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Fake Loan Brokers Face Class Action At Court

Thousands of consumers have for years been taken in by a network of websites offering to source them loans…for a monthly fee.

Desperate consumers who mistakenly signed up for what they thought was a loan soon found out that they had actually just signed up for “legal services” and allowed these companies/websites linked to Lifestyle Direct Group International to debit their accounts monthly.

‘The loans they so desperately needed never materialised’

The loans they so desperately needed never materialised as, in most cases, the consumers simply do not qualify for more debt. Instead Lifestyle Direct Services International would milk their accounts for what they could before setting their collections people loose on these already troubled consumers.

Truly, a nasty, dark web of greed and preying on the financially less educated which has operated since back in 2015.

Stellenbosch University Law Clinic

With so many consumers being taken for around R400 (initial fee) and then R99/month for up to 12 months in debit orders it is hard for any one consumer to take the matter to court. It will cost them much more than that just to have the matter set down.

‘the Stellenbosch University Law Clinic has gotten involved and has asked the High Court for permission to bring a class action suit’

Fortunately, the Stellenbosch University Law Clinic has gotten involved and has asked the High Court for permission to bring a class action suit against the two owners of Lifestyle Direct Group International.

A Class Action

The Courts have agreed that the case can be an ‘opt-out’ class action, where if consumers who were scammed do not want to be part they must specifically say so otherwise they will be included.

The idea behind the class action is to also avoid thousands of cases at the small claims court level.


Already the owners are in a lot of trouble as the so-called service they offer consumers (not actually giving loans) was supposedly legal services. That’s a problem if they were not actually registered with any legal entity or body. So, they were probably just calling their fees ‘legal services’ but they were not.

So, not only were people not getting the loans that they thought they were getting, but they were also not getting the services actually promised in the fine print of the agreements these consumers got locked into either. 

This will be fully explored during the case but already it is not looking good for the owners Damian Malander and Nandie Piach.

The Law Clinic also asked for an interdict to stop the company from trying to take more people’s money with false promises. The owners say the business is no longer operating (though there was some debate about that even during the High Court hearing).

Be Honest In Your Advertising

This is just another case where it becomes clear that it is best to be honest and clear in your advertising. Offering consumers one product and then doing a bait and switch to another is risky and morally unfair business.

It also just highlights how if you say you are going to offer a legal service then you better follow through and actually be registered with one of the law societies (or have the funds go directly to the Attorneys who will perform these services and not into your own accounts).

This also once again highlights the danger of using terms like “legal fee” or “legal services” without further clarification. Even if a regulator says go ahead and use terms like this in a guideline you may want to rethink such use or offer more explanation when you do so.

Debt Counsellors are urged to review their advertising and fee guidelines as well as contracts they have with consumers (don’t just rely on vague form 16 application forms).