Know your rights: Key findings from the NFO on credit providers
Some credit companies prioritise profit over fairness, warns the NFO.
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Credit companies often gamble with consumers’ livelihoods, extending agreements or enforcing measures without proper authority. Profit-driven practices often override fairness and legality.
This is according to the National Financial Ombud Scheme SA (NFO), which reported that 62% of complaints lodged against credit companies with the NFO have been upheld in favour of consumers.
Nerosha Maseti, Lead Ombud for Banking and Credit at the NFO, commented that 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,” she said.
Maseti said a growing number of consumers were turning to the dispute resolution body for help. Last year, the office registered 3,126 complaints, up from 1,979 the previous year. Over the past year, 62% of complaints were resolved in favour of consumers. Maseti said 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.
According to the 2025 annual report of the NFO, the credit division recovered R7.47 million for consumers in 2025 - more than triple the R2.36m recouped the previous year. 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.
The Ombud highlighted several cases to outline some of the unfair treatment meted out to consumers. One such case involved a consumer whose financed vehicle was held illegally at a car dealership while unpaid fees piled up. The credit provider refused to release the vehicle unless payments were settled. Yet, 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. Once the Ombud had stepped in, the debt was written off and the consumer’s adverse credit records were removed. Bhembe remarked that repossession or retention of financed goods must follow the law, not convenience.
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 this extension to be excessive. The arrears amounted to just three months’ instalments, and the consumer had continued paying. The dispute was 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, Bhembe said. While fraud-prevention listings carry severe consequences, two cases before the Ombud 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, and 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. 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.
Another 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 collection's 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.
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