Absa's poisoned apple

Former MK operative, Naval Captain Teboho “Tommy” Molotsi, now retired, was one of the few former MK comrades to have been integrated into the SANDF. He rose through the ranks of the SA Navy, to end up as Defence Secretary. In 1998, earning a half-decent salary and wanting to secure his family’s future, he decided not to make use of naval housing but, rather, to raise a bond and buy his own home. Absa was happy to oblige with a R170,000 home loan.

Molotsi religiously paid the agreed monthly instalments without skipping a single payment.

In 2008, Molotsi opted for early retirement from the Navy. When he received his provident fund payout, he asked Absa for the settlement amount on his loan, keen to unburden himself of “credit headaches” in his retirement. He also approached his vehicle financiers, Nedbank’s Motor Finance Corporation (MFC), for a settlement figure on his car.

At Absa’s central branch in Kempton Park, Molotsi dealt with Elize van Jaarsveld, who consulted her computer then gave him a figure which he wrote down on a piece of paper and took to Capitec Bank, into which his provident payout had been deposited. But Capitec refused to transfer any amount to any account without proper documentation stating the purpose of the payment.

Back to Van Jaarsveld for paperwork stating the amount required to settle Molotsi’s bond account – which she duly provided. The document also gave the particulars of the account to which the settlement was to be remitted.

Molotsi followed exactly the same procedure with his vehicle finance provider, Nedbank’s Motor Finance Corporation (MFC). Soon after settling the car loan, he received a call from a consultant at MFC informing him that, because of his early settlement, he would be receiving a R9,000 rebate – which was promptly paid into his Capitec Flexi Account.

Back to Capitec Bank with the official Absa Bank document stating the reason for the requested transfer of funds to Absa, Capitec obliged, and in November 2008 an amount of R137,063.58 was transferred from his Capitec account to his Absa Home Loan Account. Capitec gave him proof of payment, which Absa accepted. Molotsi then asked when he could expect to get his title deed and Van Jaarsveld told him it would take three to four months to be processed.

“She said something like ‘the titles are kept with the lawyers who have to work with the Deeds Office to cancel the bond’,” Molotsi recalled.

Three months later, in February 2009, Molotsi went back to Absa to inquire about the status of his title deed but the answer was simply “not yet”. Another month passed, then he received a text message from Absa Bank informing him that, for having settled his bond account in 11 years instead of 20, he was due for a rebate. Since the same had happened with his car loan, Molotsi saw nothing strange in that.

He told Noseweek that that particular text message – since deleted – was followed by a phone call from Van Jaarsveld asking him to come in to the bank so that his rebate could be processed. Since he was not expecting a fortune, he was in no particular rush to get to the bank.

With the frequency of calls from the bank increasing – and having received yet another while out shopping with his wife, Mary, one Friday in April 2009 ­– and since they were not far from Kempton Park, they decided to go in to the bank to find out exactly what the rebate was that the bank was so impatient to pay out: R90,000, they were told.

Sceptical about what Van Jaarsveld was telling them, Mary specifically asked whether it was a ploy to sign them up for further credit. Van Jaarsveld insisted that it was a rebate.

“I was a pensioner, I had no intention of mortgaging our family home again for money we did not need. After all, the whole purpose of the exercise had been to settle the bond.

“That woman told me to explain to my wife what a rebate is… and all I knew about rebates was what Nedbank’s MFC had told me when they handed me the R9,000.”

With that cleared up – and without signing any additional bank agreements – the Molotsis were happy to accept the money.

“After a brief consultation with my wife, we decided to immediately spend R60,000 to clear our daughter’s university loan, though there was no urgency to do so. We asked Van Jaarsveld to transfer the rebate to our Capitec Flexi Account from which we would pay Wits the R60,000.”

The Molotsis’ bank statement shows R60,000 was immediately transferred from their bond account (that was supposed to have been settled and closed as requested) to the Capitec Account. At that point, they again inquired about their title deed and the Van Jaarsveld promised to follow up with the Deeds Office.

The following month, additional amounts of R10,000 (on May 11, 2009) and R30,000 (on May 25, 2009) were credited to the Molotsis’ Capitec Account from Absa Bank. Mysteriously the R90,000 “rebate” had grown to R100,000.

Molotsi heard nothing further from Absa for nearly three months. Even their constant requests for the title deed yielded no straight answers. Then in June of that year, the retired naval officer received a letter from Absa Home Loans informing him that he was in arrears with his bond account. He also received a call from someone in the legal department of Absa’s head office bearing similar news – that his account was in arrears… He explained to the caller his version of what had transpired and thought that would be the end of the matter.

On July 1, 2009, he received another letter, this one headed “Final Warning”, demanding that he settle the arrears or risk facing legal action.

Distraught and confused, the Molotsis rushed in to Absa in Kempton Park and were told that Van Jaarsveld had retired.

They explained their situation to the branch manager, who promised to investigate and get back to them.

Molotsi heard nothing more from Absa and he assumed that the bank must have established the true state of affairs and rectified what was wrong.

But in March 2010 he received a summons which cited Section 129(1)(a) of the National Credit Act No 34 of 2005. This section stipulates that, by evoking the Act, Absa was acknowledging that they were bound by the NCA, the same legislation that requires that every transaction be individually assessed and adjudicated…

By simply handing the Molotsis the R90,000 or R100,000, without properly vetting the credit-worthiness of the pensioner, the bank must have known that they were contravening the same law that they were invoking in its attempt to attach the Molotsis’ home.

According to Derry Burge of Debt Management & Counselling Services  that has since taken up the matter, the National Credit Act demands that each and every one of the three “loan” payments to the Molotsis should have been handled as fresh credit applications.

“Molotsi didn’t sign any documents authorising the bank to reactivate his bond account that he had settled just three months earlier. Besides, the law doesn’t allow automatic renewals of credit agreements,” said Burge.

Lawyers at Nel & De Wet Attorneys of Pretoria and Monte Coetzer Inc of Johannesburg argued Molotsi’s case before Judge Ramarumo Monama, who ordered the bank to produce the outcome of their own investigations and obtain a statement from their former employee, Van Jaarsveld.

This was after the bank’s counsel had claimed ignorance of the details presented by Molotsi.

Judge Monama postponed the matter sine die (without setting a date for the continuation of the trial).

Weeks turned into months and then years without any sign of the bank’s ever prosecuting the matter. Then, around August last year, the Molotsis’ lawyer, Johann Nel, at Nel & De Wet Attorneys advised him that they wanted to close the file because “leaving it open was becoming costly” to the pensioner.

Molotsi took their advice as, after more than two years without any movements from the bank, it was logical to assume that Absa must have recognised their mistake. But no sooner had he agreed that his lawyers should close their file than another summons arrived.

Molotsi rushed to the office of his attorney, Johann Nel, but was shocked to be repelled and told: “Sorry Mr Molotsi, we can’t represent you any more as we now represent the bank in other matters…” A conflict of interest.

But being a considerate attorney Nel recommended a correspondent attorney in Johannesburg, Monte Coetzer. He even wrote him a letter explaining his withdrawal from the matter.

Molotsi engaged the Johannesburg lawyer – who demanded a down payment of R7,000.

The new attorneys began to prepare to defend the bank’s application, just as Nel had done. But, on the eve of the hearing, they called him with the nasty news that they, too, could not represent him any more. Again, there was some or other conflict of interest.

Left without any legal representation – and R7,000 poorer – and with just one night to prepare, Molotsi decided to represent himself.

When he came to Noseweek, he was still fighting his own corner in the court battle.

Derry Burge of Debt Management & Counselling Services, who also consults for New Economic Rights Alliance (NewERA) – an organisation that “supports victims of corporations that put profit ahead of human rights” – said, after seeing Molotsi’s documents and those filed by Absa, that the bank’s NCRCP (National Credit Regulator Credit Provider) certificate was missing.

She also noticed that the bank had not attached any documentation to prove that Molotsi had given Absa instructions regarding the withdrawals against his cleared bond account.

Burge pointed out to Noseweek: “If you read this documentation (the documents filed with the National Credit Regulator on behalf of Molotsi against Absa), it asks for the same information that I would ask for in discovery (the legal process of demanding relevant documents from an opposing party) if I wanted to assess a case of reckless/unlawful lending.”

Burge said the bank had to show the court a copy of their assessment from which Molotsi had qualified for the additional R100,000 loan in 2009 as per the National Credit Act.

“As he had retired, it would be important, to see if he had the means to service the ‘loan’. Also, there should be some contracts showing the terms of the new credit line.”

Burge concluded that the matter should not have been defended in the high court, but with the National Credit Regulator instead.

She has since filed a complaint against Absa on behalf of Captain Molotsi.

In her notice, she informs the National Credit Regulator: “I hereby request that Absa be compelled to comply with my request for this documentation in order for me to assess, as a debt counsellor, as to whether this was reckless/unlawful ‘lending’ of money, as the consumer did not request a draw down on his bond.

“If he did, then Absa must please supply me with such evidence. In fact I would appreciate any evidence from Absa that substantiates their claim that this was a loan.”

Absa wrote to Molotsi  on 7 August – copied to Burge – acknowledging receipt of his complaint, “lodged at Customer Contract Management”, giving them a reference number and “assuring” them that the matter was receiving urgent attention.

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