Consultant stands by claims about Wesbank’s interest rates for blacks

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Independent Financial Investigating Consultant Emerald Van Zyl says he stands by his claims that there’s evidence that Wesbank charges its black clients more interest for vehicle financing compared to their white counterparts.

That’s despite Wesbank previously denying that race plays a role when determining interest charged for vehicle loans.

Van Zyl says he was approached by a whistleblower who used to be a manager at Wesbank, who shared information with him about the discriminatory lending practices.

He says he reached out on social media and asked people to forward him their contracts with Wesbank. He says both black and white clients of the bank sent him their contracts and an analysis show black clients are charged more interest than white clients.

Van Zyl says black people are charged as much as 19% interest rate, while the average for whites is 11.25 %. He says he received 160 contracts from black people, and 53 from white people. He says from that it was clear that blacks are charged more, putting them at risk defaults and having their assets repossessed.

“The whistleblower that phoned me about two weeks ago, he used to be an employee of the bank. He provided me with the necessary documentation, proof that he worked for Wesbank and he said they use acquisition system and when it’s sent to the last department for approval, they must put the colour of the client on the docket, that is clear. There are two whistle blowers, there is apparently a third one that came out now, the first whistleblower informed me that the blacks are paying much more, the second whistleblower worked in the IT department and he said that they are discriminating by race,” Van Zyl explains.

Wesbank denies these allegations, calling them factually incorrect and unsubstantiated.

The lender says factors that are looked in to are the credit risk of the client, the asset risk and the expected loss that the bank could stand to suffer if the deal were to go bad.

“There is three broad categories; one is credit risk, so credit risk effectively would look at your individual standing, your individual income statement, which means your income, your expenses, how you conduct yourself that will be validated by the credit bureau, so you would effectively have a risk-based approach to that, that’s got to do with how you conduct your own affair. The second broad category is what we would look at as asset risk management, what we would call loss given a default, in essence we look at the type of car you buy, is it new or is it used, what type of structure have you got, what is the term that you’ve got, do you put a deposit or don’t you put a deposit, do you have a balloon, how big is the balloon,” says Wesbank CEO Ghana Msibi.

The bank says it does not incorporate race, age or gender in pricing variables.