stellenbosch debt counselling firm Summit Financial Partners, guilty of contravening the National Credit Act and his conditions of registration as a debt counsellor. Gardner is one of the key players in a class action against allegedly unfair practices in the credit industry and has been outspoken in his criticism of the National Credit Regulator (NCR).
According to a press release on the website of the NCR, the judgment by the tribunal follows an investigation of complaints against Gardner by the NCR. The tribunal found Gardner guilty of contraventions related to, among others:
The tribunal imposed an administrative fine of R500 000 on Gardner, according to the NCR press release. Further, it ordered Gardner to appoint an independent auditor to audit his consumer files dating back three years in order to identify, among other things, consumers who had been overcharged. The auditors’ report must be given to the NCR once completed, and Gardner has been ordered to refund consumers identified by the auditors as having been overcharged.
CLASS ACTION
The outcome of the investigation is seemingly at odds with news reports over the last few years on Gardner’s efforts, together with the Stellenbosch Law Clinic, in pursuing a class action on behalf of indebted consumers regarding the abuse of garnishee orders and high debt collection costs.
In December 2019, Personal Finance’s sister publication, Business Report, reported that Summit Financial and the Stellenbosch Law Clinic, representing 10 indebted clients, had won a ground-breaking judgment in the Cape High Court that would “put a cap on the outstanding garnishee order amounts owed, and the unregulated and unfair way in which debt collection costs had prejudiced the poor in the past”.
The court case listed no less than 49 respondents, including the National Credit Regulator, Banking Association of South Africa, Minister of Justice and Correctional Services, Minister of Trade and Industry, Council for Debt Collectors, National Forum on Legal Profession, Law Society of South Africa, most of the major banks, South African Human Rights Commission, Consumer Goods Council and some of the major retailers such as The Foschini Group, Truworths, Mr Price Group, Edcon and Lewis Group.
The report quoted Gardner as saying about 1.3 million consumers were paying debts via garnishee orders on their salaries, while about 1.5 million were likely to have paid off or contributed to paying towards those orders in the past three years.
CRITICISM OF REGULATOR
Gardner subsequently criticised the NCR for not doing more to protect consumers. In a Personal Finance Rands and Sense opinion piece on January 20, 2020, “Is the NCR fulfilling its mandate to protect consumers?”, he wrote: “Despite [a] framework, which clearly requires that the regulator protect the interests of consumers, in particular those whose situation in life means that they are unlikely to be able to fend for themselves against big business, it appears that the NCR has chosen rather to uphold the interests of the corporate world at the expense of the vulnerable consumers.
“This assertion arises from the fact that the NCR has been noticeably absent from the efforts a number of parties have made to act against those in the debt collection industry, including certain attorneys, who are engaging in practices that go against the law and which see them milking the poorest in our society for fees to which they are not actually entitled. In fact, the NCR stands out for upholding the interests of those who charge fees in contravention of what the law allows, rather than intervening to protect the rights of debtors in South Africa.”
PERSONAL FINANCE
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