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Section 129 delivery battle at the SCA

During the day today  the Supreme Court of Appeal is going to hear argument on whether a court should be allowed to grant a default judgment against a consumer to enforce a credit agreement (like as a home loan) where it knows that their Section 129 notice did not reach the consumer because it was not collected from the post office.

The good old bad old days

In the past creditors used to get these judgments all the time and consumers often did not even know that legal action was taking place. An important recent ruling by the constitutional court said that credit providers have to not only send a notice/ warning in terms of Section 129 (encouraging the consumer to go for debt counselling or settle up their debt) but that the consumer must actually read the notice and be aware of the danger of not taking action.

Added costs for credit providers

It seems that credit providers are not happy with this arrangement as consumers may not be collecting their mail and the creditor may then have to send a sheriff of the court to serve the 129 letter (like they do with a summons – which normally follows 10 days later).

Why it matters

If the credit providers win it can be business as before and they can hope to get lots of summary judgements and sell off homes and cars much easier but if consumers win it will mean the banks have to spend more funds and time to ensure consumers are warned of pending legal action and should seek help.