South Africans with debt are being ripped off

The National Financial Ombud Scheme (NFO) has exposed a growing trend of abuse of power amongst South African credit providers.

This comes with the release of the NFO’s 2025 annual report, detailing the scheme’s performance in resolving complaints across multiple financial categories during that year.

One of the most alarming revelations showcased in the report concerns the number of credit-related complaints which the NFO received in 2025, with 3,126 total registered cases in this division.

This represents an increase in credit-related complaints of over 50% when compared to the year prior, when the NFO registered just 1,979 cases in total.

Even more concerning is that the NFO ruled in favour of the complainant in 62% of cases received during 2025, compared to the previous year’s 49%.

This is unusually high, as the overall report showed that only 19% of the total cases across all of the NFO’s divisions in 2025 were resolved in favour of the complainant.

The NFO’s Lead Ombud for Banking and Credit, Nerosha Maseti, said this showed a growing systemic trend, where profit-driven practices are increasingly prioritised by credit providers.

“This is not a statistical quirk,” Maseti said. “It signals a troubling pattern. Too often, credit providers prioritise profit over fairness.”

“In doing so, some sidestep the due legal processes meant to protect borrowers. Consumers must become more alert to the terms of credit and must be equally vigilant when lenders fail to follow the law.”

Store cards and retail accounts were the most common category of credit-related complaints, with RCS topping the chart as the lender with the most complaints against it.

The financial services group, which offers retail credit at numerous stores across South Africa, such as Game and Makro, received 491 complaints in 2025.

Of these, the NFO ruled in favour of the complainant in 74% of cases, and managed to close 309 of its 338 formal cases against the company during that year.

Lenders abuse their power over South Africans

The report showcases numerous examples of how South African credit providers have used their leverage to extort more out of borrowers, often outside the bounds of the law.

In one instance, a complainant’s financed vehicle was retained by the credit provider, which refused to release it until the arrears were settled.

When the NFO investigated, it found that the vehicle had not been voluntarily surrendered and that there was no court order authorising the retention under the National Credit Act.

As such, the retention of the vehicle was deemed unlawful, and the vehicle was released following a full write-off of the outstanding balance and a removal of adverse credit records.

In another case, a credit provider decided to extend a complainant’s repayment term by 24 months, claiming this was due to a default on repayments.

The NFO found the extension excessive, as the arrears had been limited to just three months, following which the complainant had continued to pay.

The matter was resolved with the credit provider agreeing to close the account and issuing a paid-up letter to the complainant.

Other cases mentioned in the report detail issues of unsubstantiated fraud accusations against a complainant, as well as continued monthly billing following non-payment.

With regard to cases such as these, Maseti stressed the importance of turning to dispute resolution bodies, such as the NFO, to obtain the help needed.

The NFO’s Credit Division reportedly recovered R7.47 million for complainants in 2025, more than triple the R2.36 million it had recouped in 2024.

“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,” Maseti said.

“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.”