WeeklySA_AdminPAID OFF HOME LOAN 15 YEARS AGO: Premiums were not automatically stopped
By Thuli Zungu
Standard Bank is accused of enriching itself unjustifiably on a policy that was terminated when Pinkie Tendani of Mondeor, south of Gauteng paid off her bond 15 years ago. Tendani, 52, said when she paid off her bond, she was relieved to know that she owns her house and no one would take it away from her.
When she was awarded a feeding scheme tender six months later, she discovered that the bank had sent adverse information to the credit bureau for unpaid debit orders.
“With the low credit rating and adverse information on my profile I was going to lose the tender and with the advice of my banker at that desperate moment I took a loan of R387 000 against my bond account to settle these unpaid debit orders,” she said.
Tendani said her banker should have known that if a bond is paid up, the bond cover ceases to exist, but nonetheless advised her to take a loan against it, said a mother of four. She said when she paid off her bond in 2005 the bank should have stopped debiting premiums as the policy came to an end in terms of clause 6.1 (a) and (b) of the policy but it was not.
“The premiums should have automatically stopped according to their own terms and conditions, but I now suffer because of the maladministration of their system,” she said Over the years as and when the debit orders bounced the bank was happy to top these onto her bond, she said. She said it was only in 2018 when she asked the bank to send her the copy of her bond contract that she realised that she is persecuted for a policy that lapsed fifteen years.
“By that time, I had already repaid over R1 million which is triple the amount I had borrowed,” Tendani said. Her current balance stands at R720 000 and is repaying R7 200 a month without fail, she said. When she raised this error three years ago Standard Bank admitted the error but insisted on refunding half the amount on the ground her matter had prescribed.
She said the bank would have continued to debit her account if she did not pick it up as they had failed to do so when they were expected to do so.
“The bank shifted the blame to me and said they should have raised their unauthorised debit order before the end of 2008, when there would have been no need for me to do so had they terminated the policy,” Tendani said.
It was with the intervention of the Banking Ombudsman that Standard bank admitted its error. What was most unfair was that the Banking Ombuds felt that the bank should only repay her half the amount.
At first the banking Ombud ruled in favour of the bank and later in her after she challenged their finding.
She said what frustrated her the most is that the Banks Ombudsman regards fraud (unauthorised debit) as an error. The Ombuds finding which Consumer Eye has seen states that the bank made an error and the assurance premiums were debited on her account since 2005 until she cancelled them. (the cancellation was in 2018) “Our office (Banking Ombuds) made a finding that the said policy terminated in 2005 and as a result you should be refunded your premiums that were debited on your account,” the Ombuds finding reads.
It further reads “Since your cause of complaint dates back to 2005, and in considering all the facts of the matter, we therefore found that the bank must refund you 50% of all the premiums debited from your bond account since 2005 and the bank agreed with our recommendation.”
This bank error and finding of the Banking Ombuds do not solve Ngwenya’s problem, as it favours the bank more that her as an aggrieved consumer, she said.
She said while this injustice prevailed her family was forced to borrow from everyone just to maintain these false instalments.
“Clearly, according to the banking Ombuds the bank must be enriched at my expense because I still have to repay half of these debit orders which are unjustified.
Where is justice in this?” said a baffled Tendani Her business failed and she became a talk of the town because she was borrowing from anyone who could assist her financially.
“We were robbed of our financial freedom and an opportunity to give our children a proper meal and better education,” she said “I have asked both the bank and ombudsman that if the bank has made an error, then why should we suffer the consequences?
I can’t get the proper answer, “she said. On the May 2019 banks ombudsman ruling says that in all matters law must be applied. “So which law says the debt that accumulated because of the bank’s error should be ours,” she asked. Instead, the Banks Ombudsman advised her to approach the courts as they won’t change their minds, said Tendani.
Tendani said after contacting Consumer Eye she was advised that she signed a second policy.
“Why is this raised now and why does it have the same number as the terminated one and the amount has never been adjusted,” she said
Tendani said another sad thing is that when completing the Ombuds assistant forms she was required to sign her rights away by stating that she would not have the media involved. Tendani said she is as good as dead, considering what the Ombudsman has done to her.
Standard Bank spokesperson Ross Linstrom said the bank participated in the process as set down by the Banking Ombud and supplied them with all the relevant information they needed to make their findings.
He said they have complied with the Ombud’s findings adding that if Tendani still feels aggrieved that her matter was not properly investigated she should approach the Ombud again.
Standard Bank and the Ombudsman have now arranged an urgent meeting with Tendani to try and resolve her matter. The meeting is scheduled for the coming week.
