Nedbank cleared of 'reckless lending'
The National Credit Regulator has advised a financially-vulnerable consumer to seek the services of a debt counsellor to ‘assist her with possible over-indebtedness’ but has not found Nedbank guilty of reckless lending practices as contended, notes a Moneyweb report.
Retired education specialist, Myrlene Pieterse, approached the Ombudsman for Banking Services on behalf of a financially-vulnerable employee. She argued that Nedbank engaged in reckless lending practices by not adequately explaining the implications of the credit granted.
The employee had received a personal loan of roughly R30 000 from Nedbank as well as two credit cards.
According to the National Credit Act, a credit agreement would be considered reckless if the credit provider failed to do an affordability assessment, if it became clear that the client did not understand the risks of the credit, or if the debt pushed the client into a situation where she became over-indebted.
The report, which details the Ombudsman’s findings, says the case, first taken up with Nedbank in April 2017, highlights just how difficult it is to strike a balance between responsible lending and consumer protection through legislative means, particularly as it relates to vulnerable individuals with limited financial knowledge.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
