Black Friday credit spending could ruin your budget, says NFO

As South Africans prepare for Black Friday on November 28, the National Financial Ombud (NFO) is urging consumers to think twice before swiping their way into a financial hangover.

The NFO says while seasonal discounts may offer short-term appeal, the long-term consequences of overspending on credit, including high-interest debt and depleted savings, can derail essential financial goals and lead to post-holiday hardship.

The NFO has also cautioned that digital fraud tends to spike during the year-end holiday season.

Nerosha Maseti, credit and banking division lead ombud at the NFO, says Black Friday, known for massive sales and long lines, is a shopper’s adrenaline rush with jaw-dropping discounts, limited-time offers, and the thrill of snagging the perfect deal.

“But beneath the buzz lies a financial minefield. Swipe-happy spending can spiral into credit card chaos, and lurking digital scams are ready to pounce when vigilance slips.

“To truly win the day, smart shoppers arm themselves with a plan, stay sharp online, and keep their budgets on lockdown. After all, the best deal is one that doesn’t cost your peace of mind,” says Maseti.

According to Maseti, many South Africans rely on credit to fund Black Friday purchases, but impulsive spending can quickly lead to unmanageable debt.

Maseti warns that the risks include:

• High-interest credit card balances or short-term loans
• Depletion of savings meant for key goals like home ownership, education, or emergencies
• Financial strain in the new year, when repayments come due, leaving little room for essential expenses

She advises consumers to:

• Set a spending budget and stick to it
• Prioritise long-term financial goals over seasonal bargains
• Keep credit balances low to maintain financial health

The NFO has also raised concerns about a surge in credit card scams, particularly targeting shoppers using non-bank and store-branded credit cards linked to major retailers.

“These criminals contact cardholders by phone, impersonating representatives from these companies, and deceive unsuspecting consumers into revealing their confidential One-Time Pins (OTPs) to make unauthorized purchases at large merchants, leaving victims responsible for fraudulent charges.

“While this scam has been known in traditional banking circles for many years, its rising prevalence in the non-bank credit card market is deeply concerning. The NFO is particularly worried that such fraud will escalate over Black Friday with high transaction volumes and increased consumer activity.

“It is crucial for cardholders to remember that no legitimate company will ever ask them to share confidential information such as card numbers, passwords, or OTPs. Providing an OTP to a fraudster can result in the consumer being held liable for fraudulent purchases, leading to significant financial loss without any benefit,” Maseti says.

She says fraudsters are also targeting bank customers in new ways. According to Maseti, a recent case investigated by the NFO revealed a consumer lost R120 000 after responding to a social media advert offering discounted airline tickets.

After submitting her phone number and email via a link, she was contacted through WhatsApp and instructed to download an app from the Google Play Store to access promo codes. Though the link appeared secure, the app was fraudulent and embedded with malware, she says.

Maseti says her phone began overheating and behaving erratically. The unexpected activation of the camera’s green light raised immediate concerns. Upon checking her banking app, she discovered two unauthorised transactions and swiftly reported the incident to both her bank and the police.

Despite her prompt action, just 27 minutes after the transactions, the bank denied liability, citing that the payments had been authorised via selfie-authentication on her trusted device. The consumer escalated the matter to the NFO, seeking a full refund, she says.

Following the investigation, the NFO found that the funds had already been utilised before the fraud was reported, leaving no opportunity for recovery. The bank also provided evidence that biometric authentication was used to approve the transactions, Maseti says.

“By downloading the fraudulent app, the consumer essentially handed over her phone, including all the information stored on her phone, to the criminals, and this resulted in the fraud. The NFO accordingly could not conclude that the bank was liable for the consumer’s loss," Maseti says.

To protect against mobile app scams, Maseti shared the following advice:

• Never share your OTP with anyone, even if they claim to be from your credit provider
• End suspicious calls immediately and contact your credit provider directly using an official phone number
• Be sceptical of social media promotions
• Verify legitimacy via official airline websites or verified social media accounts
• Avoid posting personal information publicly
• Only download apps from verified developers with strong reviews and high download counts
• Monitor your bank accounts closely
• Check transactions daily, especially after suspicious activity
• Report fraud immediately to your bank and file a police affidavit if needed

Maseti says the National Financial Ombud assists consumers with credit and fraud-related disputes involving banks and credit providers. These include:

• Fraudulent transactions and unauthorised debit orders
• Incorrect credit listings
• Reckless lending or contractual disputes

Consumers facing challenges are encouraged to contact the NFO on 0860 800 900 or email info@nfosa.co.za.

PERSONAL FINANCE