Nerosha Maseti, Lead Ombud for the NFO’s Banking and Credit Division

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.