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Hawks probe fake garnishees; arrests to follow

Notable debt collector implicated.

JOHANNESBURG – A Hawks investigation into fraudulent garnishees has reached a “mature stage” with arrests expected soon.

This is according to Hawks spokesperson Captain Paul Ramoloko, and follows the implication of a second major debt collector, Draft Services, in the debacle.

Ramoloko said the unit is “confident that individuals will be identified who will have to take responsibility for this crime”.

Draft collects debt on behalf of notable unsecured lenders including Best Debt Finance and Letsatsi Loans Finance and is backed by Roodepoort based law firm, De Kooker Attorneys.

The Hawks investigation comes hot on the heals of a Moneyweb exposé, which revealed that court documents associated with garnishees secured by Syndicated Debt Collectors could not be retrieved by the Krugersdorp Magistrate’s Court.

Letters issued by the Krugersdorp Court subsequently stated that respective Syndicated garnishees “appear to be fraudulent” as “the matter does not exist and was not issued by the Magistrate’s Court”.

Draft was implicated after Hilton Dube, an audit team leader at Summit Garnishee Solutions, furnished Moneyweb with a host of similar court letters stating that Draft garnishees through Krugersdorp appear to be fraudulent.

Both Draft and Atlas have refused to comment in detail on the matter, stating that doing so might compromise the Hawks’ investigation.

Both entities maintain their innocence.

It remains unclear who is suspected to be at the heart of the fraud. However, Ramoloko did state that “Atlas is the source of our [the Hawks] information”.

Syndicated is the sole debt collections’ entity used by major lender Atlas Finance and is owned by Atlas CEO, Jack Halfon.

Halforn previously said that documentation provided to Atlas by Moneyweb had been passed on to the Hawks to inform its inquiry.

Summit’s Dube also alleges that Draft attempted to forge a letter on a Krugersdorp Magistrate’s Court letter head, in which it is stated that court files and case numbers related to Draft garnishees are valid case numbers of the court.

This letter was sent to Dube, by Draft CEO Morné Olivier in defence of allegations of fraud.

“We have this letter which they claim was sent by the court in which they state their files are valid … But when we took this up with the court they denied that the letter was authored by them,” Dube says.

Olivier has refused to comment on the matter stating “We deny any and all allegations against Draft. The Hawks are busy investigating the case and therefore we can’t and won’t say or do anything that could impede the investigation.”

Timeline

2012/09/16

Platinum miner repays R11690 on R1000 loan

Moneyweb publishes garnishee orders which show lawyers to be abusing loan defaulters by charging fees in excess of ten times the outstanding loan.

2012/09/19

Excessive debt-collection fees reviewed

The Law Society of the Northern Society commits to investigate cases of excessive abuse of garnishees. It would later retract on this commitment.

2012/09/20 

SA workers trapped in debt hell<

Moneyweb reveals as much as 40% of the income earned by SA’s workforce is being directed towards the repayment of debt.

Law Society blasts Credit Regulator

The head of the Law Society of the Northern Provinces has attacked the National Credit Regulator (NCR) for failing to curb rampant indebtedness amongst SA’s workforce and for allowing microlenders to exploit the financially illiterate marking the beginning of a dispute relating to the interpretation of the National Credit Act (NCA).

2012/09/26

Lawyers’ debt collection fees could be illegal

National Credit Regulator says lawyers charging outside of the law. 

2012/09/27

Credit regulator “shocked” by loan abuse

Tells Moneyweb it will investigate garnishee orders after reports that a platinum miner repays R11690 on R1000 loan

2012/10/01

Financially illiterate miners debt shocker

Moneyweb reveals chronic indebtedness, exacerbated by alleged legal malpractice, is being linked to the recent labour unrest to have swept through SA’s mining sector.

2012/10/08

Moneyweb reports show that it is difficult to so how far reaching SA’s debt problem is Unsecured lending: What the data is not telling us

2012/10/09

Unsecured lending: What the data is not telling us

It is unclear how indebted those earning less than R15 000 per month are. 

2012/10/09

Credit Regulator swoops on Marikana micro-lenders following the above reports

2012/10/10 

Capitec, Abil, FNB being probed

Capitec and FNB deny they are part of an official probe. The NCR has been conducting a review of players in the unsecured lending space (including African Bank) for a number of months now, Abil says.

2012/10/11

Davies links Marikana violence to indebtedness

Trade and Industry Minister Rob Davies links the abuse uncovered by Moneyweb to levels of indebtedness amongst Marikana miners which in turn served as a catalyst for strike violence. In a radio podcast with Alec Hogg he commits to look into the NCR’s attempt to deny it named the major lenders it had investigated.

2012/10/17

Finance Minister Pravin Gordhan tells banks to stop exploiting the poor

Unsecured lending to low-income people is a “problem”, he warns

2012/10/24

South Africans and debt – it’s worse than it seems

Data shows consumers using debt to finance living expenses. 

2012/10/26

Credit Ombud slams debt collectors

Concerned about debt collection charges. 

2012/10/28

Garnishee fraud uncovered

A major lender, the Hawks and SA courts. 

2012/10/31

Absa client charged over R84000 on an R8000 loan

Blames “internal error”.

2012/11/01

Major retail banks agree not to use garnishees

Major banks agree to review affordability assessments, asks for a neutral payment system. 

2012/11/02

Credit Ombud welcomes debt-counselling review

Approves of National Treasury and Basa announcement.

2012/11/06

Garnishee fraud debacle widens

Magistrate’s Court investigating debt collectors. 

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