The mandatory formal letter a credit provider must send to a consumer who is in default of a credit agreement, must be sent to the correct address, as chosen by the consumer, before a credit provider can take legal action.

This was once again highlighted by the Gauteng High Court (Pretoria) in a case where a woman, only identified as NM, complained that she was unaware of moves to repossess her car.

The vehicle was repossessed following an application by Mercedes Benz Financial Services.

IoL reports that NM said as she never knew of the court proceedings, she was unable to defend the matter. She subsequently asked the court to overturn the order in favour of the financial institution.

The main issue which came to the fore, was that Mercedes Benz Financial Services (respondent) used the wrong email address to which it sent her the mandatory section 129 (1) of the National Credit Act notice.

This is a mandatory formal letter a credit provider must send, as it informs consumers of their arrears, outlines their legal rights and it provides options to resolve the default.

This includes referring the matter to a debt counsellor, before the credit provider pursues legal action.

The applicant and the respondent entered into a written agreement in terms of which she undertook to repay the purchase price in instalments.

The respondent retained ownership of the vehicle until payment of the last instalment. 

IoL reports that the applicant provided an email address in the application for credit. She elected this as her preferred method of communication.

In 2023, the applicant received an email from a law firm sent to the chosen address. They advised her that she was in arrears and asked when she would pay the arrears.

The court noted that they sent the email to the same email address that the applicant appointed in the agreement.

The applicant responded on the same day and explained that the vehicle was in the possession of her ex-husband.

The attorneys advised her to discuss the matter with the respondent, which she did, but she received no response.

The lawyers supplied direct contact details for certain employees of the respondent, including the email for the relevant team leader.

In overturning the default judgment against her, the court said as she chose a specific address for all correspondence with the credit provider, the latter had to ensure compliance.

Thus, the default judgment was erroneously granted.

Full IoL report