Consumer rights upheld: Court quashes repossession order over email error

The mandatory formal letter a credit provider must send to a consumer who is in default of a credit agreement, must be sent to the correct address, as chosen by the consumer, before a credit provider can simply forge ahead with legal action.

This was once again highlighted by the Gauteng High Court, Pretoria, in a case where a woman, only identified as Mrs NM, complained that she never got wind of court action to repossess her car.

The next thing she knew, her car was repossessed following an application by Mercedes Benz Financial Service in this regard and the vehicle was at an auction house, ready to be sold.

NM said as she never knew of the court proceedings, she was unable to defend the matter. She subsequently asked the court to overturn the order in favour of the financial institution.

The main issue which came to the fore, was that Mercedes Benz Financial Service used the wrong email address to which it sent her the mandatory Section 129 (1) of the National Credit Act notice.

This is a mandatory formal letter a credit provider must send, as it informs the consumer of their arrears, outlines their legal rights and it provides options to resolve the default. This includes referring the matter to a debt counsellor, before the credit provider pursues legal action.

The applicant and the respondent entered into a written agreement in terms of which she undertook to repay the purchase price in installments. Mercedes Benz Financial Service retained ownership of the vehicle until payment of the last instalment.

The applicant provided an email address in the application for credit. She elected this as her preferred method of communication. In 2023, she received an email from a law firm sent to the chosen address. They advised her that she was in arrears and asked when she would pay the arrears. The court noted that they sent the email to the same email address that the applicant appointed in the agreement.

The applicant responded on the same day and explained that the vehicle was in the possession of her ex-husband. The attorneys advised her to discuss the matter with the respondent, which she did, but she received no response.

A few weeks later, the lawyers sent her another message and said that they had been instructed to collect the arrears. The applicant again responded promptly. She explained that she had attempted to contact the respondent and that she had received no response. The lawyers supplied direct contact details for certain employees of the respondent, including the email for the relevant team leader.

The woman once again contacted the credit provider via email, but received no response. 

She then obtained an order that the Sheriff had to fetch the car from her ex-husband, but they were not able to locate him in order to serve the application. 

Eventually the applicant managed to track the vehicle. She found that it was at the premises of an auction house. She and her attorney went to the auction house, but were told that the vehicle had been repossessed.

They eventually managed to get access to the Court Online file and it became apparent that the Section 129 notice had been sent by email, but to a different address. 

In overturning the default judgment against her, the court said as she chose a specific address for all correspondence with the credit provider, the latter had to ensure compliance. Thus, the default judgment was erroneously granted.

Cape Times