Beware loan sharks who take your ID

It's illegal but they lend you cash while withholding your identity document and bank cards until you pay back the
loan with interest.

WITH a large number of consumers struggling to make ends meet, many are forcedby their financial circumstances to turn to loan sharks who keep their identity documents, pension and bank cards as security until their debts have been settled. But the National Credit Regulator says it is cracking down on this illegal practice. The NCR's chief operating officer, Obed Tongoane, said the agency had carried out numerous raids but affected consumers do not report these mashonisas (registered money lenders, engaging in a criminal activity) to the authorities. "The practice is rife. However, consumers do not necessarily report such matters. The National Credit Regulator has conducted operations and raids in various towns in the Eastern Cape, KwaZulu-Natal, Western Cape, Limpopo, Mpumalanga, North West and the Northern Cape.

"Where theregulator conducted raids as joint operations with the South African Police Service, such as the one in Marikana, they received extensive media coverage," Tongoane said. He said thousands of bank cards and identity documents had been retrieved in raids that have been carried out throughout the country. "It is a criminal offence in terms of the National Credit Act for credit providers to retain these cards and documents. Most of the accused were subsequently convicted and sentenced accordingly. The identity documents, bank cards and pension cards were returned to their rightful owners," he said. Tongoane urged consumers to report the illegal practice to the police so that necessary action could be taken against the loan sharks involved. "Consumers should report the matter to the nearest police station and lodge a complaint with the NCR," he said.

The Black Sash's national advocacy manager, Elroy Paulus, warned loan sharks who keep documentation from
borrowers that they will face stiff penalties. "My understanding is that loan sharks violate the regulation of 2008 (of the Social Assistance Act) - that if they are closer than 100m from a pay point, they can be arrested. "I serve on a ministerial task team for social development and it was reported that SAPS and Sassa have, as an example, arrested persons engaging in this activity, confiscated cash, ID documents and Sassa cards on the property and pressed criminal charges — these are lenders who are in breach of the law and can be charged criminally," Paulus said. "These loan sharks are illegal because there are no contracts or agreements between them and the people they give loans to. How endemic this is we don't know, but it happens often in those areas that are not policed," Paulus said.

A loan shark from Tembisa on the East Rand, who spoke on condition of anonymity, said he was in possession of the ID books of about 50 clients and he was not willing to give them back to their owners until they had settled their debt. He said he had been in the business for more than 10 years and saw nothing wrong with keeping people's bank cards and IDs until they had paid off their debt. "Nobody is forced to borrow money from me. If people are desperate for money, I want the
assurance they will be able to pay me. "I'm running a business here, not a spaza shop. If they say what I'm doing is illegal, it's my way of making a living. "If I don't keep the documents how will I be sure they will pay me back? "On each and everyone's payday I go to the bank to withdraw the money that I'm owed. Those who want to take out more money do so," he said.

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FACT BOX: The joint NCT-police operations and raids yielded the following:

» 2845 bank cards were retrieved

» 1238 pension cards were retrieved

» 551 identity books were retrieved

» 65 people were arrested and criminal charges were laid with the police

IT'S YOUR LIFE: Don't hand over your personal documents to anyone, especially to loan sharks, however desperate you are for cash.