‘Consumer champion’ Clark Gardiner fined for breaching NCA

‘Consumer champion’ Clark Gardner fined for breaching NCA

The National Consumer Tribunal (NCT) has fined Clark Gardner, the chief executive of Summit Financial Partners, R500 000 after finding him guilty of contravening the National Credit Act (NCA).

Gardner has something of a reputation as a consumer champion, having taken on companies such as Capitec and Lewis on behalf of indebted consumers.

Summit was one of the parties that brought the case before the Western Cape High Court in which the court ruled that collection costs included all legal fees incurred through the employment of attorneys and advocates, as well as the execution of the judgment. As we reported, the Supreme Court of Appeal recently overturned the judgment.

Legal action by Summit, Wendy Appelbaum and the Stellenbosch Law Clinic resulted in the Constitutional Court handing down a landmark judgment regarding emolument attachment (“garnishee”) orders in 2016. Sections of the Magistrate’s Court Act were rewritten so that a garnishee order can only be issued by a magistrate in the district where the consumer lives or works.

The NCT found Gardner guilty of contravening the NCA and his conditions of registration as a debt counsellor. This follows an investigation by the National Credit Regulator (NCR) into complaints against Gardner.

The tribunal found that Gardner had contravened section 52(5)(c) of the NCA and breached his conditions of registration in the following respects:

  • He “acted unprofessionally and unreasonably” by, in a financial wellness marketing brochure, stating that his debt counselling services were free, whereas they were not.
  • He “acted unprofessionally and unreasonably” by failing to attest to affidavits in support of debt review court applications and instructed an employee to sign the affidavits on his behalf. This prevented him from acting in the consumers’ best interests.
  • He failed to fully inform a consumer of the consequences of applying for debt counselling and the consequences of a debt re-arrangement order.
  • He failed to update consumer records relating to debt review.
  • He received payments from consumers who applied for debt review “at the commencement of the debt counselling process”.

The NCT found that Gardner contravened section 86(4) of the NCA, read with regulation 24(2), by failing to notify, within the prescribed period, credit providers and credit bureaus that consumers had applied for debt review.

He contravened section 86(6)(a), read with regulation 24(6), and section 52(5)(c) by failing to determine, in the prescribed manner and time, whether consumers appeared to be over-indebted.

In addition to the fine, the tribunal ordered Gardner to appoint an independent auditor to audit his consumer files dating back three years in order to identify, among other things, consumers who were overcharged by him.

The auditors’ report must be given to the NCR once completed, and Gardner must refund consumers identified by the auditors as having been overcharged.

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