Western Cape High Court orders MBD to comply with March ruling in R462m debt-review dispute

The Western Cape High Court has ordered MBD Legal Collections to implement a March court order immediately, despite the company’s ongoing appeal, in a dispute involving more than 44,000 debt-review accounts with a reported book value of about R461.7 million.

What the court ruled

The March order declared that MBD was bound by an agreement between RCS Cards and Consumer Friend, recognising Consumer Friend as a permitted assign or legal successor and preserving Consumer Friend’s right to continue administering the affected accounts.

The earlier order required MBD to restore existing payment arrangements and prohibited MBD from rerouting payments or otherwise interfering with Consumer Friend’s administration of the portfolio.

Appeal and immediate effect

MBD had been granted leave to appeal the March order, which normally suspends a judgment. Consumer Friend returned to court asking that the March ruling be enforced while the appeal proceeds.

Judge Ndita found that keeping the March order suspended would cause irreparable harm to Consumer Friend and would disrupt consumers under debt review, and consequently ordered that the March ruling take effect immediately while MBD’s appeal is decided.

Background of the dispute

The legal fight began after MBD bought a portfolio of debt-review accounts from RCS Cards in September 2025. Consumer Friend had been administering those accounts under an agreement that entitled it to continue administering “Paying Matters” until the debts were settled. Procurement documents for the sale stated the portfolio would come with Consumer Friend as managing agent and that it would retain the right to collect on those accounts.

After the acquisition, MBD continued using Consumer Friend and paid commission for several months. In January, MBD told Consumer Friend it did not accept being bound by the agreement, described the relationship as month-to-month and sought to terminate it from the end of February, while also seeking to redirect payments to itself.

Consumer Friend obtained the March order declaring MBD bound by the agreement and restoring the prior payment arrangements; MBD then appealed.

Allegations of payments being rerouted

The court heard that MBD continued attempts to reroute payments while the earlier order was suspended. In April, MBD’s attorneys demanded that Debt Busters redirect payments to MBD and threatened urgent proceedings, punitive costs, damages and a complaint to the National Credit Regulator if it failed to comply. MBD also approached Zero Debt, Pioneer Debt Solutions and PayPlan as part of its efforts to reroute payments.

Impact on consumers and Consumer Friend

Consumer Friend told the court that rerouting payments meant it no longer received transaction information directly and instead depended on information supplied by MBD or related company Capital Data. It said delays or problems could lead to incorrect account balances and statements, incorrect terminations, delayed paid-up letters, incorrect settlement figures or an inability to respond accurately to consumers or debt counsellors.

MBD disputed that the changes harmed consumers, arguing that relevant information remained available from payment distribution agencies, debt counsellors and creditors, and that as a creditor it was entitled to reroute payments. MBD also said any harm to Consumer Friend related to commission payments and could be remedied financially.

Judge Ndita found there had been delays in transactional information flowing from MBD and Capital Data to Consumer Friend, and that the effect was magnified by the portfolio’s scale of 44,216 accounts. The judge concluded Consumer Friend would suffer irreparable harm if the March order remained suspended, while MBD had not identified comparable operational or reputational consequences if the order took effect.

Costs and other notes

The court ordered that the March ruling take effect while MBD’s appeal is determined and directed that MBD pay the legal costs of the enforcement application, including the costs of two counsel at the higher Scale C rate.

Consumer complaints

MBD has received thousands of reviews on the platform HelloPeter, where it has a rating of 1.1 out of five based on 438 reviews over the past 12 months and more than 7,000 reviews overall. Recent complaints, as recorded on the platform, include allegations of payments not being correctly allocated, consumers continuing to receive demands after making payments, difficulty obtaining paid-up letters and unresolved account queries. These complaints are allegations made by consumers and have not necessarily been independently verified.