The EFF says it supports the “long overdue” R60-billion class action lawsuit against South Africa’s major banks, Absa, Standard Bank, FirstRand (FNB) and Nedbank.
In a media statement released on Friday, EFF national spokesperson Leigh-Ann Mathys gave details of the lawsuit. She said it involves more than 200 applicants whose homes were repossessed by major banks. These include Absa, Standard Bank, FirstRand, and Nedbank. The houses were repossessed after owners missed bond repayments.
Mathys said these repossessed homes were auctioned off for a fraction of their true
market value.
Unjustly sold repossessed properties far below market value
She said in 2020, a R60-billion class action lawsuit was filed against the banks in the Johannesburg High Court. The lawsuit was for unjustly selling properties far below market value. Also for failing to treat property sales as a last resort, and disregarding the livelihood.
“The EFF fully endorses the long-overdue R60-billion class action lawsuit against South Africa’s major banks for their predatory and exploitative practices. [These] have left hundreds of poor, primarily black South Africans homeless and destitute.
“This legal action exposes the deep-rooted systemic neglect and exploitation of the vulnerable. A reality the EFF has consistently highlighted in its fight for economic justice.
“This lawsuit involves more than 200 applicants whose homes were repossessed
by major banks. By Absa, Standard Bank, FirstRand, and Nedbank. This after missing bond
repayments. These repossessed homes were auctioned off for a fraction of their true
market value. With some homes sold for as little as 10% of what they were worth.
Leaving their owners homeless and still in debt to the banks. Some properties were even sold for as low as R100,” said Mathys.
Homeowners left destitute and still owing banks
“These practices were common before 2018 when the Gauteng High Court in Pretoria, amended the rules. This required reserve prices for properties sold in auction. But by then, many had already been affected.
“…Most of the applicants are poor and unable to recover their losses. They have been living in destitution for over a decade and now seek damages from the banks.
“This legal battle began in 2017, when the victims sought recourse from the Constitutional Court. However, the court referred the case back to the High Court for further hearings. In 2020, a R60-billion class action lawsuit was filed against the banks in the Gauteng High Court, Johannesburg. This was for unjustly selling properties far below market value, failing to treat property sales as a last resort. Also for disregarding the livelihood of the affected homeowners,” said Mathys.
She said this lawsuit highlights how “black homeowners are disproportionately
targeted”. They are losing their homes and properties when they encounter financial hardships. This while white individuals are given ample time and opportunity to make arrangements without forfeiting their assets.
Mathys said the EFF will continue to use parliament as a tool to push for a judicial investigation. For it to investigate alleged discriminatory practices in the South African banking sector.
Black homeowners disproportionately targeted
“Recent statistics show that out of 6 million home loan applications submitted by historically disadvantaged persons, less than half were approved. …While white applicants continue to receive loans valued exponentially higher.
“As stated in one of our seven cardinal pillars, we need the establishment of a state bank. This in order to break the stranglehold of private financial institutions. Particularly when it comes to home loans.
“A state bank would offer lower interest rates. This will make it easier for historically dispossessed and working-class people to access affordable home loans. They will escape the exploitative grip of commercial banks.
“By prioritising the needs of the people over profit, a state bank would provide fair, accessible credit. And it will ensure that homeownership is not a privilege for the few but a right for all South Africans.
“The EFF remains clear in its commitment to pursue a judicial investigation within parliament. And we will give our political support to this case until every victim receives the justice they rightfully deserve,” said Mathys.
