There’s a lesson here for others in the same situation – always challenge the banks’ accounting.
Nedbank was sent back to school after its attempt to recover R25 619 allegedly owing on a BMW was rejected by the Johannesburg High Court in November on the grounds that it initially claimed the full amount outstanding of R288 660.
According to the judgment, Nedbank sent out a Section 129 notice in terms of the National Credit Act (NCA) in July 2024 incorrectly claiming that the arrears were R288 660 – more than 11 times the actual arrears.
The BMW owner successfully challenged this, claiming the bank should not be given the summary judgment it was seeking.
Nedbank responded that its admitted non-compliance with Section 129 of the NCA was without merit. It later sent out a new Section 129 notice to the client with the correct arrears, but this was not enough to rescue the bank’s case.
The BMW owner took offence to the fact that the new Section 129 notice was issued to his attorneys, rather than himself, and was an attempt by the bank to fix its mistake after legal proceedings had commenced.
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Definition of a Section 129 notice …
Fortunately for the BMW owner, he had the Constitutional Court on his side.
The highest court in the land had delved into the issue of Section 129 notices in some depth.
These are intended to alert consumers to any default, and the amount, before the creditor can move to legally enforce the debt.
This was argued in the Amardien v Registrar of Deeds case.
“The [Section 129] notice must propose the options available to the consumer who is in financial distress and unable to purge the default. It must point out that the consumer has the option to refer the credit agreement to a debt counsellor, dispute resolution agent, consumer court or ombudsman. The purpose of the referral must also be stated in the notice,” ruled the ConCourt in the Amardien case.
Before a consumer can consider their options, they must be advised of the arrears amount. In the BMW case, Nedbank “failed to establish a valid and competent claim in its particulars”.
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This was not a ‘mechanical’ matter. On Nedbank’s own version, “it failed to send a compliant Section 129 notice”.
“The cause of action verified by the deponent in the affidavit in support of the application for summary judgment was defective,” ruled the Joburg High Court.
Though the court dismissed Nedbank’s application for summary judgment, it also rejected the BMW owner’s plea to have the whole case withdrawn on the grounds that it was fatally defective.
The judge disagreed, allowing the bank to fix the mistakes in its Section 129 notices and re-serve them on the vehicle owner.
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What to do if you receive a Section 129 notice
The lesson here is never to ignore a Section 129 notice and hope that it goes away.
As this case demonstrates, banks are often issuing Section 129 notices with incorrect arrears in the expectation that consumers will be too intimidated to challenge them, according to consumer legal advisor Leonard Benjamin.
“The case underlines the importance of a Section 129 notice, and why it is so important for consumers to make sure that it will be served on them. They should be using the opportunity it presents to dispute the debt, approach a debt counsellor, or make payment arrangements,” says Benjamin.
Moneyweb previously reported on the case of the Reineckes, who defeated FirstRand Bank in an appeal hearing in the Pretoria High Court when the bank’s claimed arrears jumped from R70 412 to R2.1 million in 11 months. The bank’s accounting was so implausible that the court rejected its claim in its entirety.
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This case demonstrates the importance of challenging the banks’ claimed arrears on Section 129 notices, which Benjamin says are far more common than is generally supposed.
Consumers must exercise their rights under the NCA and demand a detailed breakdown of the arrears claimed, and how the bank came to this figure.
Very few consumers do this and end up waiving their rights under law.
Technical errors, such as those in the case of the BMW owner, allow the consumer time to come to an arrangement that is not entirely weighted in favour of the banks.
This article was republished from Moneyweb. Read the original here.
