Nerosha Maseti, Lead Ombud for Banking and Credit at the NFO
In the world of consumer credit, the numbers tell a stark story: 62 percent of complaints lodged against credit companies with the National Financial Ombud Scheme SA (NFO) have been upheld in favour of consumers.
Nerosha Maseti, Lead Ombud for Banking and Credit at the NFO said: “This is not a statistical quirk; it signals a troubling pattern. Too often, credit providers prioritise profit over fairness, and in doing so, some sidestep the due legal processes meant to protect borrowers.
“Consumers must also become more alert to the terms of credit and must be equally vigilant when lenders fail to follow the law. Awareness is the first line of defence against exploitation.”
Maseti said a growing number of consumers were turning to the dispute resolution body for help. During the 2025 year, the office registered 3126 complaints, up from 1979 in 2024 – an increase of 58%.
“Over the past year, 62% of complaints were resolved in favour of consumers, meaning that in more than half of cases, we helped individuals obtain the redress they needed. This is particularly significant given that many credit consumers are debt-stressed and may not fully understand the implications of the credit they take on.
“Securing positive outcomes in the majority of cases highlights the Ombud’s important role in protecting consumers and promoting fair treatment across the financial sector,” she said.
According to the 2005 Annual Report of the NFO, the Credit Division recovered R7.47 million for consumers in 2025 – more than triple the R2.36 million recouped in 2024, showing that more consumers were not only heard, but were also placed back in a better financial position through the Ombud’s interventions.
Store cards and retail accounts topped the complaint charts, with disputes ranging from value‑added services and charge reversals to service failures, contested settlements, prescription battles, and fraud.
In the Annual Report, the Credit Division presents several case studies that reveal how easily consumers can be trapped when companies bend or bypass the rules.
Vehicle retained without authority
This case illustrates how quickly matters can spiral when legal processes are ignored.
A financed vehicle suffered mechanical failure and was parked at the dealership. As arrears mounted, the credit provider refused to release the vehicle unless payments were settled. Yet, crucially, there had been no voluntary surrender and no court order authorising retention under the National Credit Act.
The Ombud found the vehicle had been held without legal basis, worsening arrears and leaving the consumer in financial distress. Resolution came only through a full write-off and removal of adverse credit records.
Njabulo Bhembe, Senior Adjudicator – Banking and Credit Division of NFO, said the lesson is clear. “Repossession or retention of financed goods must follow the law, not convenience.”
Disproportionate credit extensions
Another dispute centred on a credit provider’s decision to extend a repayment term by 24 months after arrears. While restructuring debt can help struggling consumers, the Ombud found the extension excessive. The arrears amounted to just three months’ instalments, and the consumer had continued paying.
The dispute was ultimately resolved when the credit provider agreed to close the account and issue a paid-up letter.
While credit providers often restructure debt to assist struggling consumers, the case illustrates that such measures must remain reasonable and proportionate to the circumstances they are intended to address.
Fraud listings without evidence
Fraud-prevention listings carry severe consequences, yet two cases showed how easily they can be misapplied.
In one, a consumer was branded a fraud risk over allegedly altered bank statements. The provider could not produce evidence or confirmation from the bank. The listing was removed.
In another, a consumer was listed on the Southern African Fraud Prevention Service (SAFPS) database after a loan application in her name. Biometric records proved she was elsewhere at the time, undermining the provider’s conclusion.
Based on the available evidence, the NFO concluded that the consumer had neither submitted the application nor supplied fraudulent documentation. The listing was subsequently removed.
Bhembe said: “Both cases highlight the gravity of fraud allegations and the need for rigorous evidence before consumers are flagged.”
Billing after default
This case involved continued billing long after a consumer defaulted and the account was handed over for collections. Charges kept accumulating, inflating the debt unfairly.
The Ombud found no justification for ongoing billing beyond the collections threshold. The account was recalculated, and the consumer accepted responsibility for the revised balance.
Bhembe said: “This case clearly shows how administrative lapses can compound consumer hardship, and why consistent, fair application of collections processes is essential.”
Profit overriding fairness
The Ombud’s findings in the case studies show that credit companies often gamble with consumers’ livelihoods, extending agreements or enforcing measures without proper authority. While individual disputes may be resolved, the systemic issue remains: profit-driven practices too often override fairness and legality.
Maseti said: “For consumers, the message is sobering but empowering: challenge irregularities, demand evidence, and know that the Ombud exists to enforce accountability. For credit providers, the warning is clear: shortcuts and overreach will not stand.”
ENDS
