There are many reasons why a consumer may default in his
payments to a credit provider. Notwithstanding these reasons, the credit
provider must follow certain procedures to enforce the agreement.
The first step, is for the credit provider to deliver to the
consumer a written notice in terms of Section 129(1)(a) of the National Credit
Act 34 of 2005 (“NCA”), notifying the consumer of the default and proposals as
to what the consumer may do to resolve any disputes that he/she may have with
the agreement or to work out a plan for the payments due under the agreement to
be brought up to date. The consumer has ten business days to respond to the
credit provider once he/she has received the letter. It must be noted though,
that the consumer is under no obligation to respond to the notice in terms of
Section 129(1)(a) (“the S129 notice”).
The consumer must be in default with his/her payment for at
least twenty business days in terms of S130(1)(a) of the NCA, before the credit
provider can deliver the S129 notice to the consumer.
The consumer must further be aware that the credit provider
is legally bound to deliver the notice in terms of the S129 notice to the
address of the consumer that is cited on the credit agreement – the address
that the consumer chose when he/she signed the agreement.
The S129 notice, in terms of the Act, must be delivered to
the consumer via registered post. The word “delivered” has been interpreted by
the courts to give clarity, viz, the notice is to be dispatched to the correct
post office for the address chosen by the consumer, when the credit agreement
was signed, or to an adult at the location designated by the consumer, when the
credit agreement was signed. Should the credit provider follow one of the above
methods for delivery of the S129 notice, but the consumer failed to receive it
by not collecting the notice from the post office, it would not be the fault of
the credit provider and it would be deemed that the credit provider followed
the “letter of the law” and would thus be within its rights to proceed with the
issuing and serving of the summons.
Thus, it is not a defence for the consumer to raise that the
notice was not delivered to him/her, as was explained by the Constitutional
Court in the case of Kubyana v Standard
Bank of South Africa Ltd, after revisiting the majority decision held by
the Constitutional Court in the case of Sebola
and Another v Standard Bank of South Africa Ltd and Another.
It falls upon the shoulders of the consumer to inform the
credit provider, in writing, by hand or electronic mail, of any changes to
his/her designated address in respect of receiving notices which defer from the
credit agreement, to enable the credit provider to change the consumer’s
records. Should the consumer not inform the credit provider of the new details,
the credit provider will be bound to use the address as per the credit
agreement and the consequence of this, is that the consumer will not receive
the S129 notice, and when the ten business days have expired for the consumer
to timeously give the credit provider
his intentions of how he/she wishes to deal with the default payments, the
credit provider will be within its rights to proceed with the issuing and
serving of the summons, incurring legal costs for the account of the consumer.
This was held in the court case of Robertson v Firstrand Bank Ltd t/a Wesbank.