While many South Africans were winding down for the festive season, two significant developments affecting consumers took place in mid-December last year.
The first was a judgment handed down by the Supreme Court of Appeal in Van Niekerk v FirstRand Bank Limited, which materially shifts where consumers can seek recourse when financed goods turn out to be defective. The ruling allows consumers to claim directly against banks, bypassing delays or disputes with dealerships, and confirms that banks may be held liable for harm caused by defective products, including accidents and pile-ups.
The second was a settlement agreement between the National Consumer Commission (NCC) and We Buy Cars (Pty) Ltd, under which the used-car dealer agreed to pay a R2.5 million administrative fine and R3.4 million in consumer redress. The case underscores regulators’ growing intolerance of contractual fine print being used to dilute consumer protection, particularly in the used-car market – one of the most complained-about sectors in South Africa.
If you missed these two developments amid the year-end slowdown, here is what they mean for consumers.
SCA: banks can be held liable for defective vehicles
A Supreme Court of Appeal judgment delivered on 10 December 2025 has significantly strengthened the position of consumers who finance vehicles that later prove to be defective.
In Van Niekerk v FirstRand Bank, the Court upheld a consumer’s right to cancel a vehicle finance agreement and claim a refund after a bakkie was found to have latent defects – despite the vehicle having been purchased through a motor dealership.
The case arose from the purchase of a 2012 Ford Ranger financed through the bank after being sourced from a Klerksdorp dealer. Within days of delivery, the vehicle developed gearbox problems and was returned for repairs. Although the gearbox was replaced, the vehicle overheated again within two months.
Expert evidence showed that the replacement gearbox had been manufactured for an entirely different vehicle model and that the vehicle had likely been involved in an accident and fitted with inappropriate parts. The defects, the Court found, could not have been detected through ordinary inspection.
After the consumer formally cancelled the credit agreement in April 2018, the bank sued for cancellation and damages. The consumer counterclaimed for confirmation of the cancellation and repayment of her deposit and instalments already paid. The High Court initially ruled in the bank’s favour, holding that the consumer had waived her rights by allowing repairs and that the Consumer Protection Act (CPA) did not apply.
The SCA rejected both findings.
It held that waiver requires the voluntary abandonment of a known right and that returning a vehicle for repairs did not amount to giving up the right to cancel. The Court further found that the High Court had misapplied the CPA by excluding it simply because the transaction involved a credit agreement regulated by the National Credit Act.
On a purposive interpretation of the agreement, the SCA concluded that the bank functioned not only as a credit provider but also as a supplier of the vehicle. While credit agreements themselves may be excluded from the CPA, the goods financed under those agreements are not.
The Court also held that the consumer was not required to exhaust CPA remedies before approaching the courts, particularly where the bank itself had elected to litigate.
As a result, the SCA set aside the High Court’s ruling, dismissed the bank’s claim, confirmed the cancellation of the agreement, and ordered the bank to repay R170 023.23, plus interest at the prescribed rate of 10.25% from April 2018, along with legal costs.
The judgment has far-reaching implications for consumers.
“Where a consumer would previously have returned his vehicle to the dealership if it turned out to be a lemon, if it’s financed, the financier now has to carry the can,” Van Niekerk’s attorney, Trudie Broekmann, told IOL.
She said the ruling places appropriate responsibility on banks, which have historically distanced themselves from defects, even where those defects pose serious risks to road users.
Consumers can now claim directly against banks for defective vehicles, avoiding delays and disputes with dealerships. Banks may also be held liable for harm caused by defects, including accidents and pile-ups, she said.
Tribunal confirms We Buy Cars settlement with NCC
Just days later, another consumer-focused development followed in the used-car sector.
On 19 December 2025, the National Consumer Tribunal confirmed a settlement agreement between the National Consumer Commission and We Buy Cars, making it a consent order in terms of section 74(1) of the Consumer Protection Act.
The settlement followed an investigation triggered by complaints lodged over a three-year period, in which consumers alleged that WBC failed to provide remedies in line with its sale agreements. The NCC formed a reasonable suspicion that certain contractual terms – particularly those dealing with warranties and conditions of sale – contravened several provisions of the CPA.
Under the agreement, WBC has committed to a range of remedial measures aimed at strengthening consumer protection and improving service delivery. These include the payment of a R2.5 million administrative fine and refunds totalling R3.42 million to 31 affected consumers.
The company has also agreed to revise its terms and conditions to align with the CPA, roll out a consumer awareness programme focused on pre-owned vehicle purchases and consumer rights, and create 300 additional jobs over five years to enhance customer service capacity.
Welcoming the confirmation of the consent order, Acting NCC Commissioner Hardin Ratshisusu said the settlement concluded the investigation and would deliver tangible outcomes for consumers.
“This settlement concludes investigations against We Buy Cars on contraventions of the CPA. We Buy Cars, amongst other commitments, has agreed to review and amend terms and conditions to ensure full compliance with the CPA, a measure that will ensure consumer rights are fully protected,” he said.
Consumers affected by the conduct will receive redress as part of the settlement, Ratshisusu added.
Together, the two developments reflect a tightening regulatory and judicial approach, with suppliers and financiers increasingly being held accountable for defective products and unfair contractual terms, and fewer avenues to evade consumer protection obligations through technicalities or fine print.
