Banks repossessing your car without following the rules – What to watch out for – TopAuto
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Thursday / 11 August 2022
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Banks repossessing your car without following the rules – What to watch out for

South African car owners are not obligated to hand their vehicle over to anyone, even if they claim they are repossessing the vehicle, unless the individuals meet specific criteria.

This includes:

  • The individual providing proof they are the Sheriff of the Court
  • An original court order is shown for the repossession

This is according to a report by BusinessTech, which revealed that the Ombudsman for Banking Services (OBS) has seen an increase in motorists alleging “their vehicles were repossessed without them signing a voluntary termination letter or being shown a relevant court order”.

The OBS’s Reana Steyn said she has received reports that South Africans have even been approached in shopping malls by individuals who said they “work for the bank” and were there to repossess their vehicle due to non-payment.

Additionally vehicle owners have complained that they were coerced into giving the vehicles back to the bank.

The only way that a vehicle can be repossessed in the absence of the Sheriff of the Court and an original court order, is if the owner signs a voluntary termination notice, said Steyn.

“Consumers must make sure they understand exactly what they are signing before providing their signature to any documents, particularly when they are in default with their vehicle finance agreement,” said Steyn.

She added that consumers must also watch out for signing the voluntary termination notice, and the bank not then following the terms set out by the National Credit Act.

This included the bank selling the vehicle without sending a letter to the consumer advising them how much the vehicle was valued at.

Taken without consent

The report went on to provide an example of a recent case where an owner had their car taken from them without consent.

Following an investigation by the OBS, it was found that the bank had taken the car without a court order permitting it to do so.

The OBS asked the bank to then provide the voluntary termination notice the consumer gave them, allowing them to take the car.

The bank stated that the vehicle “had been taken from the complainant’s son and that no written voluntary termination notice was obtained”.

Additionally, the consumer had – through their attorney – sent a letter to the bank challenging the lawfulness of the repossession. The bank has responded, through their lawyers, to state their actions were legal.

The OBS found that this was not the case, and instructed the bank to immediately return the vehicle to its owner.

While the bank agreed to return the car, the consumer then refused to take the vehicle back – and said they would sign the voluntary termination notice.


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