- A consumer’s debt was cancelled after a credit provider unlawfully kept their financed vehicle.
- Other consumers also managed to overturn fraud listings and challenge harsh debt restructuring.
- These cases come as the Ombud reports that 62 percent of complaints against credit providers were resolved in favour of consumers.
A consumer whose financed vehicle was held without legal authority had their entire debt written off after the National Financial Ombud Scheme South Africa found that the credit provider acted outside the National Credit Act.
This case is one of several highlighted by the Ombud to show a pattern of unfair treatment and procedural mistakes by some credit providers.
According to the Ombud, the consumer’s car broke down and was left at a dealership. As unpaid fees built up, the credit provider refused to release the vehicle unless all outstanding payments were made.
The Ombud found there was no voluntary surrender of the vehicle and no court order letting the credit provider keep it. This meant the vehicle was being held without any legal basis.
The Ombud concluded that keeping the vehicle unlawfully made the consumer’s financial situation worse, as more arrears built up while the vehicle was out of reach. In the end, the debt was fully written off, and any negative credit records were removed.
Njabulo Bhembe, Senior Adjudicator in the NFO’s Banking and Credit Division, said repossession or keeping financed goods must follow the law, not convenience.
Fraud allegations overturned
The Ombud also pointed to cases where consumers were listed as fraud risks without real evidence.
In one case, a consumer was accused of sending in altered bank statements. The credit provider could not provide evidence or get confirmation from the bank, so the fraud listing was removed.
In another case, a woman found herself listed on the Southern African Fraud Prevention Service database after a loan application was submitted in her name. Biometric records proved she was somewhere else when the application was made.
The Ombud found she had not submitted the application or given any fraudulent documents, so the listing was removed.
Both cases show how serious it is to accuse someone of fraud and why real evidence is needed before flagging a consumer, said Bhembe.
Excessive debt measures challenged
Another dispute involved a credit provider extending a repayment term by two years after a consumer fell into arrears.
The Ombud found this extension was excessive because the arrears were only three months’ worth of instalments and the consumer had kept paying.
The matter was resolved when the credit provider agreed to close the account and give the consumer a paid-up letter. The Ombud said this shows debt restructuring must stay reasonable and fit the situation.
In another complaint, a consumer kept getting billed even after defaulting on an account that had already been handed over to collections. These extra charges made the debt bigger.
The Ombud found there was no reason for the continued billing and ordered the account to be recalculated. The consumer accepted responsibility for the new corrected balance.
“This case shows how administrative mistakes can make things harder for consumers and why fair, consistent collections are so important,” said Bhembe.
Complaints against credit providers rise sharply
The case studies were published as the NFO reported a sharp increase in complaints against credit providers. In 2025, the Ombud registered 3,126 complaints, up from 1,979 the year before, which is a 58 percent jump.
Nerosha Maseti, Lead Ombud for Banking and Credit at the NFO, said the figures show a worrying trend. “This is not just a statistical blip. It shows a troubling pattern. Too often, credit providers put profits before fairness and sometimes skip the legal steps meant to protect borrowers,” said Maseti.
Maseti said consumers should become more aware of their rights and what lenders are required to do. “Consumers must pay close attention to credit terms and be just as alert when lenders do not play by the rules. Awareness is the best defence against being taken advantage of,” said Maseti.
The Ombud said 62 percent of complaints against credit providers were resolved in favour of consumers in 2025. The Credit Division also recovered R7.47 million for consumers, which is more than triple the R2.36 million recovered in 2024.
“Over the past year, 62 percent of complaints were resolved in favour of consumers, so in more than half of the cases, the Ombud helped people get the help they needed,” said Maseti. “Getting positive results in most cases shows just how important the Ombud is in protecting consumers and promoting fair treatment in the financial sector.”
Store cards and retail accounts generated the most complaints, including issues with value-added services, charge reversals, service failures, contested settlements, disputes about prescriptions, and fraud.
Maseti said these cases carry important lessons for both consumers and the credit industry.
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