Tuesday, January 18

National credit regulator accused of siding with banks in R60bn class action lawsuit


The National Credit Regulator (NCR) is accused of siding with banks in a massive R60 billion class action lawsuit brought by the Lungelo Lethu Human Rights Foundation after it demanded the return of documents purporting to show perjury by banks and a sales pattern. houses repossessed by a song.

In a parallel case to the class action lawsuit, the NCR has asked the Gauteng Superior Court to prevent attorney Douglas Shaw, statistician Garth Zietsman, and about 200 others involved in the case from disclosing confidential information obtained while Shaw and Zietsman were working to the NCR.

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Moneyweb previously reported on the story:

Evidence that banks sell foreclosed homes for pennies in the rand

NCR is petitioning the court for an order demanding the return of any and all NCR documents, statistics and other information obtained by Shaw and Zietsman, including exhibits filed by Zietsman in support of the class action lawsuit.

The NCR says that it is subject to the provisions of the National Credit Law, which obliges it to maintain the confidentiality of information and ensure that it is used for the purpose for which it was intended. Failure to return confidential information could result in harm to customers and banks, and could create liability on the part of NCR.

“This amounts to the police investigating a murder and finding the murder weapon and the culprit, only to be told to turn over all the evidence to the culprit,” says Shaw.

“We have evidence that banks have been selling properties at a fraction of their market value and have been lying about it for years in court.

“The real damage that has been done here is for the clients of the banks whose properties have been repossessed.

“This is a national scandal and an embarrassment, and we look forward to arguing this in court.”

Information obtained by Shaw and Zietsman shows that repossessed properties have been sold for 50-60% of their market value through sheriff auctions across the country.

The alarm bell rang years ago

The NCR says the information was obtained in 2015 while conducting an audit and compliance verification. Shaw was hired as a legal advisor and Zeitsman as a statistician.

Shaw recommended taking legal action against certain banks (for illegally selling foreclosed properties at a lower than market price).

The NCR decided not to take legal action against the banks as the Rules Board of the Courts of Justice was reviewing the rules applicable to the sale in foreclosure of repossessed properties. Subsequently, the Board of Rules has changed the court’s rules to allow judges to set a minimum or reserve price when awarding a sale in order of execution.

In his affidavit in response to the NCR, Zietsman says the court should not grant the NCR the order it requests because “the basic test to determine whether a document should be produced is relevance and the documents are very relevant.”

He adds: “[Zietsman’s founding] The affidavit reveals that the banks have been misleading the court in this matter by pretending (a) that they were unaware that they had sold thousands of properties for much less than value and (b) that they have no methods of valuing the value of market of a property that in their papers they deny. These are very important and relevant issues. ”

NCR ‘a captured institution’

Zietsman goes on to say that the documents the NCR wants returned are, in any event, public documents available through the Registry of Deeds.

“The mandate of the NCR is to protect consumers against behavior of credit providers that is illegal and / or unconstitutional. In this request he acts as a defender of the banks against the consumer and therefore has failed in his mandate and it is alleged that it is a captured institution and that this should be investigated by a high level regulatory capture commission ”.

There is one aspect of the lawsuit that is absurd, Zietsman adds, in that the NCR seeks to protect those named in the database, the very people who can receive large amounts of money if the class action is successful.

A person cannot be legitimately “protected” against his own interest, he argues.

Zietsman says the exhibits attached to his affidavit have erased the names of the parties and therefore cannot be said to violate confidentiality. However, he is asking the court to allow the original database, with the full names released, to be restored.

“Regardless of what can be said about whether the NCR is entitled to a refund of its statistics, it certainly cannot be said that it is entitled to my affidavit, which is my opinion that I have never been paid and therefore , it remains my confidential information and I choose to share with the plaintiffs in this matter, and therefore with this court, ”he states.

Read:

Judges question banks on home repo practices
Banks Slapped Over Home Foreclosures In Joburg Court Case

In response to questions from Moneyweb, NCR responds that Zietsman’s claim that NCR is a captured institution that has failed in its mandate to serve consumers is inflammatory.

[These] The accusations are certainly inflammatory and unjustified. It is unethical and illegal for Adv Shaw and Mr. Zietsman to use the information they obtained from the NCR for their own litigation. This information is protected against illegal disclosure by the National Credit Law (sections 68 (1) and 156 (1)) and the Personal Information Protection Law.

Sales in execution of real estate [houses] are governed by the Uniform Rules of the Courts administered by the Department of Justice and the Board of Rules of the Courts of Justice. In particular, Rule 46 of the Uniform Rules of the Court. In a series of judgments, the National Consumer Court has ruled that it has no jurisdiction to review real estate sales in execution.

The NCR made oral and written submissions to the Board of Rules during its consultation meetings on changes to Rule 46. This consultation process resulted in changes to the Rule to offer more protection to consumers during foreclosure sales of their real estate. residential. The changes include the court setting a reserve price for sales in execution.

His claim that the NCR was captured is libelous and is strongly denied.

Shaw and the Lungelo Lethu Human Rights Foundation have further argued that the NCR should join the class action as amicus curiae (friend of the court) in defense of consumers whose properties were repossessed at a fraction of market value, instead to seek, as claimed – to make mortgage banks cover themselves with air by trying to recall crucial evidence to help prove wrongdoing.

The NCR responds:

The NCR is subpoenaed as part of the class action lawsuit and will determine at an appropriate time what submissions it wishes to make in court.

His claim that the NCR protects banks is also libelous and is strongly denied.


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