NFO warns Black Friday shoppers about hidden cost of credit deals
The National Financial Ombud says instalment and buy now, pay later deals can push the real cost of Black Friday purchases well above the advertised price.
With Black Friday set for 27 November, the National Financial Ombud (NFO) has cautioned shoppers to think carefully before financing their bargains, SAnews reported.
Nerosha Maseti, the NFO’s Banking and Credit Lead Ombud, said the real price of buying on credit is seldom clear at the till. She explained that a discount lowers the purchase price, but a financing agreement leaves a repayment duty that continues once the sale is over.
Small instalments, bigger bill
The Ombud warned that low monthly payments can make a product seem more affordable than it is. As an example, a R6 000 item financed over 24 months at R350 a month adds up to R8 400. After interest, administration fees and compulsory insurance, the buyer pays R2 400 more, or 40% above the ticket price.
Maseti said an instalment may look manageable alone, but must be weighed against existing loans, household expenses and other commitments.
Buy now, pay later
The NFO expects more people to use buy now, pay later (BNPL) options this year. Some of these allow payments without interest, but the ease of deferring costs may tempt people into several purchases at once. Four separate purchases at R500 a month each would mean R2 000 a month in total. Maseti noted that every payment, however it is financed, comes out of the same household income.
She added that a credit approval under the National Credit Act should not be taken as proof that someone is financially healthy. Consumers should give accurate information, while lenders must meet their legal duty to assess affordability.
Returns and disputes
The NFO pointed out that the Consumer Protection Act gives buyers six months to return faulty goods for repair, replacement or a refund. Taking an item back, however, does not necessarily end a separate credit agreement. Shoppers should tell their credit provider straight away, get written proof of the store refund, and check that their loan balance is corrected.
What this means for you
The NFO’s advice for shoppers includes:
- Compare the full amount repayable, including interest, fees and insurance, not just the discount.
- Set a realistic spending limit that protects essential household costs.
- Add up all repayments, including store accounts and BNPL instalments.
- Do not let a time-limited offer drive a long-term decision.
- Read the agreement for charges, cancellation terms and what happens if you default.
- Keep receipts, agreements, repayment schedules and refund confirmations.
- Act quickly in a dispute and check that any agreed refund or adjustment has been applied.
Anyone struggling with a non-bank credit provider should first try to resolve the matter with that company. If it stays unresolved, the NFO’s Banking and Credit Division may look at qualifying complaints, including those on credit bureau reporting and fraud. The NFO can be reached on 0860 800 900 or at [email protected].
This story is based on reporting by SAnews.
