Bank Repossessions of Homes & Cars & Their Auctions At Way Below Market Value Must Be Probed

By Pinky Khoabane


Nedbank sold Solomon Nhlapho (Left) for R100. These malpractices, Standing Committee On Finance, recommended, should be probed. 

PARLIAMENT’S Standing Committee on finance recently released a  report into the transformation of the financial sector following hearings in August. It confirms much of what has long been known; that some of the activities of this sector are criminal in nature – the staggering amount of money that leaves the country in illicit financial flows; elaborate tax evasion schemes and financial malpractices committed by the banks in the way they repossess houses and cars and sell them at prices way below market value.

The Committee, before going into recess released its first report and recommended an inquiry into the financial sector. Below are excerpts from the first report into the transformation of the financial sector.

“12.16. Illicit Financial Flows (IFFs) 12.16.1 By all accounts, the country loses a staggering amount of money through Illicit Financial Flows (IFFs), and with slow economic growth rates and severe stresses on the budget, the need for more decisive action to combat this has become even more urgent. The two Committees are working with other parliamentary committees on this, but there has been very little progress. The financial sector has to do far more to tackle IFFs. */The Committees understand that the concept of IFFs includes activities which are criminal in nature, including outbound flows of money through outright tax evasion, money laundering and many other legally defined organised crime and corruption offences./* However, there are also aggressive schemes of tax avoidance through base erosion and profit-shifting and other activities which are not defined as criminal. Consideration should be given, over time, to clearly defining in law many of these other activities as criminal. An option could be to incorporate these as ‘Offences Relating to Illicit Financial Flows’ in the Prevention of Organised Crime Act, Act 121 of 1998. The Committees urge the NT and the DTI to engage the DoJ in this regard to consider tightening the legal loopholes, especially in respect of the grey areas. */However, those IFFs that are explicitly covered in our criminal codes such as outbound tax evasion, money laundering, organised crime and corruption should be aggressively prosecuted, including through pursuing South Africans identified in the Panama Papers and Paradise Papers who are suspected of engaging in IFFs. There must also be a concerted effort by the FIC and the Asset Forfeiture Unit to make effective use of the FIC’s intervention mechanisms as provided for in section 34 of the FIC Act to freeze funds. /*

12.6.5. The Committees understand that some of the malpractices are carried out by companies that banks outsource to and the sheriffs, and note that the banks say they are attending to some of these excesses*_. However, we believe that there should be an inquiry into financial malpractices_* relating to the repossession of houses and cars, including their auctioning way below market value, including in one case in Soweto of R100; non-compliance with section 129 and 127 of the NCA, including allegations heard at the hearings about the use of bouncers by some banks to intimidate customers to hand over cars without following the prescribed legal processes; */the alleged involvement of banks and court officials in misleading the courts in cases of liquidations, sequestrations, and repossessions; the alleged manufacturing of fake court orders by lawyers; and the alleged abuse of the Insolvency Act by creditors in instances where debtors are undergoing debt review. This inquiry should lead to policy and regulatory changes. /*”

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  1. Understanding debt is important. When your house or car is repossessed it is because a person would have failed to pay for a couple of months, others reminded and they disregard until the repossession. There is recourse in law if property is sold unlawfully but an auction anything goes. Beware of consequences of failing to pay your accounts monthly. Prioritize and pay the big debts with the highest interest.

  2. The property I had for 1.24m was sold for 800k. After the bank consultant refused 1.6m purchase through my agent. Repossessed

    1. It is terrible what the banks do. They probably went on to sell for well over what you owed them. Banks must be probed. We look forward to that commission of enquiry.

  3. Fnb consultant refused 1.6m a buyer for my house through an agent. I Paid 1.24m or got a bond for it then was sold for 800k

  4. Standard Bank placed my flat on Auction (I was given 1 months notice) They accepted R150 000 (Initial bond R399 000) now they want me to pay the shortfall! If the bank accepted the R150k this surely means they did not loose on the deal! I believe this is called profiteering. Banks really need to be investigated

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