Bank Accused of Approving Loans Without Proper Affordability Assessment
GAUTENG – A Gauteng couple has launched legal action against Absa Bank, accusing the financial institution of reckless lending after they found themselves trapped in over R5.1 million of debt.
The couple claims the bank approved multiple loans and credit facilities without conducting proper affordability assessments, which they argue contravenes the National Credit Act (NCA).
📝 What the Couple Alleges
According to court documents, the couple states that:
- They were already financially strained when the loans were granted
- Absa failed to assess their ability to repay the debt
- Their monthly income was insufficient to support the repayments without sacrificing essential living expenses
They allege this has caused emotional and financial distress, and seek relief through the courts — including the possible restructuring or cancellation of the debt.
⚖️ Legal Ground: The National Credit Act
Under the NCA, credit providers must ensure that a consumer can afford the loan and is not over-indebted at the time of approval. If proven, reckless lending could result in:
- The loan being set aside or reduced
- A debt rearrangement order
- Potential penalties for the lender
🗨️ Expert Insight
Consumer rights advocate Thando Dube commented:
“This could be a landmark case if successful. It shows that consumers are increasingly aware of their rights under the NCA and are willing to hold big banks accountable.”
