FINANCIAL provider WesBank and its chief executive Ghana Msibi are facing fraud charges for failing to refund two clients who were allegedly overcharged.
This was after financial investigator Emerald van Zyl opened a case of fraud at Bellville Police Station in Cape Town.
The bank allegedly refused to refund client Solly Mogaladi more than R20 000 on his vehicle loan in November 2017.
The bank has also failed to repay more than R15 000 to Graeme Shepherd, who also took a vehicle loan from WesBank’s financial partner, Volkswagen Financial Services, in 2016.
Mogaladi bought a vehicle worth more than R210 000, and the interest for the term of the loan on the contract was R267 000, which was more than R56 000. Shepherd’s vehicle was valued at R399 000, and he had to pay a monthly instalment of more than R6 000.
Van Zyl said he noticed that WesBank has been calculating interest in advance on their vehicle loan accounts. He said this shows that the bank ignored a letter from the South African Reserve Bank dated December 6, 1990.
The letter addressed all banking institutions in South Africa and stated that the calculation of interest in advance contravenes the provision of the Usury Act 73 of 1968.
Western Cape police spokesperson Frederick Van Wyk said the matter was still under investigation.
“The investigating officer assigned to handle the matter is pursuing the available information to his best to ensure a breakthrough. The matter will be investigated by seasoned detectives attached to Bellville SAPS. We can confirm that no suspects have since been arrested,” said Van Wyk.
WesBank head of marketing and communication Lebo Gaoaketse said the bank was aware of the numerous attempts, including these latest cases, by van Zyl to level “unfounded allegations” against the bank’s management of finance agreements with customers.
Gaoaketse said the two allegations once again show that van Zyl’s consistently flawed calculations fail to consider, amongst others, fees, interest rates, value-added products and personal circumstances that may have been accommodated by the bank. Gaoaketse said this was a common theme with van Zyl’s approach in which customers were misled with repeated miscalculations and false statements.
“Our customers matter to us, which is why we operate with integrity and make use of the most sophisticated systems to support our customers’ needs. This is not the first time Mr Van Zyl has laid baseless headline-seeking charges, none of which have been pursued for prosecution due to the complete lack of substance.
“To reiterate, once again, Mr van Zyl’s calculations are incorrect, and his allegations are baseless,” said Gaoatseke.
He said customers with concerns regarding their accounts should contact the bank for support to ensure accurate information and the necessary expertise. Gaoaketse said those who are not satisfied with the support received should contact the Ombudsman as an assessor of disputes who will review any such queries with the necessary legal and industry expertise.
Meanwhile, van Zyl said the amortisation calculation revealed that WesBank increased Mogaladi’s interest rate of 11.75%, by 2.75%, to 14.5%. He said the bank used this “inflated interest rate” when calculating interest for the term of the loan.
“This calculation revealed that the total amount of interest for the term of the loan should have been R210 601.59, which I have highlighted for easy reference. The interest for the term of the 71-month contract was R267 029.16 which is R56 47.57 more,” he said.
Van Zyl added that the amortisation calculation also revealed that Volkswagen Financial Services increased Shepherd’s interest rate of 11.5%, by 2.25%, to 13.75%. He said WesBank used this for the term of the loan.
“This calculation revealed that the amount of interest for the term of the loan should have been R147 283.38, which I have highlighted for easy reference. The interest for the term of the 71-month contract was R180 267.06, which was R32 984.06,” he said.
Van Zyl said this was blatant fraud, adding that Msibi should be charged for fraud on the two accounts.