In order to protect the interests of consumers, the Financial Services Board (FSB) has issued a warning to consumers not to conduct financial services business with ABG Investment Portfolios and its subsidiaries ABG Auto Finance and Auto-Bank (ABG).
While ABG holds itself out to the general public as a provider of vehicle finance, targeting specifically persons with negative credit records, it is in fact also rendering financial services without having the requisite licence to do so or without having been appointed as a representative of an authorised financial services provider. Persons rendering financial services without a licence or without being appointed as a representative are acting in contravention of the Financial Advisory and Intermediary Services Act, No. 37 of 2002 (FAIS Act). Such contravention is an offence which carries, upon conviction, a significant fine or imprisonment.
On 14 October 2010 the FSB was approached by the Department of Trade and Industry (DTI) about consumer complaints relating to ABG. This was followed by a meeting between representatives from the DTI and the office of the Deputy Executive Officer: Pensions, Mr. Jurgen Boyd, where it was concluded that ABG could be in contravention of not only the Pension Funds Act, 24 of 1956 but possibly also the FAIS Act, the National Credit Act, 34 of 2005 (NCA) and the Banks Act, 94 of 1990.
The DTI, in conjunction with the FSB and possibly other regulators, will conduct an investigation into the business conduct of ABG in terms of the Consumer Affairs Act, 71 of 1998, particularly to determine if there are any unfair business practices on the part of ABG. The FSB has also advised that the National Credit Regulator and the South African Reserve Bank be informed of activities being conducted by ABG and its subsidiaries as there may possibly be a contravention of the NCA and the Banks Act. This matter has also been referred to the Deputy Executive Officer: FAIS, Mr. Gerry Anderson, to consider further investigation. Investigations into this matter have yet to be conducted.
The FSB advises consumers who wish to conduct financial services business with an institution or person to check beforehand with the FSB on either the toll-free number (0800 110 443) or on the website (www.fsb.co.za) whether or not such institution or person is authorised to render financial services or whether the institution or person is appointed as a representative of an authorised financial services provider.
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