The complainant made a payment towards his credit card account in order to settle and close the account. The payment did not make provision for the fees, interest and the payment protection insurance for the month in which the payment was made, and as a debit balance remained on the account, the bank could not close the account. Thereafter, the complainant failed to make the required payments on the account and the bank continued debiting fees, charges and interest to the account. According to the provisions of the National Credit Act, the fees, charges and interest charged once an account falls into default may not exceed the outstanding balance on the account at the time the account fell into arrears. Accordingly, the outstanding balance on the credit card account should have been capped at double the amount that was outstanding in the month that the complainant made the payment to settle the account. However, the bank continued debiting fees, charges and interest to the account over and above this amount. The complainant also made several further payments to the account.

This office recommended that the bank refund the complainant all the amounts paid over and above the amount at which the outstanding balance should have been capped in terms of the National Credit Act, write off the outstanding balance on the account and close the credit card account. The bank agreed to our recommendation and the credit card account was closed.

PRINCIPLE: Credit providers have a duty to ensure that they comply with the NCA.

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