SOUTH AFRICA, Johannesburg, 26 August 2025 – The National Automobile Dealers’ Association (NADA) is cautioning South African consumers about a growing financial scam involving unsolicited offers for debt relief. These schemes are designed to unknowingly enrol individuals into a formal debt review programme, making them ineligible for future vehicle finance.
Explaining the concerning trend, Brandon Cohen, NADA Chairperson, stated, “South Africans are increasingly receiving unsolicited calls from organisations offering debt relief services. By participating in a brief survey and answering a series of questions with a simple ‘yes,’ consumers may find themselves enrolled in a debt review programme without providing explicit consent.”
Debt review is a legal process designed to assist over-indebted consumers. It involves a debt counsellor, who gets paid for their service, assessing the applicant’s financial situation and negotiating with creditors to restructure their debt into a more manageable repayment plan. However, as Cohen points out, “The debt review program, once approved, becomes a court order to which the applicant must adhere until debts are fully settled.”
Noting that debt review plays a significant role in assisting consumers who find themselves in a debt-spiral, the decision to enter formal counselling must not be taken lightly, and a range of options also needs to be explored, such as speaking to the banks or a financial advisor.
The debt review process is not a quick-fix and can be protracted, lasting several years depending on debt obligations of the consumer. During this period, an individual under debt review will not be able to obtain any new credit. This poses a significant problem for those who are unwittingly enrolled, especially when they need to apply for vehicle finance.
Being under debt review also has a lasting impact on an individual’s credit record and credit score. Even after the process is complete, a debt review note on a consumer credit report can make it difficult to secure new credit at an affordable rate.
In the automotive industry, NADA has observed a rise in car finance application rejections due to buyers being under debt review. To avoid this, Cohen advises consumers to remain vigilant when speaking with agents who offer debt relief services. “Do not consent to anything you do not fully understand and have had a chance to think about. Make certain debt review is the right option by conducting independent research and only make use of the services of registered debt counsellors with a proven positive track record. We also recommend using caller identification software to help avoid these unsolicited calls that can lead to the debt review trap.”
