- Consumers were promised lower interest rates but were allegedly enrolled into debt review without informed consent.
- The tribunal found a recurring pattern of unlawful fees, fake debt review removals and misuse of multiple trading names.
- Bongolethu Gedeza was struck off, fined R1 million and ordered to refund affected consumers following an independent audit.
Consumers struggling with debt were promised lower interest rates and financial relief. Instead, many discovered they had been placed under debt review without ever knowingly agreeing to the process.
The National Consumer Tribunal has cancelled the registration of debt counsellor Bongolethu Gedeza after finding that he repeatedly contravened the National Credit Act through a widespread pattern of unlawful debt review practices.
The judgment, delivered by Dr MC Peenze with Professor K Moodaliyar and Dr A Potwana concurring, also imposed a R1 million administrative fine and ordered a comprehensive audit of every consumer file.
How consumers were trapped
The tribunal found that Gedeza targeted financially distressed consumers through unsolicited telephone calls, offering to reduce their monthly debt repayments by securing lower interest rates.
Consumers were allegedly told the assistance was linked to government and were left with the impression that the National Credit Regulator had authorised or supported the process. Rather than explaining debt review, its legal consequences and its impact on their credit records, the tribunal found that consumers were quietly enrolled into the system.
Once loaded onto the NCR’s Debt Help System, consumers were automatically flagged with credit bureaus as being under debt review, restricting their ability to obtain further credit and affecting existing credit facilities. The tribunal concluded that many of these consumers had never completed the prescribed Form 16 application or given informed consent.
Hundreds of complaints exposed the scheme
The National Credit Regulator received 216 complaints against Gedeza during 12 months, with around 200 complaints alleging that consumers had been placed under debt review without their express consent.
Investigators selected 20 representative consumer files to test the allegations. The tribunal found that the sample revealed the same recurring method. Consumers were persuaded to accept debt assistance, enrolled on debt review without informed consent and then charged unlawful fees throughout the process.
The matter proceeded on a default basis after Gedeza failed to oppose the application or file an answering affidavit.
Multiple businesses, one operation
The tribunal found that Gedeza operated under several trading names, including CDS Consulting, PDS Consulting and Debt Counselling Removals South Africa.
It further found that he used an entity called DC Partner to collect and distribute consumer funds, even though it was not a registered Payment Distribution Agency. Consumers also made direct payments into accounts controlled by his businesses in circumstances that breached the regulatory framework governing debt counselling.
Consumers were charged to get out
The tribunal found that the unlawful conduct did not end with enrolment into debt review. Consumers were charged cancellation fees, restructuring fees and legal fees that exceeded the National Credit Regulator’s prescribed fee guidelines.
In several cases, legal fees were collected even though debt review applications had already been rejected and no court proceedings had been instituted. Even more troubling, the tribunal found that Debt Counselling Removals South Africa offered debt review removal services and charged upfront fees of between R5,000 and R8,000.
Some consumers paid for removal services despite already being subject to court debt review orders, making the promised service legally impossible to perform.
Registration cancelled and refunds ordered
The tribunal declared Gedeza’s conduct prohibited, cancelled his registration with immediate effect and barred him from practising as a debt counsellor.
It ordered him to appoint an independent chartered accountant to audit every consumer file, verify whether valid debt review applications existed, identify unlawful debt review listings and examine payments received into two bank accounts linked to the operation.
Consumers who were listed without signed applications must have their debt review flags removed, while those who paid unlawful fees or paid for services that were never legally rendered must be refunded.
Maximum penalty
In imposing the R1 million administrative fine, the tribunal said Gedeza’s conduct was serious, prolonged and targeted financially vulnerable consumers. It noted that similar compliance failures had already been identified during a regulatory intervention in 2023, yet the unlawful practices continued.
The tribunal said the penalty was intended to send a clear message that debt counsellors who exploit vulnerable consumers and abuse the debt review system will not be tolerated.
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