There are many ways for startups in South Africa’s internet economy to get attention — but few are as immediate or as expensive as catching the eye of a regulator via digital advertising. Just ask African Bank, which recently received a R700,000 reminder from the Financial Sector Conduct Authority (FSCA) about the perils of dressing up debt as investment opportunity during the festive season.

The penalty, levied on the bank for its December 2023 #KeFestive social media campaign, illustrates just how watchful — and humorless — the FSCA can be when banks stretch advertising metaphors a little too far. The ad in question, featuring a familiar celebrity face, urged customers to take out loans with the claim “It’s not a skoloto chomi! Ke investment.” Translation: “It’s not debt, friend. It’s an investment.”

Unfortunately, and unsurprisingly, the FSCA disagreed.

In its recent press release, the FSCA patiently explained the multiple ways in which this phrase — and the campaign as a whole — violated Conduct Standard 3 of 2020 (Banks), the country’s advertising rulebook for financial institutions. Specifically, the statement failed the tests of clarity, fairness, and factual accuracy. The authority found the ad misleading in its representation of a loan as anything other than what it is: a credit product, with all the financial risks and long-term obligations that implies.

More damning still, the FSCA found that the bank had not only failed the truth test, but also failed its own internal checks. According to section 6(9) of the Conduct Standard, all advertisements must be reviewed and approved by someone with “appropriate seniority and expertise.” In African Bank’s case, the oversight process appeared to be as absent as the factual accuracy.

In a show of what passes for regulatory mercy, the FSCA suspended R200,000 of the R700,000 fine — on the condition that African Bank remains squeaky clean for the next two years. The rest, R500,000, has already been paid. The Authority did commend the bank’s cooperation and prompt remedial action, which included quietly removing the offending material and no doubt initiating a few stern internal memos.

The Real Cost of Clever Marketing

For startups entering South Africa’s financial or digital services space, this case is a valuable, if costly, lesson in how not to market a product — especially not to vulnerable or financially inexperienced consumers. A catchy phrase is not a legal strategy, and poetic license does not exempt anyone from the law.

And it’s not just the FSCA that’s watching. The Film and Publication Board (FPB), South Africa’s content watchdog, is equally active — though in their case, the stakes are often darker and far more disturbing.

In its 2024/25 financial year alone, the FPB received 21 cases related to child sexual abuse material (CSAM) and flagged over 18,000 pieces of harmful online content after analyzing more than 218,000 images and videos. With 12 arrests made and multiple investigations ongoing, the FPB’s message is clear: If your online content breaches the law — be it through ignorance or arrogance — the digital paper trail will lead them to your door.

According to FPB acting CEO Ephraim Tlhako, the board’s enforcement strategy combines old-fashioned human monitoring with AI-powered social media listening tools, resulting in a regulatory net that is increasingly difficult to slip through. For startups operating in content creation, marketing, or user-generated platforms, the definition of “compliance” is getting more nuanced by the day.

The FSCA, in its somewhat officious tone, reminds institutions that customers often base life-altering decisions on advertising claims. A personal loan dressed as an “investment” is not just a branding misstep — it’s a regulatory landmine with the potential to mislead those already under economic strain. For regulators, misrepresentation isn’t just a consumer protection issue; it’s a trust issue that reverberates across the entire financial system.

And yet, in the same breath, both regulators tacitly admit that they are playing catch-up in an environment where content goes viral faster than legal teams can blink. The FSCA still relies on post-mortem investigations; the FPB, despite its high-tech surveillance, faces the near-impossible task of moderating the digital sprawl.

Three Rules of (Regulatory) Engagement

First, if your product involves money — real money, not Monopoly metaphors — resist the urge to be too clever in your messaging. Advertising may thrive on hyperbole, but South Africa’s law doesn’t seem to.

Second, if you’re running a platform that allows or promotes user content, understand the difference between “edgy” and “illegal.” And yes, there is a difference.

Third, get serious about internal controls. Governance isn’t just for the big players with big compliance departments. Regulators don’t discriminate when they come knocking — only when they hand down fines.

As African Bank’s festive season misadventure demonstrates, South Africa’s regulators may not be on TikTok, but they’re watching closely. And they’ve made it clear: if you’re going to sell dreams, make sure they come with terms, conditions — and actual compliance processes.

Or better yet, just skip the clever hashtag and call your loan what it is.

1 South African Rand equals 0.053 United States Dollar on Friday April 4, 2025 at 9:43 GMT+1