In our edition of September 24, attorney Elizabeth de Stadler commented on the case of Belinda Holloway and her experience of trying to fix the interest rate on her home loan with Standard Bank (“You can’t bank on fixing your interest rate”). De Stadler said that Holloway could have recourse under the Consumer Protection Act (CPA).
De Stadler said the CPA applied “fully to a case such as this, because it covers the service rendered in the context of a credit agreement”.
Reader David Raphaely points out that Holloway’s home loan agreement with Standard Bank was entered into before April 1, 2011, which is when the CPA came into effect. “The Act is prospective and not a retrospective, therefore I cannot understand what protection Belinda Holloway would have under this Act.”
In response, De Stadler says she concedes that Holloway would not have a claim under the CPA, “as the conduct in question occurred before the Act came into operation but, more importantly, because the bank eventually fixed her interest rate”.
But, she says, “it is still possible that the National Consumer Commissioner could order the bank to clarify its contracts and marketing material”.
Now that the CPA is in force, a consumer would have grounds to object to a bank stating (either in a contract or otherwise) that a client can apply for a fixed interest rate at any time, whereas the availability of the fixed interest rate is, in fact, subject to the discretion of the bank, De Stadler says.
“This, coupled with the type of treatment received by Holloway, is a contravention of section 41 of the CPA, which provides that a supplier may not make misleading or deceptive statements in a contract or in promotional material.”
Section 41 of the Act states consumers have the right to fair and responsible marketing. This means that all material facts relating to a product or service must be disclosed to you.