Wesbank is at the centre of a heated controversy following accusations of racially discriminatory practices.
Is Wesbank overcharging black clients?
A former employee has come forward, alleging that the bank has been systematically overcharging black clients on vehicle and personal loans.
According to the whistleblower, who worked as a consultant in Wesbank’s IT department from 2014 to 2018, the finance provider used a specific system for this purpose.
The system reportedly determined interest rates based not on credit scores but rather on clients’ race.
“This system had nothing to do with the credit score,” the source claimed, indicating that black clients were charged up to 18% interest, compared to white clients who were charged around 10%.
This revelation comes amid growing complaints from black clients, who accuse Wesbank of overcharging them.
Emerald van Zyl, a financial investigator, echoed these concerns, stating he had received numerous complaints against Wesbank.
After investigating these claims, van Zyl found similar patterns of racial disparity in interest rates, with black clients being charged significantly higher rates than their white counterparts.
Van Zyl provided concrete examples, including contracts showing varied interest rates for different clients.
One such contract detailed a client purchasing a Suzuki Jimny in 2020, who had to pay R6,562 per month, covering a total cost of R467,566.56.
In contrast, another client was debited close to R4,000 per month for a BMW X3 bought in 2008, totalling R282,978.
The former Wesbank employee’s claims, backed by van Zyl’s investigations, point to a potential systemic issue within the bank’s lending practices.
The allegations suggest that black clients are not only being charged higher rates but are also being subjected to covert racism.
ActionSA reels in SA Human Rights Commission
ActionSA, a political party, has taken note of these allegations and plans to write to the South African Human Rights Commission (SAHRC) to investigate these claims.
Lerato Ngobeni, the ActionSA national spokesperson, emphasised the importance of this investigation, stating,
“The SAHRC, via its Legal Services Unit, is empowered by the Equality Act to take the matter to the Equality Court on behalf of the victims.”
This case against Wesbank adds to the growing concern over financial institutions’ treatment of black clients in South Africa.
The investigation into these allegations will not only shed light on Wesbank’s practices but also contribute to the broader dialogue on racial discrimination in the banking sector.
In recent years, there have been several investigations into financial institutions regarding racial discrimination.
These investigations often reveal deep-seated biases and systemic inequalities, challenging the principles of fairness and equality in the banking sector.