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FNB  recently got themselves into trouble in the Durban High Court while trying to get judgement in regard to a bond account of consumers under debt review. KZN High Court Judge Fikile Mokgohloa even described FNB as “reckless” in failing to participate in good faith in the debt review process involving the home owners Nagine and Kursheda Raheman.

The couple had been under debt review since January 2010 and had been making restructured debt repayments according to proposals sent since February to FNB by the debt counsellor. The proposed repayment amount had even been increased in a second set of proposals in March 2010. In May 2010 the proposal was set before the Durban Magistrates Court. During all this time the bank did not object to the proposals made nor did they make any suggestions, and the Rahemans continued to make payments via the debt review process.

However at the High Court FNB claimed in their papers that it was entitled to try auction off the consumer house, as it had terminated the debt review in accordance with National Credit Act, and that notice of this had been sent to the Rahemans in April 2010. FNB had then sent the consumers a summons and made application at the High Court. This practice seems to be becoming increasingly common as many banks are sending these 86(10) notices to consumers even though they are paying funds each month and trying to settle their debts in a responsible way. Defending matters at High Court can be very costly and many consumers are hesitant to go and defend their rights. Not so with the Rahemans. They were determined not to let the bank simply take their house and made sure they had their say in defense of their actions and explained how they had been responsibly paying toward the debt via debt review.

Judge Mokgohloa found that the bank had failed to participate meaningfully in the debt review and said:” The legislation obliges the consumer and credit provider to participate in good faith in the review, and any negotiations should result in responsible debt rearrangement…The bank failed to respond to the proposals… I am of the view that the plaintiff’s failure to participate in the review proceedings is reckless.”

Judge Mokgohloa dismissed with the application from FNB with costs. Which means that FNB had to pay for the whole court process. Judgements like this are becoming common as the courts are defending consumers rights to make payments via debt review.