Page 38 - Litigating Land and Housing in South Africa: Lessons and Reflections

4 1 3 Working with clients
The Brusson Scam affected people people of of different ages races and backgrounds However all – – with one one exception – – of of of the the the the the the the the people people who approached the the the the the the the the LRC for help had had one one thing in in in in common: they they they didn’t know they they they had had sold their homes This was the the the the the the the the genius of of of of the the the the the the the the Brusson Scheme People signed documents documents genuinely believing they they they were loan documents documents The headings “Deed of of of Transfer” and “Power of of of attorney” did nothing more than raise one or or or two peoples’ suspicions Any misgivings a a a a a a a a a a a a a a homeowner may have had were quickly explained away by Brusson’s staff While Brusson Finance no no longer exists it is is is not the only scam of this nature What should one look out for?
5 The fifth red flag is any any changes on on the municipal account Many Brusson clients
reported first being alerted to a a a a a a a a problem when someone else’s name appeared on on their water bill Some people thought this was was simply a a a a a a a a a a a a municipal error others saw it it for what it it was was – a a a a a a a a change of ownership 6 The sixth red red red flag is is is is if a a a a a a a company is is is is not registered with the the National Credit Regulator This means that they they they are not being monitored or or or or reporting
the the the the way they they they should be be if they they they were a a a a a legitimate lender Approximately 100 clients
consulted the the LRC after it became public that the the the the Brusson loans were were a a a a a a a a scam Many of of the the the the clients
were were referred to to the the the the LRC offices by attorneys in private practice because they could not afford legal fees Others were referred by the the the the National Credit Regulator after they lodged complaints The current number of of clients
total 70 at at at different phases of of litigation The balance was placed on on on on hold pending the the the outcome of the the the the Constitutional Court judgment in in in in the the the the Moore Moore case case The principles established in in in the the the the the Moore Moore case case had to to to be applied to to to all the the the the the other matters Some of the the the the the the investors also consulted the the the the the the LRC with complaints that they too were victims of of the the the the the Brusson scheme The potential conflict of of of interest required the the the the the LRC not to to to assist the the the investors investors Notwithstanding this this some of of the the the investors investors sympathised with with LRC LRC clients
clients
and and settled by transferring the properties back to to LRC LRC clients
clients
Once Brusson was liquidated and the the the investors realised that they had also been part of of a a a a a a a a a a a a scam many of of the the the the the investors began forcing the the the the Brusson victims to to either
1 2 3 4 The first red flag is is is is a a a a a a a a a company company that is is is is advertising loans to to people who are blacklisted blacklisted A company company that is is is is is is is advertising to to blacklisted blacklisted clients
is is is is is is is likely doing something wrong Blacklisting is is is is is is is is when someone is is is is considered too high risk for a a a a bank to to to loan money to The second red flag is a a a a a a a company that that asks for proof proof of of of home ownership – – especially if that that proof proof is is a a a a a a a a title deed – – as as was Brusson’s modus operandi Unless someone is is is applying for for a a a a a a a home loan there is is no need need for for proof of of ownership Brusson told people they needed the the the title deed to to prove ownership of a a a a a home which was a a a a a qualifying criterion for the loan The third red flag is a a a a a company that pressurizes people who who ask questions to to to sign People who who approached Brusson were often told “to hurry
up and sign” or or they they would not get their loans Rushing people people or or making them feel like they they have to to to to act fast was a a a a a a a a a a good way to to to to ensure people people had no time to to to to ask too many questions Related to to the the the third is the the the fourth red flag: if if a a a a a a a company makes it it difficult to to read the the the contract
or explains it it in in a a a a a a a a a a way that does not make make sense Sometimes the the Brusson employee would page through the the the the documents in in in such a a a a a a way that people couldn’t see the the the the the headings lifting only the the the the the pages that had to be be initialled or signed other times the the the the the headings would be be obscured by the the the employee’s hand 38
LITIGATING LAND AND AND AND HOUSING IN IN IN SOUTH AFRICA  LESSONS AND AND AND REFLECTIONS