MANYANE MANYANE
Financial provider WesBank has been instructed to pay a client more than R15 000 for overcharging him.
Financial consultant NMG Consulting said the financial provider was liable to refund Shepherd an amount of R15 297.50 for overcharging him after he bought a 2014 VW through Volkswagen Financial Services (VWFS), WesBank's financial partner, in 2016.
The vehicle was valued at R369 000, and he had to pay a monthly instalment of more than R6 000.
Shepherd approached financial investigator Emerald van Zyl about his suspicions. Van Zyl took the matter to NMG Consulting, which did a recalculation and found that the bank had cheated Shepherd.
The relationship between WesBank and VWFS started in 2014 when the two joined forces to form Volkswagen Financial Services South Africa (VFSSA). The new venture replaced the joint venture between Volkswagen and WesBank, which was largely funded and controlled by WesBank.
In the report, consulting actuary Natasha Huggett-Henchie said the recalculations were investigated and commented as follows:
- “We checked the formulas used in the programme to calculate interest and the monthly capitalisation of interest and confirm that it is correct.
- “Part C of the agreement dated September 23, 2016, under the heading ‘The cost and interest rate’, stated a variable interest rate of prime +1% would apply. The variation of interest rates with the variation of the Reserve Bank’s repo rate in the calculation is correct.
- “The methodology of interest calculated on a daily basis and capitalised at the end of the month/period is correct.
- “We checked the capturing of all the payments made by a client into the recalculation and confirm that that is correct.
- “As the monthly service fees do not form part of the principal debt, they cannot bear any interest and therefore the fees and the payment toward those fees are excluded from the calculation and we confirm that the methodology is correct.
- “On December 10, 2018, the client went into an agreement with Wesbank for a ‘PREMIUM MAINTAINANCE PLAN’ at R721.69 per month. As these premiums do not form part of the principal debt, they cannot bear any interest and therefore the premiums and the payment toward those premiums are excluded from the calculation, and we confirm that methodology is correct.
“We here confirm that the recalculation of the vehicle loan account of Mr Shepherd is correct and that Wesbank is liable to refund Mr Shepherd the amount of R15 297.50.“
Van Zyl has submitted the letter to WesBank CEO Ghana Msibi.
However, when asked if Msibi received the letter and what he thinks of it, WesBank’s head of marketing and communication, Lebogang Gaoaketse, confirmed receipt of the letter but said it was in relation to a vehicle finance account, which was, in fact, not a WesBank account, but rather a VWFS account.
“In terms of Mr van Zyl's email, the alleged overcharge, according to the interest calculation methodology presented by himself and NMG, emanates from interest charged on a value-added product (VAP), which he alleges is not part of the principal debt and should hence not attract interest. Whilst we have referred Mr Van Zyl’s letter to VWFS to respond to, it should be noted generally that there is a difference in how interest is calculated for various types of VAPs.
“Where term VAPs are financed, they form part of the principal debt and will attract interest,” said Gaoaketse.
Gaoaketse said in a formal letter of correspondence to Van Zyl and NMG, WesBank has highlighted this error in their interest calculation methodology.
“We hope that the customer, while not a WesBank client, will afford their financial services provider the opportunity to also review the claim made by Mr Van Zyl and NMG to arrive at a satisfactory conclusion to their inquiry,” Gaoaketse said.
Shepherd said he took his case to Van Zyl after he saw his tweets about how the banks have been discriminating against black customers.
“And I sent him my details and he made his calculations, which were verified by the actuaries (NMG),” he said.