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Fast credit: Shocking? Or everyday business?
'Wonga offers £400 loan to 13-year-old boy which would take 98 years to pay back'
Food for thought: A headline in the British newspaper Metro on 23/11/2013
A contentious thing:
The newly arrived e-tolling system, which has been imposed upon the Gauteng freeways has been challenged on many grounds. Some say that it violates the right to free movement. Others questioned to what extent the government is permitted to privatise public resources. There certainly is the public international law ideal that the state holds resources in trust for the population: that it is say as a trustee rather than an owner. As a trustee the state therefore must act in the best interests of the population and not in the best interests only of a small minority of special interests. This concept is why tender fraud is such a big issue. None of these arguments are one which I am going to be making today.
A system of credit and debt:
The argument I am here today to make also is not based on reckless credit in accordance with the statutes of South Africa. However, the purpose for the statutes illuminates a constitutional right, and what is more a human right. There is a long history of persons becoming indebted beyond their means to escape their debts. This was in fact one of the means by which slaves were gained by large landholders in certain areas of the world. A person was made to become so legally indebted to another that they are forced to work for the remainder of their life always in debt to the other individual and always forced to work for that individual. In contract law classes, South African law students study a case where a doctor agreed that a vast majority of his salary would go to paying off a debt. The court found that the contract was against public policy and therefore unenforceable as it turned the doctor into essentially what the court called a slave. The e-tolling system has according to SANRAL: been seemingly exempted from the National Credit Act provisions which prevent the issuing of reckless credit.
In order to issue credit, a credit provider must ensure that the person to whom they issue credit, is capable of paying back the credit in their circumstances. The National Credit Act also allows for debt counselling for debtors who cannot possibly afford to pay back their debt. SANRAL seems insistent that this does not apply to e-tolling.
E-tolling is essentially a system of credit. Whenever an individual rides on an e-tolled road, that individual is essentially taking out a loan from SANRAL. It is like swiping a credit card. However, if a person is unable to pay off their credit card the credit card is cancelled. A person who takes out credit from SANRAL can essentially take out unlimited credit whether or not they are able to pay off their debt. A person who earns 1000 Rands a month: could accrue a debt of 10 million Rand. This person would not be afforded debt counselling according to SANRAL. This person would simply have to pay off their debt. It is expensive to file for insolvency, and some return needs to be shown for creditors. Stating that insolvency is a way out of such a debt, also is not stating an absolute solution in such a case. Could such an applicant for insolvency show even one cent to the Rand return for creditors? Would it even be possible for them to file for insolvency? Furthermore, causing a person to become insolvent deeply changes their status, their ability to do business, and their means and resources on which to live.
Micro-lending and Marikana Tragedy:
An aspect of Marikana and the tragic shooting which took place there which is not often brought up is that of micro-lending. Many of the miners who went on strike had taken out small loans. Their salaries were garnished, in order to allow the creditors to reclaim their money. The miners thus could not afford to live and support their families. The unrest was almost inevitable as a result of credit having been granted when it ought not to have been. The absolute desperation of the miners who charged the police at Marikana: should surely hint at the predicament of the indebted miners. Their determination to strike in desperation to bring something home to live on and to support their families: surely shows the effects upon the economy of such strange granting of credit where it ought not to have been granted.
Who are the Debtors?:
Many South Africans are illiterate. Many South Africans do not have basic mathematical education or literacy. Many South Africans are deeply poor. Many South Africans barely get by. These sort of things need to be taken into account by ordinary businesses doing business. Extending a person an unlimited line of credit and expecting them to pay it back without any chance of doing so: no doubt strikes one as immoral. Immorality is not enough. It has to be legally reprehensible. Thus one has to ask in accordance with the Bill of Rights: is the extension of unlimited credit with no cut-off points and no contingencies unconstitutional. I would say that it could well violate the right not to be enslaved. I would say that it could well violate the right to life in as much as it affects a person’s ability to earn a livelihood. I would say that such unfettered granting of unlimited credit could well violate the right to dignity of the human person.
Perhaps I am wrong. However I do believe there is a strong argument that the granting of unlimited and unfettered credit to persons regardless of their creditworthiness or their circumstances and ability to pay back that credit: violates the rights of the debtors.
Nothing in this article constitutes legal advice. This argument is provided for entertainment purposes purely, and in order to strike up debate. For proper legal advice please contact the legal practitioner with understanding of your specific circumstances for proper legal advice.
E-tolls violate the right not to be subjected to slavery - opinion! https://t.co/sXBige3MUw via @Audioboo
— Marc Evan Aupiais (@SACNSNew) January 19, 2014
Article written by Marc Evan Aupiais, a LLB Law Graudate, for the SACNS News Service and Aupiais Wire.