The Financial Sector Conduct Authority (FSCA) has imposed a R700 000 penalty on African Bank Limited due to misleading advertising in its #KeFestive social media campaign.
An FSCA investigation found that a December 2023 social media advertisement, featuring a well-known public figure, promoted personal loans with the claim: “It’s not a Skoloto Chomi! Ke Investment.” The statement was deemed misleading, as it falsely portrayed a loan as an investment product.
The FSCA identified violations of Conduct Standard 3 of 2020 (Banks), specifically sections 6(1) and 6(3), which require financial institutions to advertise products in a fair and non-deceptive manner. Additionally, weaknesses in African Bank’s internal governance, particularly its advertising review process, breached section 6(9), which mandates proper oversight by senior executives.
Acknowledging African Bank’s cooperation and remedial actions, the FSCA suspended R200 000 of the penalty for two years, provided the bank remains compliant. The R500 000 has already been paid.
Consumer protection and industry standards
The FSCA warns that misleading financial advertising can lead consumers to select unsuitable products, resulting in unnecessary financial risk. The authority urges all financial institutions to strengthen internal governance and ensure responsible marketing to maintain public trust.
“All financial institutions are urged to take note of this sanction and are reminded about the importance of providing clear and accurate information to financial customers regarding the nature of products and services being offered. For many financial customers, decisions about which financial products to purchase are significantly influenced by information conveyed in advertising and marketing material,” the FSCA said in a statement.
“Financial customers who rely on misleading adverts or false impressions are more likely to select unsuitable products, which could result in financial losses or other prejudicial outcomes. In this matter, by positioning the product as an investment rather than a credit product, financial customers were misled about, among other things, the longer-term risks and potential costs associated with taking up the product.”
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