A R1 million fine handed down by the National Consumer Tribunal last month has exposed how 216 South Africans were placed under debt review without their knowledge or consent.
Thousands of South Africans could be trapped under debt review without their knowledge, or see opportunistic fraudsters target their valid payment plans, National Debt Advisors (NDA) warns.
The warning follows two major legal developments: the National Consumer Tribunal striking off a Cape Town debt counsellor for fraudulently enrolling 216 people, and a Western Cape High Court ruling protecting payment arrangements on over 44,000 accounts.
Sebastien Alexanderson, Head of NDA, warns that industry disruption creates a perfect storm for scammers.
“Debt review relies on certainty. You must know exactly who you are paying and why,” says Alexanderson. “When that certainty is shaken, whether by a rogue operator or a corporate portfolio transfer, scammers step into the gap.”
Scam callers often possess basic account details to trick victims. They demand OTPs, urge consumers to halt legitimate payments, or claim an upfront fee is needed to update or clear their profile. “Legitimate processes never work through high pressure, unexpected phone calls,” Alexanderson emphasises.
216 Victims and a R1 Million Fine
The National Consumer Tribunal recently issued a severe sanction against debt counsellor Bongolethu Gedeza, fining her R1 million and stripping her registration.
Gedeza placed 216 consumers under debt review without consent while falsely claiming to act for the National Credit Regulator (NCR). Court filings show her practice levied R3.06 million in unauthorised legal fees in a single month.
“Consent is non-negotiable,” says Alexanderson. “If you never signed a Form 16, a legal process was started in your name unlawfully. Check your credit report today, even if you are sure you never applied.”
Court Protects 44,000 Accounts
In a separate matter, the Western Cape High Court ordered debt collector MBD Legal Collections to immediately safeguard payment plans across 44,216 debt review accounts bought from RCS Cards, prohibiting MBD from rerouting payments while legal appeals play out.
While the dispute is purely commercial and not linked to fraud, Alexanderson stresses that public confusion creates easy targets. “Consumers did nothing wrong, and their money is safe, but conflicting noise makes people vulnerable to scam callers trying to divert their payments.”
The R10,000 Removal Trap
“Anyone promising to wipe away a debt review flag for a fee is selling a lie,” Alexanderson warns. “The only legitimate way out is completing your restructured payments and earning an official clearance certificate.”
NDA is warning consumers against fraudulent debt review removal offers increasingly appearing on social media. South African law does not provide a quick fix to erase a debt review status, yet consumers may be misled into paying substantial upfront fees, sometimes advertised or quoted between R5,500 and R10,000, for services that may never be delivered. Consumers should be wary of anyone promising guaranteed or immediate debt review removal and should always verify the service provider’s legitimacy before paying.
Four Red-Flag Scams to Watch For
- Consent Fraud: You are registered under debt review without signing a Form 16.
- Payment Redirection: Callers demand you stop paying your official administrator and transfer funds to a new account.
- Fake Clearance Services: Advertisements charging upfront fees to magically delete an ITC or debt review record.
- Upfront Loan Fees: Fake loan offers aimed at over-indebted consumers demanding admin payments in advance.
5-Minute Safety Checklist
- Check your credit report: Claim your free annual credit report to spot unauthorised flags.
- Protect your codes: Never share OTPs, PINs, or passwords with anyone who calls you.
- Verify credentials: Confirm any counsellor or collector on the official NCR registry before acting.
- Keep paying as normal: Maintain existing payments through your verified administrator until officially notified in writing.
- Report suspicious activity: Contact the NCR at 0860 627 627 or complaints@ncr.org.za.
About National Debt Advisors
National Debt Advisors is a South African debt counselling firm that has helped over 100 000 clients since 2014 restructure their debt and work towards financial recovery. NDA works with consumers struggling with unmanageable debt to negotiate reduced payments with creditors and provide a single, manageable repayment plan under the National Credit Act.
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Author: Omega Ngema from Financial Wealth Holdings on behalf of National Debt Advisors.
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