KEY POINTS
- Moloto accused Nedbank’s Motor Finance Corporation to lending recklessly.
- National Consumer Tribunal rejected Moloto’s case and ruled that he filed the complaint after the three-year statute of limitations expired.
- Nedbank explained to Parliament that it had followed all due procedures in approving a loan including checking Moloto’s income on payslips and bank statements.
Milfort Maphuti Moloto, a South African man, lost a legal battle against Motor Finance Corporation (MFC), a division of Nedbank Limited, after he accused the bank of reckless lending related to a car loan of over R484,000.
Moloto purchased a Hyundai H100 2.6D in March 2020 while he worked on a ten-month fixed-term contract, arguing that the bank should not have approved the loan due to his short-term income. The loan agreement required repayment over 60 months, followed by a final balloon payment.
Moloto’s allegations: loan presented before planning risk assessments
In a case instituted at the National Consumer Tribunal (NCT) October 2023, Moloto had claimed that the bank had passed the registration with full knowledge on the short term contract he had.
He contended that even though his total gross earnings for the 10-month period amounted to R530,000 with a net difference of R46,118 against the value of the loan, Nedbank disregarded the temporariness of his employment.
He alleged that such a lapse in judgment was reckless lending, especially for an extended-termen financial commitment that ran well outside of his termen of contract.
Nedbank’s defence: we followed responsible lending protocols
Nedbank strongly denied the accusations claiming that it followed all legal regulations on lending, thus it checked Moloto’s income through payslips and statement from the bank. The bank wrote that Moloto did not contest that the affordability determination was based on the income and the expenses he declared when requesting a loan.
Instead, Moloto argued that Nedbank failed to consider the short duration of his contractual employment when approving the loan.
Tribunal disposes off car loan appeal case on technical grounds
Although the case awakened eyeballs on responsible lending practices, the NCT rejected Moloto’s application on technical grounds. The National Credit Act 34 of 2005 requires that complaints be submitted within three years from an incident.
Moloto’s application was at least seven months late past this cut-off date and claiming that the issue was under review by the National Credit Regulator (NCR) during the three-year period, the tribunal found it could not intervene.
The tribunal has no choice but to rule that the applicant’s car loan appeal is subject to this time bar, which must resolve this matter, the ruling said. In turn Moloto’s case was thrown out, and Nedbank was exonerated in this case from any wrong doing.
