Damian Malander, founder of Lifestyle Direct Group, which is accused of massive consumer fraud, is apparently back in business, former associates have warned.
Maverick company was alerted to a new entity created by Malander and managed by a partner / employee, which operates from the same Cape Town premises as the former Lifestyle Direct group: The Forum, Northbank Lane, Century City.
The Rapid Group is registered with the National Credit Regulator and claims to be registered with the Payments Association of South Africa (Pasa) and various other regulatory bodies.
The group claims to be one of the leading providers of integrated financial services supporting Naedo debit orders, EFT online payments, DebiCheck, Mastercard and Visa, among others. Its “partners” are Rapid Legal (another debt collection activity), Rapid Pay Collect and digiDebit (for the collection of payment and debit orders).
Malander was seen driving a Rapid brand vehicle in Cape Town and is the “mastermind” behind the new entities, former associates have confirmed.
It follows the same operating mode as the Lifestyle Direct Group, from whom he distanced himself by deleting his name in 2015 and then registering it under the name of his second in command at the time, Nandie Paich.
He demanded that his associates / employees sign a power of attorney, giving him full control of the business. He also asked his associates to take out bank loans, which they would cede to him. Malander kept the cards and PIN codes.
A former partner, who declined to be named, explained that Malander would appoint a second in command to serve as a director of his companies.
“Once that happens, the 2IC would be required to register the business in their name and open a corporate bank account in their name. When everything is up and running, all information is transmitted to Damian, including passwords and login information. Then he has full control and access to all online banking information and operations.
Take the fall
Paich thus became the “face” of Lifestyle Legal and is now a co-respondent in the class action lawsuit against Malander and Lifestyle Direct.
But Malander has always been at the origin of this network of companies presenting themselves as “loan providers”, controlled by Lifestyle Direct. Thanks to the bogus “loan” program, he raked in millions of rand, which was spent on cruise ship vacations and parties in Seychelles, Thailand and Mauritius; as well as on assets such as limousines, boats, jet skis, high end sound equipment and luxury properties in the Pezula golf course in Knysna and Cape Town. His various business interests included an events company that hosted international artists; a branded clothing company; Crowns Energy Drink; Limousine and Lifestyle Boating services in Mauritius and Knysna.
Many of those assets, including his extravagant home in Sonstraal, Durbanville, and a warehouse full of Mercedes Benz limousines and vans, trailers, DJ mixers, rigging gear, professional coffee machines, TVs Big-screen Samsung, gas braais, refrigerators, gym equipment and a dog bed were rushed off in 2019, when the spotlight turned to Malander.
The Durbanville home was auctioned in 2019, with a reserve price of just 100,000 Rand. Malander reportedly sold it for well over R8million before the auction, but the funds were paid to the bank to offset his debt. Malander disembarked the house as soon as the class action lawsuit was filed with the High Court.
Some of its Rapid brand vehicles were also seized by its creditors.
Pezula’s villa is still on the market.
Smoke and mirrors
Lifestyle Direct Group and Malander are believed to have fooled thousands of desperate consumers into signing contracts for legal and other “value-added” services, instead of providing actual loans. They are accused of using “dark pattern” marketing methods, which in essence trick victims into buying or subscribing to something they had no intention of doing, such as premium subscriptions and expensive insurance.
Lifestyle has tricked its victims into advertising loans – “welcome blacklisted” and “no credit checks”, both of which are illegal under national credit law. The victims, desperate for money, rushed into these “contracts” for unwanted services, without reading the terms and conditions.
The agreements were established for a fixed period of 12 months, comprising an initial subscription ranging from R399 to R429 and a monthly subscription of R99 for the remaining term of the agreement.
In his affidavit filed in court, Malander alleged that thousands of clients had benefited from the services of these websites, but when the Stellenbosch University Legal Clinic, which initiated the class action, forced him to return records of these services available at the office of his lawyer (Henno Bothma of Abrahams & Gross), he was unable to produce any evidence to support his allegations.
This is the first successfully certified consumer law class action in South African law history, in which the court issued a certification judgment (and the subsequent application for leave to appeal was been rejected). It is also the first successful class action certification brought by a South African university legal clinic.
The websites all prominently featured the word “ready” as part of their domain names – Loantrackersa.co.za, loanchoice.co.za, Loanquest.co.za, etc.
The certification hearing was held on March 8 and 9, 2021. At the start of the proceedings, the representative of Lifestyle Legal, lawyer Pieter-Schalk Bothma, argued that a ban against the group was moot because its clients no longer operated the various competing websites.
A rapid reinvention
Most websites have indeed been taken down, but the Lifestyle Direct group’s collections are believed to continue through Fast legal services. Loan Tracker is believed to be still operational, on the Loans Find website the clinic is investigating.
Pasa, who is charged under the National Payment System Act with monitoring, among other things, abuse of the debit order system by commercial users in the banking sector, was admitted as amicus curiae in that case.
He accused those interviewed of being crooks and never being registered credit providers because they did not provide loans.
But Pasa doesn’t know anything about Rapid’s declared accreditation. Pasa spokesperson Patricia Naidoo said: “The association recognizes two different forms of debit order abuse: [often seen as R99 and R199 unauthorised debits] and, on the other hand, the abuse by payers of direct debit orders that reverse [dispute] valid debit order collections. Pasa and our members have successfully introduced processes for dealing with dishonest collectors, which are managed in conjunction with our member banks. “
She said Pasa’s role is only to facilitate these industrial processes, with member banks being responsible for executing these processes. The decision to remove a party from the national payment system is not up to Pasa and therefore they cannot declare that they have removed any of the above entities from the system.
However, Pasa does not “register” debit order collectors, “although we do monitor the conduct in the system, in conjunction with our member banks”.
“Pasa and our members consider these processes to be very efficient as our estimates suggest ‘bad’ debit orders worth R 9.92 billion. [between 1 April 2019 to end October 2021] have already been prevented.
Rapid’s website prides itself on having “an exceptional track record of ensuring that communications and vital systems are always in place.” Our 24/7 support service ensures that our customers and our bespoke systems are always supported, day and night. ”
Maverick company contacted Rapid looking for Malander. At first they said he was not “today” then the Rapid Legal call center agent said Malander had consulted for them in the past to help with “marketing”.
Her attorney, Henno Bothma, said: “My instructions are not to comment on any matters relating to my clients, pending the finalization of the class action. ” DM / BM