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The Loan Company vs NCR & NCT

Quite a while back the National Credit Regulator (NCR) took The Loan Company to the National Credit Tribunal (NCT) because they said they were breaking the law.

The NCR had said that The Loan Company was a pawn broker but was advertising loans before being registered as a credit provider with the NCR and was changing interest etc illegally at the time.

The NCT agreed and ruled against the Loan Company and issued a R250 000 fine and ordered people to be repaid etc.

Appealing The Ruling

The Loan Company then appealed the case to High Court but the High Court agreed.

The Loan Company then appealed to the Supreme Court of Appeal*.

Recently, after hearing the matter, the Supreme Court of Appeal once more ruled in favour of the NCR (and agreed with the NCT) against The Loan Company saying that they had in fact broken the law and ultimately have to change their business practices.

The ruling has implications for any unregistered credit provider and all pawn brokers.

Selling Pawned Items For Profit

If a person pawns an item, it is held until they can repay the amount secured.

If they cannot do so, then commonly, the pawn broker will sell the item held to recover their money.

However, it is also not uncommon that the item is sold for more than was borrowed or loaned from the pawn broker.

So, who gets the profit?

In the past, the pawn broker always got to keep the profits.

In some cases, the pawned item was worth a lot more than the amount loaned. So, it seemed very unfair and this case dealt with this situation.

The ruling given states that any surplus from the sale of an item actually belongs to the client and not to the pawn broker. Since there is an agreement in place about the amount borrowed it sets a limit to how much the pawn broker can keep and how much must be given to the consumer.


Example: You borrowed money and now owe R15,000, but they sold your family heirloom for R17 000. In such a case, the extra R2000 “profit” must be returned to you, not kept by the pawn broker.

Also covered in the ruling is the fact that any people (or business) that act as a credit provider without registering with the NCR are breaking the law and any loans made are illegal. In such a case the loan does not have to be repaid and in fact, if people have made repayments, all the money they have paid should be returned to them.

You Don’t Have To Repay Illegal Loans

This is not a new understanding of the NCA but it is a reminder to loan sharks and companies (or private individuals) lending money and charging interest or fees.

If consumers are brave enough to report the illegal loan, then the debt could be written off and fines handed out.

‘If consumers are brave enough to report the illegal loan, then the debt could be written off and fines handed out’

The Loan Company argued that at the time of the original matter they had already applied to be registered as a credit provider but the NCR had not registered them yet. They applied in June 2016 but were only finally registered in March 2017. Interestingly, the investigation by the NCR started in Feb 2017 and they found that The Loan Company had already been offering what amounted to credit agreements under the NCA. Oops.

Although most people are too scared to refuse to repay a loan shark or unregistered credit provider because of possible violent reprisals for doing so, those who are operating as illegal credit providers run the risk of never getting their money back and could certainly never recover their money through the courts or police.

*The Loan Company (PTY) Ltd v The National Credit Regulator and Another (1104/2023)[2025] ZASCA40 (8 April 2025)