You saw them at a distance. The sight of cars in Glencoe and Dundee, advertising the deal where you could buy a car for R699 a month if you carried all that advertising on the back of the car, was a familiar one. No one thought that this would lead to a possible financial disaster, which now seems to be the case. Many local people took advantage of the scheme, as a number of commercial banks was involved in this project, and nobody thought it would be anything but proper. It did not last, and now people may lose these cars, or their money, if they cannot afford the real premiums on these vehicles.

According to reports from Sunday papers last week it would appear that the Eastern Cape High Court had granted an urgent hearing to hundreds of people who bought cars under the discount scheme. The scheme was launched in 2008 by Albert Venter, the CEO of the Satinsky Group. Current court papers are asking the for all contracts between buyers and the banks to be declared null and void. Standard Bank, Absa, Nedbank’s Motor Finance Corporation and Wesbank, among others, were cited as respondents in that first application. There is a Facebook Group called “I have been done in by Drive a New car from R699 a month,” where people may find information on the envisaged class action.

A due diligence investigation by Wesbank, however, led them to slamming it as a Ponzi scheme, and they declined to join it. The National Credit Regulator has in the meantime warned that it plans to refer Satinsky to the National Consumer Tribunal and also, all credit providers in this scheme will be investigated.

The scheme offered to cut repayments on cars to R699.00 per month if the driver used it for a specified distance, and stuck advertisements for the scheme all over the back of the car.  Wesbank slammed the scheme as a Ponzi scheme about two weeks ago, wherein money from new investors is simply used to pay older ones.

Satinsky’s partner, Blue Lakes, stopped cooperating in the scheme after Satinsky cut links with them, and then rebates started drying up, leaving motorists to suddenly fork up the whole amount outstanding.  The Sunday Times has further reported that Albert Venter, the driving force behind this scheme, now faces an angry staff who not been payed. The cracks seem to be multiplying in the Satinsky bulwarks, and it still remains to be seen what would be left of the scheme after the class action had run its course.