NCR pounces on Cape’s ‘illegal’ money lenders

Earlier this year, Judge Siraj Desai took a firm stand over attachment orders on workers

FIVE alleged loan sharks were arrested and 71 pension cards, seven ID books and five bank cards were seized when the National Credit Regulator (NCR) raided 21 Western Cape companies last week.

The five were arrested for contravening the National Credit Act. It is alleged that they kept the documents as surety for loans made.

NCR’s acting manager of investigations and enforcement, Jacqueline Boucher, said officials would also be looking into further allegations of reckless lending.

Boucher said most of the 21 companies they swooped on were registered credit providers.

The NCR was accompanied by the police when it raided companies in Wellington, Paarl, Stellenbosch, Strand, Woodstock, Robertson, Bellville, Goodwood and Wynberg.

Earlier this year, Western Cape High Court Judge Siraj Desai took a firm stand when he declared emolument attachment orders (EAOs) against a group of Stellenbosch workers unlawful.

The workers had been exploited by microlenders who had EAOs against them. Many of the workers had nearly half their salaries deducted while some were charged up to 60 percent interest.

An EAO is awarded to a credit provider to deduct money from a person’s salary or bank account. Desai said some of the loans were in contravention of the National Credit Act.

Boucher said the NCR investigated credit providers on a quarterly basis.

She said the focus was on credit providers who were unlawfully garnishing, retaining pension and bank cards, identity documents and PIN numbers of their clients as surety. “This is a contravention of the

National Credit Act and it is a criminal offence,” she said.

“The exploitation of vulnerable and unsuspecting consumers by credit providers will not be tolerated and this is definitely not the last investigation of this kind.

“We are very proactive when it comes to these investigations, and engage with communities to find out about trends of unscrupulous credit lenders.

Trade and Industry Minister Rob Davies said South Africa was one of the few countries in the world that had no limit on how much an employee’s salary could be attached by way of an EAO.