Consumer Protection: Input from Department of Trade and Industry (Consumer Coprprate Regulation Division), National Consumer Commission, National Credit Regulator & National Consumer Tribunal

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Trade, Industry and Competition

29 July 2014
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

 The Consumer and Corporate Regulation Division (CCRD) of the Department of Trade and Industry (DTI) briefed the Committee on its work, particularly in relation to consumer protection. The presentation looked at the pertinent objectives of the Division, operational context and programme 5 of Vote 36, World Bank ratings, achievements with credit regulation and consumer protection, the removal of credit information, concerns of over indebtedness and access to rural areas.

The Committee also looked at issues of the agencies beginning with the National Credit Regulator (NCR) looking at the number of credit active consumers and those with impaired records, the percentage distribution of disbursement per credit type, investigations conducted and debt counselling. With the National Consumer Commission (NCC), the briefing covered investigations and challenges while with the National Credit Tribunal (NCT) the briefing discussed challenges and priority areas of the agency.

The agencies themselves gave brief input with the NCR highlighting the issue of Wonga credit providers, unsecured lending and investigations. The NCT also discussed the Wonga matter along with the opportunistic behaviour of lawyers, accessibility, communication and capacity building and the move from manual to automated systems. The NCC raised issues relating to the agency’s approach, mandate, backlogs, results, inspections and the recalling of products.

The Committee sought a number of written status reports on Wonga credit providers, the South African Social Security Agency (SASSA) debit cards and the Department of Social Development and the clear flouting of rules on motor vehicle towing and storage fees. Members raised a number of questions for the NCC on action taken against holiday clubs, the capping of cellphone contracts, unauthorised data downloads and international roaming and the consumer goods council. The Committee also enquired about trends in recalled products, meat labelling, medical aid complaints, funding, vacant posts and motor vehicle insurance premiums.

With the NCR, the Members asked about companies repackaging debts, inspections and the presence of the Regulator in the legal market. 

After the briefing, the Committee discussed the draft Committee programme for the next parliamentary term looking at issues to be discussed, oversight visits and engagements with the Minister.

Meeting report


The Chairperson highlighted a number of Members of the Committee had taken ill. The extended medical leave of Mr O Ambrosini was noted along with the apology from Mr B Mkongi (ANC). Mr A Alberts (FF+) would be late as his flight had been delayed.

The Chairperson appreciated the attendance of some Muslim officials of the Department, like Commissioner Ebrahim Mohammed, despite celebrating Eid yesterday, a very special time of the year.

There were no apologies from the Department of Trade and Industry (DTI) – all officials were in attendance.

The Committee adopted the agenda for the day.

The DTI: Consumer and Corporate Regulation, Presentation to the Committee 

Ms Zodwa Ntuli, DDG: Consumer and Corporate Regulation Division (CCRD), DTI, explained that the most pertinent of the CCRD’s objectives included the creation of a business regulatory environment that promoted competitive, fair and efficient markets and to provide access to redress for economic citizens in order to increase confidence in the markets.

Moving to the operational context and programme 5 of Vote 36, the areas of emphasis were on policy and legislative development in terms of policy development, legislative drafting, legislative reviews, legislative audits, drafting and issuing of regulations, amendments of laws and regulation. With enforcement and compliance, the emphasis was on policy and legislative briefs and reviews, research and trend analysis, market surveys and regulatory impact assessments. With regulatory services, concentration would be on the funding of agencies, sustainability and effectiveness of agencies, performance monitoring and evaluation, leadership of agencies, accountability and oversight for agencies.

Ms Ntuli highlighted the country’s World Bank rating according to the Doing Business Survey where it was found that SA was still facing challenges in getting electricity, trading across borders and registering property and although it needed to improve in these areas, the country was far ahead of its BRICS counterparts. 

The achievements of the CCRD were notably around consumer protection with the Consumer Protection Act (CPA) (98 of 2008) being promulgated and regulations were issued. There was also the establishment of the National Consumer Commission with transfer of staff from the DTI Office of Consumer Protection. Regulations were published for genetically modified organisms with a consultative conference held on 25 July 2014. A notice was published on the labelling of goods originating from East Jerusalem, Gaza or the West Bank in terms of section 24 of the CPA and consumer education and awareness campaigns were conducted. A notice was also published on meat labelling following the meat scandal.

Achievements on credit regulation included the review of the National Credit Policy to reflect on the appropriateness of policy positions and instruments employed, the National Credit Act was amended by the National Credit Amendment Act 19 of 2014, a regulatory impact assessment on the amendment process was conducted and a report reduced, debt counselling regulations were developed to address challenges at magistrates courts relating to this process, draft regulations for the National Credit Amendment Act were finalised and will be published by the end of July 2014 and education and awareness campaigns were to be conducted. Education and awareness was challenging as reaching consumers across the country was a difficult task but the agencies were doing their best to ensure accessibility. 

Ms Ntuli moved on to discuss the removal of credit information particularly because of the concern about those blacklisted who could not access credit and employment. With the notice on the removal of adverse credit information and paid up judgments, which was published in February 2014 and became effective on 1 April 2014, all credit bureaus complied with the notice after working closely with the NCR. The notice directly benefited about three million consumers with 4.5 million accounts. The NCR was assessing submitted reports by the bureaus after which a report with conclusive figures would be submitted to the Minister. 

Ms Ntuli stated there were concerns of over-indebtedness but a joint committee between National Treasury and the Department of Justice and Correctional Services would work on these issues. Expensive monthly loans, or payday loans, were a worrying issue in this regard. These loans were paid at the beginning of the month and by the end of the month the consumer had to pay at extreme interest rates which kept the consumer in a debt cycle continuously taking loans. The cost of credit and credit insurance was also being researched by the NCR. Consumers were paying unnecessary or multiple insurances and regulations in this area would be published soon. There were significant concerns around unsecured lending when the practice was abused.

To access to rural areas, a Memorandum of Understanding was negotiated between the DTI and the Congress of Traditional Leaders of SA (Contralesa) where a partnership was launched on 24 November 2011. In 2012/13, 50 field workers were deployed in all provinces assisting communities with various queries on consumers, establishing co-ops etc. Agencies utilised field workers for educational outreaches, workshops and referrals across all provinces. These field workers will also assist with the recording and registering of indigenous knowledge and would be based in the tribal council offices. Furthermore, some fieldworkers already received permanent positions in the government sector.

Moving onto the issues of the National Credit Regulator (NRC), the total number of credit active consumers by the end of March 2014 stood at 21.71 million and of these consumers 56%, or 12.11 million were currently in good standing. This would be improved on. The number of consumers with impaired records decreased by 329, 000 to 9.60 million by the end of March 2014 from 9.93 million in the previous quarter.

Ms Ntuli looked at the percentage distribution of disbursement per credit type noting secured credit remained the leading type of credit granted at 33% of share of credit but mortgages had shown some steady improvement in the last quarters. Mortgages had a share of 29% of new credit extensions while unsecured and credit facilities had 18% and 15% respectively. Unsecured credit had been gradually declining over the last three quarters while mortgages and secured credit had shown some steady improvement.

The NCR handled more than 580 000 calls since its inception with an average of 8000 calls per month. Consumers were awarded more than R16 million in refunds and outstanding balance adjustments. A joint two-day operation took place in the Northern Cape with the South African Police Service (SAPS) to address the illegal collection tactics by credit providers – 15 people were arrested and 620 banks cards, 114 identity documents and 577 pension cards were found. Raids were also conducted in KZN, the Western Cape and Eastern Cape.

Some examples of investigations conducted were the Marikana investigation in 2012/13 where13 micro lenders were raided and alarming and reckless lending and illegal debt collection tactics were discovered. None of these lenders were complying with the Credit Act. A follow-up was to be conducted this year and no cards as collateral were found so there was some improvement. The links between lending and poverty were stark. Standard Bank was instructed to refund clients for extra administrative charges, African Bank was investigated for reckless lending and had entered into a consent order. The bank had, in addition, paid R20 million to refund consumers while the Consumer Profile Bureau was investigated for keeping the cause of death information on their records and a compliance notice was issued in this regard. With Wonga Finance, the company had conduced improper affordability assessments and record keeping and for this were issued a compliance notice but this issue would be spoken about in more detail later in the meeting. Satinsky 128 and the R699 vehicle scheme were investigated for unlawful credit marketing practices and for failure to disclose the total cost of credit and a compliance notice was issued. Junk Mail Publishing were also issued with a compliance notice for publishing credit adverts with “blacklisted customers welcomed”.

Ms Ntuli moved onto debt counselling noting the current number of debt counsellors registered stood at 2136. 82 964 customers applied for debt counselling during the previous financial year. 279 797 applications for debt counselling to date from inception were lodged – since the beginning of 2014, on average, 10 90 applications were lodged per month. There were 5544 clearance certificates issued as at June 2014. With the payment distribution, new amendments were passed to regulate this distribution more effectively and curb costs to consumers

Moving onto the National Consumer Commission (NCC) in 2011/12, the calls and complaints logged were very high as the role of other regulators diminished and a result was that all calls were logged with the NCC. In 2012/13, the strategy of the Commission was redefined and the NCC, as a result, focused on referrals and investigations. In 2013/14, the emphasis was more on referrals, investigations and finalising the backlog.

Investigations were conducted into meat labelling with a notice on the meat labelling being enforced. With the cellphone agreement, contract terms and conditions were revised and included in the pricing. The contracts were 100% but the area still outstanding was section 63 which spoke to the expiry of data/airtime. The NCC would specifically focus on this as it was a pertinent area of concern. An investigation also led to the revision of the terms and conditions of the E-Toll pre-implementation and it was found the collection method of the South African National Roads Agency Limited (SANRAL) was unconscionable during the implementation phase. 

Ms Ntuli moved onto the National Consumer Tribunal (NCT) noting the agency received many different types of applications and referrals. The majority of the applications were for consent forms in respect of debt re-arrangement agreements.

Looking at the challenges of the agencies collectively, there was the issue of funding continued to be limited for the expanding mandate of the NRC, NCC and NCT but donor funding was sourced where possible. There was also the challenge of an increasing workload for the NCR and NCC which impacted on the human and financial resources of the NCT but prioritisation was being applied to manage the workload effectively. Functioning on the manual and ageing IT systems were challenging but the NCR would be replacing the system while the NCT would be automating their manual system. There were scare skills when dealing with specialised regulatory issues and this remained a challenge but all entities were implementing internships to grow their own trees. Space continued to be a challenge for the NCR but the financial resources available did not permit bigger premises.

Priority areas for the CCRD included regulations for the implementation of the National Credit Amendment Act as well as genetically modified organisms, to strengthen education and awareness programmes especially through radio and outreach programs in rural areas with Contralesa, build capacity for inspections across agencies to enable raids and mystery shopping to uncover violations proactively, improve the visibility and accessibility of agencies especially with the NCC, conducting regulatory impact assessments on an ongoing basis to detect and remove unnecessary and redundant regulations and to appeal for funding for the agencies to implement their mandate effectively.

Wonga Issue

The Chairperson reminded Members this issue was raised about three weeks ago and the Committee did not appreciate the company slipping through and acquiring a licence. 

Ms Nomsa Motshegare, CFO, NCR, explained Wonga was registered in June 2011 because it met the regulations of the NRC. There were many innovative credit lenders out there but some ended up contravening the Credit Act like Wonga did. Compliance officers had picked up on these areas of contravention and a compliance notice was issued on 23 July 2014. Wonga was not confirming consumer incomes and living expenses and was not doing proper affordability assessments but was instead relying on the word of the consumers. Wonga needed to comply with the notice by 30 August 2014. There were conditions of registration for all credit providers registered with the NRC and one of the conditions was a commitment to combating over indebtedness. 


The Chairperson looked at the compliance notice for Wonga and it appeared there was specific time periods set out for compliance and sets taken. This needed to be strictly enforced. Wonga was thrown out of Britain for these practices and she wanted the full weight of the law used against Wonga and such providers. She urged that the company be dealt with harshly and the Committee wanted it fully dealt with and a status report by the end of August.

Mr Lesuba Mashapa, Company Secretary, NCR, said that action had been taken against Wonga and the Department was very concerned about reckless lending given the state of consumer indebtedness in the country. Time frames were specific in the compliance notice and the Department believed Wonga would comply.

Mr G Hill-Lewis (DA) understood the need for a full affordability assessment but how was this married with the company’s business model of “fast, quick” loans on an online platform.

The Chairperson expressed that legal people working with credit providers needed to be dealt with more harshly in abusing laws.

National Credit Regulator

Mr Mashapa said basic minimum standards needed to be upheld including requirements that all credit providers verify consumer income. Despite the need for innovation there could not be exceptions with such a critical area. Without these conditions, consumers would b given reckless credit. Wonga’s business model was estimating income from information on spending patterns provided by credit bureaus – this was not accurate as the information was not in real time. Looking at short term credit this was considered a loan of up to R8000 with a capped interest rate of 5% per month which was about R150. The NCR did not have many concerns with short term credit as it was not a significant portion of debtors’ book. However there was concern with the abuse of affordability assessments but regulations to be published by the Department would strengthen that.

Ms Motshegare discussed unsecured credit noting that according to the loan book, it had increased by 47% year on year but this percentage had come down drastically to 5% by 30 March 2014. With the Satinsky 128 R699 vehicle scheme, the NCR would be helping consumers in the Eastern Cape and it was dealing with the banks now through an investigation. With consumer education, in addition to what was highlighted in the presentation, the Regulator was engaging with the SA Council of Churches and were proudly training 20 learners through a learnership programme. This was one of the NCR’s flagship projects in conjunction with the BANKSETA.

National Credit Tribunal (NCT)

Ms Diane Terblanche, Executive Chairperson, NCT, spoke to the Wonga issue noting that irrespective of the business model, the basic principles of the National Credit Act was applicable to all and the Act was interpreted as being neutral to the mode of the business. With the opportunistic behaviour of lawyers, the NCT were training lawyers on the Consumer Protection Act and National Credit Regulator Act. The NCT, with regard to accessibility for consumers, had jurisdiction over all SA but were based in Centurion. Hearings were hosted via Skype and this allowed for parties to be linked irrespective of where they were located. This was done through assistance from the consumer offices in the provinces. This saved costs and eliminated the intimidating factor of the process. Accessibility would also be enhanced once the NCT asked the Department to make certain minor changes to the regulations to allow for e-filing and so that serf via registered mail was no longer paid as it was a costly exercise.

Ms Terblanche discussed communication and capacity building, stating that training was being provided to judges, magistrates and consumer affairs officers in the provinces so that there was more access across the country to redress that the legislation made provision for. Given the mandate of the NCT, turnaround times were a challenge. It was easy for the Tribunal to get 500 filings in one day with each complaint dealt with within 5 days in terms of the regulations. She was proud to say this had been reduced to 3.9 days on average. There was a student contingent pool, as of last year, when there was a spike in the number of cases, to help with the workload like on a Saturday or Sunday morning. Through this students gained work experience and were trained and assessed before the time of involvement. This was a successful project after the past year along with the internship programme. These interns and students had been very successful in going on to find permanent employment.

With the move from a manual to automated system, software for debt rearrangements was being written which would be piloted. Emails could then be sent which would then populate the NCT’s database. This saved costs on printing and increased turnaround time. The project was still in the pilot phase and the NCT would be getting feedback from those debt councillors who participated voluntarily. Everything in this regard was done with the assistance of the regulators – the NCR or the NCC. 

The Chairperson was glad there was a sound rapport between the agencies.

National Consumer Commission (NCC)

Mr Ebrahim Mohammed, Commissioner, NCC, explained the initial approach of the NCC was to take on all matters and the Commission was therefore inundated with thousands of matters and complaints  and a backlog then ensued. This was compounded by several, if not all, compliance notices issued by the Commission had been denied by the Consumer Tribunal. This drained the NCC some of the resources in the need to pay the huge legal costs running into millions of Rands. In November 2012, the strategy of the NCC was reviewed and Section Nine of the Act was looked at which said the NCC was to investigate complaints and launch inspections. Finances were looked at in this regard. It was impossible for the Commission to investigate and resolve every single case/compliant. It was decided by the Commission, in terms of the mandate, to establish a consumer protection network to ensure consumers received rapid redress at no cost to them. Emerging trends were studied to uphold this network through different industries and accreditation was awaited. The role of the NCC was to ensure and sustain an efficient network of consumer protection agencies and to conduct investigations and inspections. Emphasis was placed on vulnerable consumers including the urban poor, first time home buyers or motor vehicle purchasers and not just the elderly, the young, the disabled or the rural poor.

The backlog mentioned in the briefing from 2011/12 had been resolved but there was threat of another backlog however a plan was to out in place to avoid this so there was no current backlog. The Deputy Commissioner had presented him with the plan and staff would begin coming in over weekends to ensure a backlog did not develop.

The Commission had some excellent results with work done on conciliations but a key area of concern were monthly cellphone bills going beyond what consumers were used to paying. These companies had done away with limits to bills and had not informed consumers. The NCC appeared on TV to inform consumers that they needed to be more firm and read their legal contracts carefully. Consumers were asked to ask the cellphone companies to set limits.

Mr Mohammed explained the NCC met regularly with municipalities like the City of Joburg and Tshwane to discuss complaints and matters relating to incorrect billing. This included SANRAL and the E-Toll billing. The Commission assisted the City of Joburg with a complaints mechanism resolution in dealing with consumers.

The Commission, initially, did not focus much on inspections but this had been increased to deal with labelling, visibility of pricing, expired goods, country of origin labelling and the like. Because of the increase in inspections, the NCC had issued about 181 consent orders per month which was very good. However much more wok was needed in the area of inspectors but additional funding would be required and the support of the Committee was sought in this regard. Similarly, funding was needed to increase the experience capacity among the Commission’s staff.

Mr Mohammed explained the NCC was working with industries, which were proactive, around the issue of recalls of defective goods. Not appearing in the presentation was Remington firearm models which were recalled because firearms would discharge at the slightest provocation. The NCC issued a media statement on the matter. One of the Commission’s staff members had read about the recall of thousands of motor vehicles in Europe because of faulty airbags and this prompted the NCC to proactively ask the motor industry about the safety of airbags here in SA


The Chairperson was impressed with the list of recalled products. She noted an incorrect date on one of the graphs of the presentation.

Ms P Mantashe (ANC) said the presentation highlighted the need for Committee assistance in funding for inspections. She felt the Department could not just ask for funding without showing the current inspection complement and what was needed. The Committee could not make a blanket approval or support for funding.

The Chairperson noted that this was a good point. She reminded Members that broad questions were to be posed for each entity at a time instead of jumping all over the show.

Mr Mohammed said the Commission would prepare a document for Members, through the Department, on the need for funding and Committee support.

Mr A Alberts (FF+) apologised for his late arrival. He asked the NCC for an indication of when outstanding reports on the Holiday Clubs would be received. What was being done about those people being taken to court in this case?

Ms Thezi Mabuza, Deputy Commissioner, NCC, explained that an investigation had already been completed into these holiday clubs. Those implicated were taken to court in terms of credit agreements and for provisions of conditions which were supposed to be met like bookings. Violations were to be presented to the NCT and there would then be an order for everyone affected to bring the issue up and to benefit from the investigation. Three major companies and approximately 598 complaints were being dealt with.

Ms Ntuli added that weight must be given to investigations given the large amount of complaints received on holiday clubs. This was evident through a simple Google or Hello Peter search. This was unconscionable behaviour abusing consumers. Hello Peter was used by the Department as an indication of where the problems were and considering that there were many South Africans who did not have access to the internet, these numbers would be even higher.

Mr Alberts felt it was a good idea to have caps on cellphone contracts  and wanted to know if the Commission would advise cellphone companies on unauthorised data downloads and international roaming. 

Mr Mohammed said the Commission had already appeared on radio and TV to explain to consumers but the engagement with cellphone companies still needed to take place but processes were in place.

Ms Ntuli added that the unconscionable action of cellphone companies was one of the reasons for the promulgation of the Consumer Protection Act. The NCC was instructed to proactively deal with such cases as consumers needed to be protected and prevent them from becoming indebted by default. 

Mr Alberts was concerned about SANRAL equipment being used in roadblocks which created the impression that motorists were being pulled-over for e-tags. What was the Department’s view on this practice?

Mr Hill-Lewis raised a question about the consumer goods council. He felt there was little exposure of it in SA and very few South Africans knew that the council should be their first port of call in the case of disputes. He asked whether money should be put aside toward increasing awareness around the consumer goods council so that people were aware instead of going to the NCC as the first port of call. He was pleased to hear about the move toward digital processing – this was an excellent initiative which should be replicated across government. Governments around the world were moving toward e-governance to increase access and speed up processes. With the case of Wonga, while credit assessments were compulsory, consumers could not be bound to paper processes because in 10 to 15 years, nothing would be done on paper so “we needed to stay ahead of the curve”.

Ms Mabuza said the consumer goods ombud was not taking the work of the NCC but it had a unique space in consumer protection. The council had proposed to be registered as an ombud and the proposal had been presented to Minister. From there a regulation could be issued and based on the regulation, funds would be allocated and then the process of sensitising the public.   

Ms Terblanche said the e-filing and e-governance was an important matter for accessibility and operations. Through the Department, the NCT, was looking at commissions of oaths and documents related thereto. 

On the recalling of products, the Chairperson asked if this was as a result of proactivity or the outreach programme. With the recalled products, the predominating good being recalled was in the vehicle industry – was this a true reflection? She sought clarity on the meat labelling issue – was the matter resolved amicably? With the consumer complaints of medical aids, where would one lodge such a complaint? She asked if doctors and medical practitioners were exempt from the Consumer Act because they seemed to be a law unto themselves. Was it fair for a husband to be told the price of his wife’s operation just as she was going into theatre? The Committee was led to believe more funding was needed but the budget showed almost all posts were filled – what posts were vacant and funded and what posts were vacant but unfunded?

Ms Mabuza said prescribing consumers could complain to the Medical Schemes Council about medical schemes. There was still a grey area in terms of setting up prescribed tariffs within schedule medicines and theatre practices. The Commission was engaging the Department of Health as consumers were left in the dark with no control over what they needed as patients. This was compounded with the emotional and vulnerable state hospitalisation left one in.

Ms Ntuli added that the Consumer Protection Act did not include the medical schemes sector because it had its own procedures. But if the sector fell short in upholding these procedures, provisions in the Act would prevail. It was unconscionable to take advantage of sick consumers.

On the issue of meat labelling, Ms Mabuza stated regulations were promulgated on the issues of the right to know which species consumers were eating. Products which did not conform to labelling regulations were pulled off the shelf as had been done in the North-West and Mpumalanga. With abattoirs and the issue this raised for certain religious practices like being halaal, abattoirs needed to declare if there was cross-contamination. This was similar to labelling needed to declare cross-contamination for consumers with allergies like to nuts.

On the issue of funding and Committee assistance, Ms Ntuli apologised if the impression was created that the Department was just present to ask for funding. The Department was finding ways of working smartly with what was available. The issue was raised so that if an increased allocation opportunity came up, that the agencies be considered. 

Ms Mantashe questioned whether consumers were disadvantaged when purchasing vehicles when insurance premiums remained constant while the vehicle depreciated.  Could this be considered as an issue of non-compliance?

Ms Mabuza commented that the NCC had looked at the issue of short-term insurance bundling in the motor industry. This also applied to five-year maintenance and service schemes and coding of parts. Hopefully future engagements would lead to a breakthrough in this area as globally. It was laughable that consumers were tied into maintenance schemes for new cars. These schemes were needed when the cars were older so in this way consumers were not benefitting.       

Mr Mohammed added that the recall guidelines were issued by the NCC in 2012. Prior to any processes or problem, the issue was communicated by the relevant industry to the Commission as was obligatory under the regulations. Therefore, the legislation was proactive along with the recall register of the NCC.

Ms Ntuli also added that consumers were allowed to revisit their insurance premiums on a yearly basis but this did not happen often as consumers were not informed. Short-term insurance was handled by the Financial Services Board (FSB). When the Consumer Protection Act was processed there was an exclusion of short-term insurance from the legislation. The exclusion required short-term insurance was brought up to speed with the legislation failing which the Act would apply. The emphasis was on transparency for consumers and the NCC needed to work with the FSB to improve this space and develop regulations to be proposed to the Minister.   

The Chairperson noted there were some outstanding matters from the Committee’s last term for which written reports were sort. The first was on the South African Social Security Agency (SASSA) debit cards and the Department of Social Development (DSD). The Committee sought a written status report on the matter. The issue had gotten totally out of hand with grants being used to pay debts. The other outstanding issue related to the lack of minimum fees on the removal or towing of motor vehicles at the site of an accident and the tremendous storage fees involved. A response in writing was required on this matter. It might be useful to regulate this issue as the flouting of rules was clear. The need for doctors to clearly display their consultation fees within the medical rates might also require regulation. It was by time the medical sector was brought into line. This information was needed for Members’ constituency work. 

Mr Z Luyenge (ANC) apologised for his late arrival and was disappointed he had missed the presentation about legislation emancipating the poor. He was impressed with the cooperation with Contralesa to empower rural communities and the improvement of accessibility. 

Mr Hill-Lewis asked the NCR if the Act, which was amended earlier this year, married the need for the powerful presence of the NCR in the legal market. He felt this prescience was currently lacking. Were there plans to increase the presence in the legal market? Were there enough inspectors? Anyone could find an illegal lender without much trouble even 500m from where the Committee currently was sitting. He returned to his hobby horse of the interest rate and the punishment people taking out unsecured loans were facing because of the interest rate formulae – this needed to be fixed. He raised the issue of companies repackaging bad debt, selling it off to consumers in a new platform and then paid investors through garnishee orders. Fin24 did an investigation on a specific company and questionable practices were found involving “opportunistic lawyers” and unethically/illegally making money of the financial distress of poor consumers. The credit crises in the USA started, partly, because people were selling bad mortgages and although smaller credit contractors were being used in SA, it was the same practice.

The Chairperson noted this was quite a serious issue raised repeatedly at the end of the Committee’s last term. 

Mr Lesuba Mashapa, NCR: Company Secretary, knew the Committee had raised the concern of the interest rate for a number of years. The NCR was currently conducting a review of the interest rate after which it would engage with the DTI and stakeholders.

Short-term credit loans of up to six months were provided with interest rates of 5% per month which amounted to R150 per month. The graphs presented showed that short-term credit lending did not grow in the same way as unsecured lending. Currently this was not an issue of serious concern because of the capped interest rate. The concern was around the interest rates of unsecured loans. It was important to note that consumers were not only indebted because of bad credit practices but because of the high cost of living owing to increased petrol costs, rising inflation and other economic factors.

With the companies repackaging debt, Mr Mashapa said an investigation had been conducted into this. The NCR had a limited mandate with garnishee orders but the rules in the code of conduct would address this specific issue.

The Chairperson noted the Committee was due to meet with the Department after the constituency recess but a full written response on the matter/s was still required. The Department was to provide the information before Members left for the constituency break next week. The issue of interest rates caps was also linked to Treasury. A more effective resolution was needed because even though the Committee was doing a lot of solid work, interest rate capping remained a problem. 

Mr Hill-Lewis agreed even though he understood the limited scope for the NCR to deal with garnishee orders, there was talk of cooperation with the Department of Justice for garnishee reform. He requested an update on this issue as well.

Ms Ntuli would provide the Committee with the information sought. With the cost of credit and interest rate capping, the Department would review the matter and the Committee would be briefed on this consultative process with Treasury. With the SASSA card issue, there was a joint committee with Treasury to look at the access credit providers, or any other persons, had to these cards. In terms of the social development legislation, it was illegal to make deductions off these cards. A big enough buffer needed to be created for the Department to not allow deductions over a certain amount – public comment would be sought on this.

Mr Alberts raised the matter of collection and administrative costs which also needed to be taken into account. The Debt Collections Act was the responsibility of the Department of Justice so the DTI would need to liaise with them on the matter. 

The Chairperson noted it was a pity time had run out as these were very important issues.

Committee Programme

The Chairperson noted Committee Minutes would be adopted on Thursday.

In terms of the Committee Programme, 20 August and 2 September were dates pencilled for interaction with the Minister. 20 August was a Wednesday and never very constructive for the Committee as the Minister would be in Cabinet meetings. She mentioned the dates scheduled for interaction with the Minister as it may affect some issues raised by Members. For example, with the factoring of the effect of visa regulations on businesses, it might be better to get a response from the Minister himself instead of someone assuming the Minister’s position.

Mr D Macpherson (DA) asked if the Chairperson was in receipt of the letter on the visa regulations. He was glad the issue was on the table for discussion. He asked if the Chairperson could confirm that the Minister would answer these specific questions.

The Chairperson explained this depended on if the President invited the Minister on the same day as the Committee meeting so there were unfortunately no guarantees. Some aspects of the questions like those relating to visa regulations may only be responded by the Minister of Home Affairs but where issues pertained to the DTI, the Minister would respond to the Committee. She could not say more than this. But the Minister’s availability seemed assured for 20 August and 2 September.

Mr Macpherson asked for a follow up question.

The Chairperson did not allow this as she felt the matter had been exhausted.

She said Mr Cedrick Frolick, as Chair of Chairs, would have to look at the Committee’s programme. She was concerned that there was no oversight visits scheduled. She had discussed the possibility of leaving on a Wednesday with the Committee Secretary with Members returning on a Friday evening or Saturday morning so that oversight could be done between then. She asked Members to suggest provinces to visit as the Committee would not go back to where they had been.  

Mr Macpherson suggested that a site visit to the proposed Special Economic Zones (SEZs) would be opportune. 

The Chairperson said the idea was raised in the Management Committee (MANCO) but solid information on SEZs from the Department was awaited. 

Trade issues looked thin in the programme. Ambassador Faizel Ismail had been invited to join the Committee on 3 September 2014 but they would have to wait until Mr Frolick had a look at the programme. Mr Ismail was an international authority on these issues. In October, the Committee would be attending a seminar of the International Aeronautical Congress, of which it was a member along with Members from the Committee on Science and Technology.  

She would appreciate if Members made their apologies known before the Committee adopted Minutes, including those of the current meeting, on Thursday at 09h30/10h00.

Mr Hill-Lewis raised two matters of concern. One, he had noticed the Budget Vote Report of the Committee which appeared in the ATC differed, in terms of figures, from the Report which had been mailed to Members.  Two, he had looked through all Committee Budget Vote Reports as appearing in the ATC and had noticed that roughly half had said “Report is tabled for consideration” while the rest said “the Committee supported the budget”, as this Committee had done. There was clear confusion among Committees about which term was correct. He approached his whippery on the matter who had said Report tabled for consideration” was correct. The Chief Whip’s Forum would be approached for further clarity.  He felt it unfortunate that Members were forced to either support the budget or abstain in a Committee meeting as this pre-empted the decision of his caucus.

The Chairperson said this matter would be raised further down the line. The reasons and objections had to be noted for the Committees which had said “in support of the budget” while the Committee’s which had said “to be tabled for consideration” did not have to do so. Part of the problem was that some of the rules were taken by the Rules Committee but had not yet been tabled in the House yet. The rules governed these matters.

She was not aware that any figures had been changed as she had signed off the Report as it appeared in the ATC. She assumed any changes would have been made at the editing unit as they were not made by her, the Secretary or any other Committee staff.

The first draft of the Committee Programme was adopted in principle by Mr Macpherson and seconded by Mr Alberts.

The meeting was adjourned. 

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