Capitec and Summit Kiss and Make Up
Over the last while, Summit Financial Partners (Summit) and Capitec Bank have been at each other’s throats over accusations of reckless lending. Things got ugly as the National Credit Regulator and the Courts got drawn into the furore.
‘Summit has brought five different cases as well as a complaint to the National Credit Regulator (NCR) against the bank’
Over the last two years, Summit has brought five different cases as well as a complaint to the National Credit Regulator (NCR) against the bank. Most of the dispute relates to a multi-loan product which Capitec used to offer but pulled the plug on in February 2016 (when they began to offer credit cards).
After years of fighting the two parties have now reached an accord and the matters have been settled out of court (they paid people money to stop the legal action). Capitec says that the court costs were just going to mount and they would rather deal swiftly with the matters than drag things out. There was, obviously, also the risk of the court cases – if the rulings went against Capitec – triggering a wave of legal action from other consumers who made use of the same product in the past. Summit say they are happy not only for the affected consumers but also since Capitec stopped offering the product several years ago now.
The two firms have agreed to also work together in the future in a new partnership to promote, among other things, workplace financial education.
Not Everyone Loves Capitec …Yet
Capitec and another firm called Viceroy are still in conflict over claims that the firm has made over Capitec’s lending practices and book. Capitec has received strong support from local institutions (like the Reserve Bank) who are all adamant that Viceroy’s claims are unfounded and perhaps simply financially motivated.