- The Full Court has granted banks leave to appeal after a ruling that debt review does not reset interest and charges under Section 103(5) of the National Credit Act.
- The judges accepted that the case raises issues of national importance, affecting both consumers and credit providers across South Africa.
- The Supreme Court of Appeal will now decide whether debt review legally cures default and reopens the door to accumulating interest.
A High Court judgment with the power to reshape how South Africans experience debt has now been sent to the Supreme Court of Appeal.
In Scott v National Credit Regulator and Others, the High Court in Pretoria granted the Banking Association of South Africa and major banks permission to appeal a ruling that directly affects how interest, fees and charges are calculated when consumers enter debt review.
The order opens the door for a national legal reckoning on a critical question. Does applying for debt review clean the slate on a credit agreement and allow interest to start mounting again, or does the law permanently cap charges once a consumer is in default? That question has life-changing consequences for households already under pressure, and for credit providers managing billions in loans.
What the original ruling said
In May 2025, Chantelle Scott won a major victory when the Full Court ruled in her favour, declaring that an application for debt review does not purge or cure default under Section 103(5) of the National Credit Act.
Section 103(5) is a consumer protection provision that caps the total amount a consumer can be charged once they are in default. It is meant to stop debts from ballooning endlessly through interest and fees.
Scott argued that once a default has occurred and the cap is triggered, entering debt review does not undo that default. In other words, debt review does not reopen the gate for lenders to start stacking interest again. The court agreed.
For consumers, it meant hope of lower balances and faster financial recovery. For banks, it meant potential losses and system-wide changes to how debt is calculated.
Banks push back
The Banking Association of South Africa, supported by Standard Bank, FirstRand, Nedbank, Absa and Capitec, challenged the ruling and applied for leave to appeal to the Supreme Court of Appeal. Their argument was blunt; the judgment carries national consequences and threatens how the entire credit system operates.
They warned that credit providers would have to redesign internal systems and software to comply with the ruling, and argued that the matter was not just legal but structural to the banking industry. Crucially, the Banking Association insisted that the Full Court’s interpretation of Section 103 of the National Credit Act was wrong.
How the court decided
Handing down judgment, Acting Judge NGM Mazibuko, with Judge N Mali and Judge N Janse van Nieuwenhuizen concurring, agreed that the stakes were too high to ignore, and that another court might reasonably reach a different legal conclusion.
Judge Mazibuko acknowledged the broader impact, stating that the dispute carried real weight beyond the immediate parties. “I am persuaded that the issues raised by both parties are of public interest, and have significant implications for participants in the credit industry,” the judge said.
He went further, admitting directly that the Supreme Court of Appeal might disagree with his own reasoning. “There are reasonable prospects of the Supreme Court of Appeal reaching a legal conclusion dissenting from mine,” said the judge.
The court also relied on established authority on appeals, reminding litigants that leave is no longer granted lightly. Quoting the Supreme Court of Appeal in MEC for Health, Eastern Cape v Mkhitha, the court reiterated, “A mere possibility of success, an arguable case or one that is not hopeless is not enough.”
And in terms of Section 17 of the Superior Courts Act, the court noted that there must be a measure of certainty that another court would differ. “The use of the word ‘would’… indicates a measure of certainty that another court will differ from the court whose judgment is sought to be appealed against.”
On that basis, the Full Court concluded that the Banking Association had met the threshold.
What happens now
The Supreme Court of Appeal will now determine the fate of the interpretation of Section 103(5), and by extension, how debt review works in practice for hundreds of thousands of South Africans.
If the appeal succeeds, credit providers may regain the right to claim additional interest once consumers enter debt review. If it fails, Scott’s victory could cement a powerful consumer shield, limiting creditor charges permanently after default.
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