Recent findings reveal that 62% of credit complaints against providers are upheld, raising concerns about fairness in the credit industry. This article explores the implications for consumers and highlights the Ombud's role in ensuring accountability.
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About 62% of complaints lodged against credit providers with the National Financial Ombud Scheme South Africa (NFO) are upheld in favour of consumers, raising serious questions about whether some lenders are prioritising profits over fair treatment and legal compliance.
The figure, revealed in the NFO's latest Annual Report, paints a concerning picture of South Africa's consumer credit landscape. It suggests that in nearly two out of every three disputes brought before the Ombud, consumers have legitimate grounds for complaint and are entitled to redress.
According to Nerosha Maseti, lead ombud for banking and credit at the NFO, the statistics point to a deeper problem within parts of the credit industry.
“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,” she says.
The number of consumers turning to the Ombud for assistance is also rising sharply. During 2025, the NFO registers 3,126 credit-related complaints, up from 1,979 in 2024, an increase of 58%.
Maseti says the Ombud's role is becoming increasingly important as financially stressed consumers navigate a complex credit environment.
“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 says.
The financial impact of these interventions is significant. According to the NFO's Annual Report, the Credit Division recovers R7.47 million for consumers in 2025, more than triple the R2.36 million recovered in 2024.
Store cards and retail credit accounts generate the highest number of complaints. Disputes range from unauthorised value-added services and billing errors to fraud, contested settlements, prescription disputes and poor customer service.
The Ombud's case studies reveal a recurring pattern: consumers often suffer financial harm when credit providers fail to follow the law or apply their own processes fairly.
One case highlights how quickly matters can escalate when legal procedures are ignored.
A financed vehicle suffers mechanical failure and is parked at a dealership. As arrears accumulate, the credit provider refuses to release the vehicle unless outstanding payments are settled. However, no voluntary surrender and no court order is authorising the retention of the vehicle as required by the National Credit Act.
The Ombud finds that the vehicle is being held without legal authority, contributing to further arrears and worsening the consumer's financial position. The matter is ultimately resolved through a full write-off and the removal of adverse credit records.
Njabulo Bhembe, Senior Adjudicator in the Banking and Credit Division of the NFO, says:
“Repossession or retention of financed goods must follow the law, not convenience.”
Another dispute centres on a credit provider extending a consumer's repayment period by 24 months after arrears develop.
Although debt restructuring can assist struggling consumers, the Ombud finds the extension excessive because the arrears amount to only three missed instalments and the consumer continues making payments.
The dispute is resolved when the credit provider agrees to close the account and issue a paid-up letter.
The case demonstrates that debt-relief measures must remain proportionate and reasonable to the circumstances they are intended to address.
Two separate complaints expose weaknesses in the way some lenders handle fraud allegations.
In one case, a consumer is labelled a fraud risk after allegedly submitting altered bank statements. However, the credit provider is unable to produce evidence or obtain confirmation from the bank. The fraud listing is subsequently removed.
In another case, a consumer is listed on the Southern African Fraud Prevention Service (SAFPS) database after a loan application is submitted in her name. Biometric records later show she is elsewhere at the time the application is made.
Based on the available evidence, the NFO concludes that the consumer neither submits the application nor provides fraudulent documentation. The listing is removed.
“Both cases highlight the gravity of fraud allegations and the need for rigorous evidence before consumers are flagged,” says Bhembe.
Another complaint involves a consumer who continues to be billed after defaulting and after the account is handed over for collections.
Additional charges continue accumulating, inflating the debt unnecessarily.
The Ombud finds no justification for ongoing billing beyond the collections threshold and orders the account to be recalculated. The consumer accepts responsibility for the revised balance.
“This case clearly shows how administrative lapses can compound consumer hardship, and why consistent, fair application of collections processes is essential,” says Bhembe.
Taken together, the cases suggest that some credit providers continue to test the boundaries of fairness and compliance. Whether through unlawful asset retention, excessive repayment extensions, unsupported fraud allegations or improper billing practices, consumers often bear the consequences when due process is overlooked.
While many disputes are ultimately resolved through the Ombud, the fact that 62% of complaints are upheld in favour of consumers suggests broader issues within parts of the credit industry.
For consumers, the message is clear: understand your rights, scrutinise your credit agreements and challenge decisions that appear unfair.
As Maseti says, “For consumers, the message is sobering but empowering: challenge irregularities, demand evidence, and know that the Ombud exists to enforce fairness.”
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