A FORMER WesBank employee has detailed how the finance provider used a specific system to overcharge black clients.
He said this has been done purposely, to charge black clients more than their white counterparts.
The employee, who asked not to be named, worked as a consultant in the IT department as a contractor between 2014 and 2018.
He told the Sunday Independent that the bank used the acquisition system to determine the interest rates.
Asked to comment on the allegations, WesBank refuted the allegations of discrimination against customers based on race as alleged.
“All vehicle finance applications are assessed on affordability and the customer’s credit profile in accordance with the National Credit Act. Credit scoring is conducted by independent credit bureaus and are not determined by our offices.
“WesBank operates in a highly regulated environment, answerable to the Prudential Authority and the Banking Association of South Africa. We are regularly audited, both internally and externally, ensuring strict compliance with all legislation and regulations.”
“WesBank is committed to treating all customers fairly while providing the best possible vehicle and asset finance solutions,” WesBank said.
Saying the system had nothing to do with the credit score but the clients’ race, the source said: “While I was there I worked on many projects and some of them are how the applications come through. I also upgraded the online applications for customers. One thing I picked up at that time was enquiring in the acquisition system, which gives all the customers information and it was more like a pre-approval but needs the information provided and collected from the third parties to see what credit they can give you.
“Based on that, they determine how much they are charging clients. This system had nothing to do with the credit score. They determine the interest rate based on certain risk factors, and this is based on the acquisition site,” he said.
He said this resulted in black clients being charged up to 18% compared to whites who were charged 10%.
This came as many black clients accused WesBank of robbing and overcharging their interest rates for vehicles and personal loans.
The employee said he suspects that the system could be back due to several complaints that had been seen against the bank.
Financial investigator Emerald van Zyl said he had received many complaints against WesBank in the past few months. He said after investigating the matter he found that blacks were charged up to 18% compared to whites who were charged below 11%. He said this shows that black clients were robbed.
He also provided examples of contracts.
The first contract shows that a client bought a Suzuki Jimny 1.5 GLX in 2020, and had to pay R6 562 to cover the total cost of R467 566.56. Another client was debited close to R4 000 to cover the cost of R282 978 for a BMW X3 XDrive30D M-Sport A/T, which was bought in 2008. The other client was charged R3 572 per month to cover the cost of R253 080.00 for the 2008 Mazda BT-50 Drifter 3.0 CRDI SLE P/U D/C/.
Van Zyl said WesBank said interest rates on vehicle loans were determined by affordability and credit worthiness.
However, he argued that with affordability the law is clear that an instalment of a vehicle finance loan cannot exceed 30% of the client’s monthly salary. He said with reference to credit worthiness it was a known fact that if “your credit record is not good you will not obtain a vehicle finance loan”.
“So why do some clients pay 18% on their vehicle loan accounts and some pay 11% and it happens to be that the clients that pay 18% are black?” he asked.
He said he was also invited on various radio stations with WesBank to discuss the matter and the bank allegedly refused to take part.