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R700 000 Fine

The Financial Sector Conduct Authority (FSCA) has slapped African Bank with a R700,000 fine for running what it calls a misleading advertisement.

The bank’s ‘Ke Festive’ campaign, which aired on social media back in December 2023, falsely presented a credit product as an investment. 

Featuring a well-known personality, the ad encouraged consumers to take out personal loans with the phrase, “It’s not a skoloto chomi! Ke investment.”

The FSCA ruled this statement was inaccurate and could mislead consumers into believing that a loan was somehow a form of investment.

Not Clear Enough

The FSCA’s investigation found that African Bank violated Conduct Standard 3 of 2020, which ensures fair treatment of customers.

Specifically, banks must advertise financial products in a clear, fair, and truthful manner. The authority also highlighted flaws in the bank’s governance and oversight of the ad campaign.

It is true that any form of misleading advertising in regards to banking or even debt review can lead consumers to choose unsuitable financial products or services.

It is one reason why Debt Counsellors have recently been asked by the National Credit Regulator to submit copies of their advertising when doing monitoring visits. They too wish to ensure any adverts about debt review are clear.

Fine Reduced Due to Cooperation

In response to the investigation and fine, African Bank were quick to cooperate fully with the FSCA and took swift action to correct its mistake.

As a result of their swift cooperation, R200,000 of the penalty has been suspended for two years, provided the bank remains compliant.

The FSCA says that they hope this fine will serve as a warning to other financial institutions about the importance of clear and honest advertising. Ultimately, fair customer treatment helps maintain trust in South Africa’s financial system