Rudco has a week to pay up
| Rudco Finance Company - famous for its elusive 6% home
loan offering - has until the end of the month to return instalments to
Two months ago Rudco was found by the National Credit Regulator (NCR) to be in contravention of numerous sections of the National Credit Act (NCA) and also its predecessor, the Usury Act.
One of the main problems with Rudco's scheme was that it was accepting instalments for loans that had not yet been granted.
The NCR issued Rudco with a compliance notice ordering it to return illegal instalments and also to operate its business in a manner that complies with the Act.
Rudco has told the NCR that it will comply with the notice and return money to clients. This must be done by October 31. On top of this, Rudco must provide the regulator with an independent audit report verifying that it has fully complied with the notice and made the required payments to clients. This audit report must be filed by the middle of November.
The NCR's Jan Augustyn tells Moneyweb that he has applied to the National Consumer Tribunal to make Rudco's compliance an order of that organisation.
This would mean that if Rudco fails to comply it will be guilty of a criminal offence.
As it is, Augustyn has already forwarded his file on Rudco's alleged contraventions of credit legislation to the Scorpions for possible criminal prosecution.
"All the indications are that Rudco will comply," says Augustyn. However, he concedes that he has not seen evidence that Rudco does indeed have the necessary cash to refund all its clients.
Augustyn says he will be in a position to shed much more light on the Rudco matter by Friday next week.
In the meantime, Rudco's agents have been active in advertising the company's home loan product, which offers prospective clients the opportunity to switch their current home loans to ones with a fixed interest rate of 6%, for a period of up to 20 years.
It is worth noting that Moneyweb has yet to speak with a single client who has successfully switched his or her home loan to Rudco. We invite successful applicants to contact us.
Even the CEO of one of Rudco's agents, Gerald Labuschagne of Total Investment Solutions, admitted to Moneyweb that he still has his current home loan with one of South Africa's big four banks. Despite having not yet received a Rudco loan of his own, Labuschagne has been marketing the product to potential clients and is even franchising his business nationally.
Rudco CEO Rudi Visagie has repeatedly evaded Moneyweb's questions regarding the source of its alleged funds. Until proof of this money is forthcoming, we once again urge potential Rudco clients to proceed with caution.
Article by: Julius Cobbett - www.moneyweb.co.za