The National Credit Regulator (NCR) has referred Sun Finance South Africa (Pty) (Ltd) (Sun) to the National Consumer Tribunal (Tribunal) following an investigation by the NCR which revealed that terms of the “ pawn to drive” agreement entered into by Sun Finance were in contravention of the National Credit Act.
In May 2017 the National Consumer Tribunal declared the Allied Capital “pawn your car and still drive it” scheme (“scheme”) unlawful and prohibited by the National Credit Act 34 of 2005 (“NCA”). The consumers only wanted to borrow money using their cars as security for loans” says Jacqueline Peters, Manager: Investigations and Enforcement at the NCR.
“The NCR cautions consumers against using their cars as security for loans or pawning them since they risk losing their cars if they fail to repay the loans as agreed with credit providers”, says Peters.
“The NCR will continue to investigate pawn brokers who are flouting the provisions of the NCA” concluded Peters
