All posts by : Kyle

4 May 2026

South Africa carries a grim badge of dishonour: the highest annual road death toll on the African continent. At the centre of this crisis is speeding, a reckless reflex that steals reaction time, magnifies the carnage of crashes, and leaves drivers paying long after the wreckage is cleared.

Edite Teixeira-Mckinon, Lead Ombud of the Non-life Insurance Division at the National Financial Ombud Scheme South Africa (NFO) warns that every collision drives repair costs higher, with insurers inevitably passing the burden on through rising premiums.

“Worse still, when speeding is found to be the cause of an accident, insurers often invoke the ‘due care’ exclusion to reject claims outright. This clause requires policyholders to act reasonably to prevent losses and damage. Yet this exclusion clause is not always correctly applied,” she said.

When speed meets exclusion

In one recent case, a driver said he swerved to avoid a pothole, lost control on a bend, and mounted the pavement. The claim was rejected on the grounds of the following policy exclusion: “You have a duty to take reasonable care to prevent or reduce loss, damage, bodily injury, liability and accidents as if you did not have insurance.”

An accident reconstruction expert found no pothole but calculated that the vehicle accelerated from 61km/h to 71km/h while executing the bend, which was above the critical speed of the curve. The insurer argued this proved recklessness.

Teixeira-Mckinon’s office disagreed and pointed out that the policy covered negligent driving. To prove recklessness, the insurer had to show the driver deliberately or intentionally caused the accident, in other words, that the driver foresaw the possibility of losing control of the vehicle whilst executing the bend at 71km/h and that he recklessly reconciled himself with this possibility.

Speed alone, she argued, does not equate to recklessness. Eleven kilometres above the speed limit amounted to negligence, not recklessness. The insurer was advised to settle the claim and did.

The 20km/h rule

Some policies, however, go further, excluding cover when a driver exceeds the speed limit by more than 20km/h. Unlike the broad “due care” clause that is more common in short-term insurance policies, this exclusion must be specifically highlighted to policyholders before inception.

A driver travelling at 114km/h in a 60km/h zone saw his claim rejected. The insurer cited the “more than 20km/h” policy exclusion to reject the claim. The insurer relied on the data retrieved from the vehicle’s tracking device. The complainant denied driving 20km/h over the speed limit and disputed the reliability of the tracking data; however, no evidence was provided to dispute the tracking data.

The complainant could not recall how the accident took place and he speculated that he lost control of the vehicle when he swerved to avoid an object on the road. It was pointed out to the complainant that to rely on this rejection reason, the insurer needed to only demonstrate what the speed limit on the road was and that the complainant exceeded the speed limit by more than 20km/h.

Considering the speed limit on the road and the speed at which the complainant had travelled prior to the accident, the Non-life Insurance Division was satisfied that the insurer had discharged its onus in respect of the rejection reason.

Contact details for the NFO:

Telephone: 0860-800-900

WhatsApp: +27 (0) 76 574 8055

Email: [email protected]

Ends

13 April 2026

What begins as a harmless “side hustle” can end with frozen accounts, fraud listings, and a ruined financial future.

The Banking Division of the The National Financial Ombud Scheme South Africa (NFO) is warning consumers of a sharp rise in complaints linked to the misuse of personal bank accounts, a trend that is fast becoming one of the most dangerous risks in the financial sector.

Nerosha Maseti, Lead Ombud for the NFO’s Banking and Credit Division, said a surge in cases has been observed where ordinary customers are drawn into scams or informal financial arrangements.

These schemes often involve allowing third parties to use personal accounts to receive and transfer funds, with the promise of small financial incentives. The consequences, however, are devastating.

She said in 2025, the NFO finalised 8,325 cases, with 8% involving account closures or restrictions due to suspected fraud, an increase of 300 cases compared to 2024. The majority (73%) were account freezes, followed by 16% being fraud listing by the Southern African Fraud Prevention Services (SAFPS), while unilateral closures and other categories made up the remainder.

A Case in Point
A recent complaint submitted to the NFO regarding the freezing of a customer’s account, illustrates the peril. A consumer, introduced by a friend to a supposed cryptocurrency trader, was persuaded to open multiple accounts to receive payments from the trader’s customers. She dutifully transferred the funds as instructed.

The bank flagged the activity as suspicious. Unable to provide a legitimate explanation, her accounts were frozen. The NFO’s investigation revealed the accounts bore the hallmarks of “mule accounts” which are used, knowingly or unknowingly, to receive, move, or conceal funds linked to fraudulent or unlawful activity.

Banks are legally obliged to freeze accounts where fraud is suspected, and crucially, account holders remain responsible for all transactions conducted through their accounts, regardless of third-party involvement.

Fraudulent Credit Applications on the Rise
Beyond account misuse, another troubling trend has emerged: fraudulent documentation in credit applications. Consumers have been caught submitting altered payslips or proof of address to manipulate banks into granting loans.

In one case, a customer was listed by SAFPS after submitting fraudulent payslips for vehicle finance. The NFO’s investigation revealed that the “salary” payments reflected on his bank statements were not from an employer at all, but transfers between his own accounts, a deliberate attempt to fabricate income.

Maseti said banks were legally and contractually entitled to terminate customer relationships, with most banking terms and conditions containing clauses to this effect.
“Termination must follow the correct procedure, be based on fair reasons, and, where appropriate, customers must be given sufficiently detailed explanations.”

Majority of Cases Favor Banks
Recent NFO data reveals that 77% of complaints were resolved in favour of banks, compared to 23% in favour of customers.

This demonstrates that banks are generally able to provide evidence of compliance with required procedures and adequate reasoning for termination decisions.

“Banks may also act immediately, freezing or closing accounts without prior notice, particularly where fraud or unlawful activity is suspected.

“These measures align with obligations under financial crime legislation and the Conduct Standard for Banks issued by the Financial Sector Conduct Authority.

“Consumers may be listed with the SAFPS for up to 10 years, restricting access to financial services and even employment opportunities.

“Banks must also report suspicious activity to the Financial Intelligence Centre, which may lead to SAPS prosecution for serious charges such as money laundering,” Maseti said.

Vulnerability Indicators

• Income: Complaints disproportionately affect lower-income consumers, with most cases arising from individuals earning below R80 000 annually.
• Geography: Complaints are most concentrated in Gauteng, followed by KwaZulu-Natal and the Western Cape.
• Gender: Male consumers account for 61% of complaints, compared to 39% from female complainants.

Consumer Advisory

The NFO strongly cautions consumers:

• Never allow third parties to use their bank accounts.
• Avoid “easy money” or investment schemes requiring personal account use.
• Ensure all account activity aligns with the account’s intended purpose.
• Provide honest, accurate, and up-to-date information when applying for credit.

“Failure to follow these precautions may result in account freezes, closures, fraud listings, and long-term financial exclusion.

“While these punitive measures may appear severe, they are essential to combat financial crime and protect the integrity of South Africa’s financial system,” Maseti added.

Contact details for the NFO:

Telephone: 0860-800-900

WhatsApp: +27 (0) 76 574 8055

Email: [email protected]

Ends

11 March 2026

The National Financial Ombud Scheme South Africa (NFO) is issuing a clear warning: don’t wait until debt has you cornered and your credit has spiralled out of control. The reality is simple: you can act early, and you should.

“Consumers have the right to cancel a sale before debts pile up, cutting off financial disaster before it begins. Acting now can protect you from the crushing consequences of repossession or foreclosure,” says Nerosha Maseti, Lead Ombud at the Banking and Credit Division of the NFO.

In 2025, the NFO’s Banking and Credit Divisions collectively handled 10 180 formal complaints across all financial products. Of these, 1 384 complaints related specifically to secured lending products such as vehicle finance and mortgage bonds, Maseti said.

“Disputes involving the repossession of vehicles and the foreclosure on houses are not merely financial disagreements; they are instances where the creditors legal rights intersect with the consumer’s human dignity, stability and in some instances, survival.

“When a consumer’s vehicle or house is at stake, the consequences reach far beyond money. They strike at the very core of one’s livelihood and family security.

“Consumers should not wait until legal processes start before seeking help. There are structured legal options that can reduce costs and limit long term financial damage. Acting early almost always leads to better outcomes than waiting for repossession,” she said.

This March, as South Africa observes World Consumer Rights Month, the NFO urges consumers to familiarise themselves with the lawful options available to them in instances where they find themselves in dire financial difficulty. Consumer rights are rooted in our constitution and enforced through specific consumer protection laws.

There are structured legal mechanisms that allow consumers to exit or manage credit agreements responsibly, including voluntary termination under section 127 of the National Credit Act 34 of 2005, Sell Assist or Help U Sell programmes for mortgage holders, and private sale options where these are appropriate and properly
structured.

Voluntary Termination Under Section 127: What It Is and Why It Matters:

Section 127 allows a consumer to terminate certain credit agreements at any time by giving written notice and returning the goods. This right exists even if the consumers not yet in default.

This option generally applies to instalment sale agreements such as vehicles, furniture and appliances, secured loans, and lease agreements where the credit provider retains ownership of the goods. Section 127 does not apply to mortgage loans, unsecured loans, credit cards or overdraft facilities.

Once the goods are returned, the credit provider must have them valuated and communicate the estimated value to the consumer. The goods must then be sold at auction. If a shortfall remains, the consumer remains liable for that amount. If there is a surplus, it must be refunded to the consumer.

A properly exercised voluntary termination can help a consumer avoid court proceedings and legal costs, repossession fees, additional interest and enforcement charges, as well as the risk of a forced auction that may realise a lower price.

Maseti cautions that voluntary termination must be genuinely voluntary. Consumers cannot be forced, pressured or misled into surrendering their goods. Any intimidation, coercion or misrepresentation is a violation of consumer rights and should be reported.

Private Sale: A Valuable Alternative, If Done Correctly:

A private sale occurs when a consumer finds their own buyer for an asset, such as a vehicle or house, and uses the proceeds to settle the outstanding credit balance, with the credit provider’s written consent. The agreed settlement amount must be paid, and any liens or bonds must be cleared prior to transfer.

For vehicles and other movable assets under instalment sale agreements, a private sale may achieve a higher price than an auction, thus reducing the extent of any shortfall. However, the consumer must secure a willing buyer, interest continues to accrue until settlement, and the credit provider must formally approve the settlement amount.

For mortgage properties, a private sale often offers a better chance of achieving a market related value compared to a forced sale in execution. It allows the homeowner to remain involved in the process and may create space to negotiate structured payment arrangements for any shortfall.

Private sales can be beneficial, but only if the credit provider’s security interests are properly addressed. If not, the validity of the transaction may be placed in question.

Sell Assist or Help U Sell Programmes: Designed for Homeowners:

Although section 127 does not apply to mortgage agreements, many financial institutions offer structured solutions such as Sell Assist or Help U Sell programmes. These programmes are often preferable to a forced sale in execution.

Typically, they include a professional valuation, broad marketing through established property platforms, support until transfer is registered, and structured repayment options where a shortfall arises.

Why Acting Early Is Important:

Once a matter escalates to a section 129 notice, summons or repossession proceedings, a consumer’s options narrow considerably and costs increase rapidly.

Consumers should also understand that repossession requires a court order and may only be carried out by a sheriff of the court. Debt collectors may not force entry or compel the surrender of goods. Consumers are entitled to refuse unlawful actions and to report misconduct to the credit provider and, if necessary, to the NFO.

Tips for World Consumer Rights Month 2026:

During Consumer Rights Month, Maseti encourages consumers to:

• Request settlement figures in writing at the earliest sign of financial difficulty.
• Ask specifically about section 127 voluntary termination, private sale and Sell Assist options.
• Never sign documents under pressure or without understanding the consequences.
• Compare voluntary surrender options with debt restructuring and debt review.
• Keep written records of all interactions and agreements.
• Report intimidation, misrepresentation or forced surrender attempts.

Contact details for the NFO:

Telephone: 0860-800-900

WhatsApp: +27 (0) 76 574 8055

Email: [email protected]

23 February 2026

Insurance is meant to be your safety net, but for some policyholders that net unravels when it matters most.

The Non-life Insurance Division of the National Financial Ombud Scheme (NFO) says too often people discover after a fire, flood, or theft that the payout they receive is far less than expected because the value of their home contents was never updated.

Home contents insurance protects your personal belongings inside the house, such as furniture, appliances, clothing, and jewellery. It differs from building insurance, which covers the physical structure of the property.

Edite Teixeira-Mckinon, Lead Ombud of the Non-life Insurance Division of the NFO said disputes arise when consumers are dissatisfied with the insurer’s settlement offer after making a claim.

“It is important to bear in mind that jewellery appreciates, technology depreciates, and replacement costs shift constantly. Without regular reviews, your cover may leave you dangerously exposed, turning years of paid premiums into little more than false reassurance,” she said.

When it comes to home contents insurance, the amount you receive after a claim is not always straightforward. Several key factors determine the final settlement, and understanding them can help you avoid unpleasant surprises:

Underinsurance
Underinsurance occurs when the contents are not insured for their full, up-to-date replacement value. In such cases, insurers may apply the principle of average, meaning the payout is reduced proportionally. To avoid this, consumers must ensure that the sum insured, which is the maximum payout in the event of a claim, accurately reflects the current replacement value of all household contents. Regular reviews of the sum insured are essential to keep it aligned with rising replacement costs.

Replacement Value
Contents policies typically cover the replacement cost of an item, not its original purchase price. Because most household items depreciate over time due to wear and tear, the replacement cost is often lower than what was originally paid.

However, not all items depreciate. Jewellery, for example, may increase in value as the price of gold and precious gems rises. Consumers should update the sum insured to reflect these changes, or risk receiving a lower payout for valuable items.

Proof of Quantum
The responsibility lies with the consumer to prove the value of items claimed. This usually requires proof of ownership or purchase. Older items or gifts often present challenges as documentation may be missing. Some insurers may still settle such claims at an entry-level value, which is usually less than the amount claimed. Importantly, consumers must never submit false or inflated documents. Doing so could lead to the insurer rejecting the entire claim under the total forfeiture clause, which is standard in most policies. Even one fraudulent item can invalidate the whole claim and lead to the insurer cancelling the policy.

Dispute Over Ring Insurance Settlement
Teixeira-Mckinon cited a case study of a complainant who challenged her insurer’s settlement after her ring was stolen. She asked for a cash payout, and the insurer offered R59 030 based on a replacement quote from its service provider. The complainant argued this was far below both the sum insured (R155 000) and her jeweller’s valuation certificate (R125 000).

The insurer explained that the sum insured is only the maximum liability. If the actual replacement cost is lower, the insurer’s obligation is limited to the replacement cost. Since it could replace the stolen ring with exactly the same ring for R59 030, the insurer maintained its offer was fair. To address the gap between the settlement and the sum insured, it also offered to refund the difference in premium.

“Our office agreed that the insurer had met its duty to indemnify, in other words, its obligation to put the complainant back in the same position she was in before the loss. The complainant accepted the settlement and the premium refund.

“The lesson learned is that the sum insured is not a guaranteed payout – it’s the maximum the insurer will pay. If the replacement value of an item is lower, the insurer’s liability is limited to that amount. Consumers should regularly update valuations and sums insured to avoid disputes and ensure the cover reflects current replacement costs,” said Teixeira-Mckinon. She added that insurance is not just about paying premiums – it’s about making sure that your cover truly protects what matters most.

“Outdated valuations can leave you underinsured and facing financial shortfalls when disaster strikes. The lesson is simple: review and update the value of your home contents regularly.

By keeping your cover aligned with current replacement costs, you safeguard your peace of mind and ensure that, should the worst happen, you are in a position to recover financially,” Teixeira-Mckinon said.

Contact details for the NFO:

Telephone: 0860-800-900

WhatsApp: +27 (0) 76 574 8055

Email: [email protected]

09 February 2026

One of the common exclusions found in insurance contracts relates to claims arising from criminal and illegal activities such as resisting lawful arrest and driving under the influence of alcohol.

Insurance exclusions are provisions that specify circumstances under which claims will not be paid, even though your policy is active and premiums are fully paid. Insurers generally will not indemnify losses that arise from unlawful conduct, reflecting the principle that insurance is designed to protect against unforeseen risks, not deliberate or illegal acts.

In a matter recently reviewed by the Life Insurance Division of the National Financial Ombud Scheme (NFO), an insurer declined a claim following the death of the insured, citing criminal conduct. The policy expressly stated that no claim would be paid if the insured event was caused directly or indirectly by criminal conduct, including circumstances where the insured was under investigation, being prosecuted, or had been convicted of a criminal offence.

Evidence revealed that police officers were attempting to arrest the deceased when he allegedly seized an officer’s firearm and attempted to discharge it. He was subsequently fatally shot by other officers at the scene. With no evidence contradicting the police account, the insurer concluded that the death arose directly from criminal conduct and, therefore, fell within the exclusion.

“Our office agreed that the insurer was not contractually obliged to pay the claim, and the decision to decline it was justified,” said Denise Gabriels, Lead Ombud of the Life Insurance Division of the NFO, adding this case demonstrates how exclusions can decisively determine the outcome of a claim.

“Insurance exclusions are not hidden traps. They are fundamental to how insurance works. For policyholders, understanding exclusions is just as important as knowing what is covered. By reading carefully, asking questions, policyholders can ensure that they are adequately protected and avoid unpleasant surprises when it matters most,” said Gabriels.

Common Categories of Exclusions

Common categories of exclusions are the following:

• Criminal Acts: Claims arising from illegal activity.
• Hazardous Pursuits: Activities such as skydiving, scuba diving, or mountaineering may be excluded due to their elevated risk profile.
• Pre-existing Conditions: Health conditions diagnosed before the policy’s inception – such as heart disease, diabetes or asthma – are often excluded.
• War and Terrorism: Losses caused by war, terrorism, or civil unrest are generally excluded due to their catastrophic and unpredictable nature.
• Intentional Acts: Claims resulting from deliberate harm such as suicide or self-inflicted injury – usually within the first 12 to 24 months after the policy starts – are excluded.

Who Must Prove An Exclusion?

The policyholder or beneficiary must first show that a valid policy exists, and the insured event occurred (such as death, disability, or diagnosis of a covered critical illness).

Once this is established, the burden shifts to the insurer. If the insurer wants to reject the claim based on an exclusion, it must prove that the exclusion clearly applies. This often requires evidence such as medical records, toxicology or pathology reports, accident reports or police findings.

If the insurer cannot prove that the exclusion applies on the balance of probabilities, the claim should be paid.

Gabriels said exclusions don’t mean your insurance won’t work -they define when it will. Knowing what is excluded, where to find exclusions in your policy, and who must prove they apply puts the insured in a much stronger position.

“When taking out cover, ask questions about exclusions you don’t understand. Keep copies of all disclosures you made during application.

“Read the policy document carefully and make sure you understand its contents. If anything is unclear, contact the insurer or adviser for clarification. If the policy does not accurately reflect the information provided during application, request that it be corrected.

“Insurance is about peace of mind. Understanding exclusions helps ensure that peace of mind lasts when you need it most,” Gabriels added.

Contact details for the NFO:

Telephone: 0860-800-900

WhatsApp: +27 (0) 76 574 8055

Email: [email protected]