July 22, 2009

Stay on your toes when buying wheels, advises the office of the Ombudsman for Banking Services.

The office could not help a woman who complained that a bank was demanding R37 000 outstanding on an Audi she had traded in to help her buy a new one, but which the bank had auctioned.

She told banking ombudsman Clive Pillay that her 2006 Audi was financed by a bank when she decided to trade it in on a 2009 model. A condition of the trade-in was that the dealer would settle the outstanding balance on the 2006 Audi with the bank.

The dealer had agreed and the same bank had financed the new car, of which she took possession in January, but a few weeks later she found the bank had paid the debit order for her old car. 

She had tried to query this with the dealer, only to discover that it had gone into liquidation. She had also discovered that the dealer had not settled the outstanding balance on her old car and that the liquidators had handed it over to the bank.

The bank had then auctioned it before demanding from her the shortfall of R37 000. She complained to the ombudsman's office about being saddled with an instalment for her new car as well as a liability to the bank for the old one.

The ombudsman found that the dealer had reneged on the agreement with her about settlement of the outstanding balance but the bank had not been aware of her agreement with the dealer.