Banks hit back in R699 car scheme

The South African banks accused of reckless lending in the controversial R699 per month car saga say the court action brought against them is vague and ill-informed.

Last week, it was reported that approximately 550 customers of the Satinsky R699 per month car scheme were taking court action against the Satinsky group and the South African Banks which provided loans to its clients.

The action is being brought by Johan Bartosch, who is leading the group of disgruntled consumers to the Eastern Cape High Court, looking to declare the contracts null and void.

Bartosch said that many people in Port Elizabeth have already lost their cars to the banks. “Some of those cars have been auctioned off already, and they have been blacklisted. That’s not what we want. All we want is to be treated fair.”

About 17,000 people are believed to have been affected by the scheme which offered to cut repayments on new cars to about R699, if the motorists drove a minimum distance with pasted advertisements about the scheme on their cars.

The scheme collapsed — with banks now calling for full repayments — amounts not affordable for all those involved.

The call for class action

The initial proceedings brought by Bartosch were intended to establish the action as a class action against the banks and Satinsky, with Bartosch looking to represent “all people who entered into credit agreements with the [credit providers]” from January 2010, to date.

The founding affidavit from Bartosch also accused the banks of “nefarious conduct”, according to Absa, relating to an alleged Ponzi scheme, as well as the alleged manipulation of income and expenses for credit scoring purposes, and reckless lending.

Karen van Eck, representing the Satinsky group on the matter, noted that Satinsky CEO Albert Venter is convinced that he has not contravened any law, or that he is guilty of any criminal act.

Banks respond

In answering affidavits, Standard Bank and Absa (who financed vehicles under the scheme) reiterated their previously reported positions on the matter, and questioned the action’s legitimacy as a class suit.

In order for a suit to be a class action, the banks said that relief sought (or damages claimed by members) must flow from the same cause of action, and must consider issues of fact and of law that are common to all members of the class.

This, they said, was not defined or met by Bartosch’s founding affidavit.

“The proposed class is ill-defined. It is vague, over-inclusive and based on subjective factors,” Standard Bank said in its response.

“The basis of each class member’s invocation of the NCA (National Credit Act) is unique and not susceptible to class-wide determination.”

“The defences that may be raised by the credit providers in respect of each relevant consumer constituting the proposed class are also unique. There is therefor an absence of common issues of fact or law,” Standard Bank said.

Additionally, responding to Bartosch’s claims of “certain nefarious acts”, Absa’s response said that there was absolutely no credible evidence provided whatsoever to back the claims up.

“The best that [Bartosch] does in this regard is rely on inadmissible, hearsay, speculative, assumptive and untested matter.”

“[Bartosch] provides no sustainable and credible evidence whatsoever of the alleged conduct – this despite filing two affidavits,” Absa said.

The banks also noted that the matter was not urgent in any sense and Bartosch failed to show he was the best person to represent the members of the class action.

Further, the banks said that the court did not have the requisite jurisdiction to grant the relief sought by the action as it was situated in the Eastern Cape, while none of the respondents were based in the province.

The matter has been postponed to 7 August 2014.

More on the R699 car scheme

R699 car scheme heading to court

R699 cars deal is a scam: consumer activist

The inside story of the R699 car scheme

R699 cars a Ponzi Scheme: Wesbank

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Banks hit back in R699 car scheme