On 7 May 2007 the client entered into a loan Agreement for R 7.4 million with Standard Bank with an interest rate of prime minus 1.55%.

Due to financial difficulties the client applied for debt review during November 2011.

The Court Order (Case number 7663/11) stated that a fixed interest rate of 10.45% will be applicable on the mortgage account for period of debt review which ceased on 14 August 2018.

However, instead of re-instating the original interest rate of prime minus 1.55% and which was applicable before debt review, Standard Bank applied the bank’s prime interest rate, which is in total breach of the National Credit Act and Court Order.

The amount overcharged by Standard Bank on client’s mortgage loan due to this prohibited conduct amounted to R 810 436.95.

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And here is the reason why:-

Before 2007, Standard Bank was regarded as one of the most reliable banks in South Africa. However, by 2009, it had become one of the most controversial institutions under the leadership of Chief Executive Officer Mr. Sim Tshabalala.

An article published by Media 24/Business on 19 March 2017, titled “Winning Women: Banking on Home Loans” (click here to read article), reported that Standard Bank had lost approximately R1 billion on its mortgage loan book in 2008.

In response to these losses, Ms. Funeka Montjane was appointed as the Financial Director to Mr. Tshabalala. According to the article, she implemented what were described as “unconventional methods” in an effort to prevent further financial losses in the mortgage division.

These so-called unconventional methods were allegedly implemented from 1 June 2009 without the consent or knowledge of clients. They included the extension of loan terms from 20 to 30 years, the increase of agreed interest rates, the periodic increase of monthly service or administration fees, and the levying of unauthorised debits on client accounts.

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MESSAGE FROM WEBMASTER – Well done Simmy !!!!!