Regulator takes action against suspect home loan scheme

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Ian McCabe and his lawyer Fritz Sonnenberg told to refund clients.

JOHANNESBURG - The National Credit Regulator (NCR) has instructed Ian McCabe and his lawyer associate Fritz Sonnenberg to refund all "deposits" they have accepted from hopeful borrowers.

Realestateweb has previously alerted readers of several warning signs relating to McCabe's home loan scheme. The most obvious was that it sounded too good to be true.

On Thursday NCR CEO Gabriel Davel issued a "notice of non-compliance" to McCabe, and the entities through which he has conducted business: Arctogen Investments, PKA Financial Services and Quickvest. The notice can be downloaded here.

At the time of writing, Sonnenberg and McCabe had not responded to a request for comment.

The notice accuses McCabe of breaching several sections of the National Credit Act. This contrasts sharply with what Sonnenberg has previously told Realestateweb, namely that his "client has complied with the provisions of the NCA".

Sonnenberg is a well known property attorney in Cape Town. He also owns a Seeff franchise. He describes himself as Arctogen's "bond registration attorney". By his own admission, Sonnenberg has accepted "deposits" of more than R1m from about 100 clients.

As an expert on the law and property transactions, it is difficult to imagine that Sonnenberg was unaware of his client's alleged contraventions.

The NCR accuses McCabe of the following contraventions:

Providing credit under at least 100 agreements without registering with the National Credit Regulator;
Using the number of another registered credit provider;
Requiring clients to pay a deposit or fee which is not listed as a permissible fee or charge;
Failure to properly assess clients' financial situations or their understanding of the risks and costs of the proposed loans;
Failure to properly disclose the costs and details of the loan.

The NCR has told McCabe to refund all deposits made to him, Quickvest, Arctogen, PKA or Sonnenberg within 15 business days of receipt of the notice.

McCabe is required to furnish the NCR with proof of these refunds within 25 days of receipt of the notice.

Also involved in this scheme is Claudia MacBean, a broker who has been assisting McCabe in extracting "deposits" from clients. MacBean is the sole member of a close corporation that trades under the name M&S Financial Image Consultants. MacBean continued to encourage clients to pay deposits, even after it became impossible to ignore the home loan scheme's troubles.

Write to Julius Cobbett: julius@moneyweb.co.za

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