Financial distress: Couple accuses Absa of reckless lending after accepting R3.2 million second home loan

A Gauteng couple took action against Absa bank after alleging reckless lending practices that have led them into a spiralling debt of over R5.1 million.

Christian Daniel De Klerk and his partner, long-standing customers of the bank, claim that their financial wellness was compromised when they accepted a second home loan from Absa without being given a suitable affordability assessment.

Initially, the De Klerks secured a R1.9 million home loan from Absa in 2011 and, for nearly a decade, they successfully met their repayment obligations. However, following the collapse of the husband's legal practice in March 2020 due to the pandemic, the couple were granted a temporary three-month payment holiday.

Ironically, during the same month, they said Absa approached them with an offer for a second loan, amounting to R3.2 million. Despite their precarious situation, the couple accepted the offer.

Meanwhile, the husband remained unemployed until June 2024 and the couple faced mounting debt because of missed repayments from 2022.

They maintained that their current income was inadequate to service both the new instalments and the arrears. Nevertheless, they submitted that they could meet the loan obligations under terms similar to those agreed upon in March 2020.

In seeking respite, the couple brought their case before the National Consumer Tribunal (NCT), voicing their primary grievance against Absa's alleged failure to conduct a proper affordability assessment before approving the second loan.

They argued that Absa did not request essential financial documentation such as proof of income, detailed expense records, or even a credit history report—critical assessments that would typically inform responsible lending practices. The couple contended that granting them a loan while the husband was unemployed amounted to reckless lending.

In addition, the couple alleged that Absa also failed to provide clear information regarding the loan’s terms, conditions, interest rates, and penalties for missed repayments, all of which they argue have contributed to their current financial hardship. 

As a result of these alleged contraventions, the couple said that they are suffering severe financial hardship, face the risk of foreclosure, and are enduring significant emotional distress, which has adversely affected their quality of life.

In the answering affidavit, Absa argued the couple's application was time-barred as more than three years have elapsed since the alleged cause of action arose. Moreover, the bank submitted that the North Gauteng High Court in Pretoria enforced the loan agreement in September 2024 and ordered the couple to pay over R5.1 million including interests and declared the couples’ property executable.

The bank added that the couple's case was frivolous, vexatious, and constitutes an abuse of the Tribunal’s process. 

In their reply, the couple disputed the assertion that the matter was time-barred. They argue that the cause of action only arose in 2022 when they began defaulting on their home loan repayments. On this basis, they contend that the three-year period should be calculated from 2022, not from 2020 when the second home loan was granted.

They also disputed the contention that the high court judgment precludes them from pursuing the complaint before the tribunal. They argue that the issue of reckless lending, which forms the crux of their complaint before the tribunal, and it was not adjudicated by the high court.

Looking at matter, the tribunal said by law, the limitation period must be calculated from 2020 March when the alleged reckless credit was extended. Having filed their application for leave to refer in February 2025—almost five years post the alleged reckless lending—the tribunal indicated that they would be barred from considering the complaint, potentially closing the door on their search for justice.

As a result, the application was dismissed.

sinenhlanhla.masilela@iol.co.za

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