Buying goods on credit is part of everyday life for many South Africans, particularly when it comes to big-ticket items like vehicles. But what happens when those goods turn out to be defective? Can a bank or credit provider simply rely on the credit agreement and avoid responsibility?

A recent judgment from the Supreme Court of Appeal (SCA) has delivered a clear and reassuring answer for consumers: your rights do not disappear just because you bought on credit. This case confirms that both the Consumer Protection Act and long-standing common-law remedies remain firmly in place, even where a credit agreement exists.

What is the Consumer Protection Act?
The Consumer Protection Act 68 of 2008 (CPA) promotes fairness, transparency, and accountability in the marketplace. Its core purpose is to protect consumers from goods and services that are unsafe, defective, or not fit for their intended purpose.

The CPA gives consumers enforceable rights against suppliers who fail to meet these standards, supported by clear remedies, including:
• The right to goods that are of good quality and fit for purpose
• The right to cancel certain transactions when goods are defective
• Remedies such as refunds, repairs, or replacement

While uncertainty previously existed about how these protections apply to credit agreements, that position has now been clearly settled.

A turning point in consumer credit law
In a recent decision, the SCA reaffirmed the strength of the CPA by confirming that consumer protections apply even where goods are purchased on credit. This means that suppliers and financiers cannot rely on credit agreements to sidestep responsibility for defective goods.

The court made it clear that consumer rights under the CPA operate alongside both the National Credit Act (NCA) and common-law remedies. This case allowed the SCA to clarify the intersection between consumer protection rights, credit agreements, and defective goods. And its findings strongly favour consumers.

The case that put consumer rights to the test
The dispute began in December 2017 when Mrs Aletta Cateriena van Niekerk purchased a 2012 Ford Ranger from a dealership in Klerksdorp. The vehicle was financed by FirstRand Bank Limited under a credit agreement regulated by the National Credit Act 34 of 2005.

Shortly after the purchase, serious mechanical problems emerged. The gearbox malfunctioned and was incorrectly repaired, leading to further defects and ongoing issues with the vehicle.

Frustrated and left with an unreliable car, Mrs Van Niekerk attempted to cancel the agreement and demanded repayment of her deposit and the instalments already paid to the bank. When this failed, the matter proceeded to court.

The High Court initially ruled against her, finding that she had waived her rights by first allowing the vehicle to be repaired. The court also concluded that the CPA did not apply to credit agreements.

Mrs Van Niekerk then took the matter to SCA, which overturned the High Court’s decision and firmly rejected its reasoning. In doing so, the court clarified two important legal principles:

1. Common-Law remedies still apply to credit agreements
The court confirmed that Mrs Van Niekerk had not waived her common-law right to actio redhibitoria: the right of a purchaser to cancel a sale and claim a full refund when goods are materially defective. Crucially, the court held that this remedy remains available even where the purchase is financed under a credit agreement.

2. The Consumer Protection Act still governs the quality of goods
The SCA further ruled that the CPA’s quality standards do not lose force simply because a credit agreement exists. Goods bought on credit must still comply with the CPA’s requirements: they must be safe, of good quality, and fit for purpose.

The relief granted
The SCA ordered that the credit agreement be cancelled. Mrs Van Niekerk’s counterclaim against the credit provider succeeded, and she was ordered to be restored to her position before the transaction.

This meant that:
• Her deposit had to be refunded
• All instalments already paid had to be repaid

The outcome placed the financial risk of defective goods squarely where it belongs: on the supplier and financier, not the consumer.

A pivotal judgment for consumers
This decision significantly strengthens consumer protection where goods are purchased through credit agreements. It confirms that buyers of financed goods, particularly vehicles, retain their rights under both the CPA and common law when defects arise.

Banks and credit providers cannot hide behind contractual terms to escape accountability. Where goods are defective, consumers may pursue remedies against both the supplier and the financier. The judgment also affirms that consumers do not need to exhaust every possible remedy before approaching a court to enforce their rights.

Conclusion
At its core, this judgment reinforces the constitutional values underpinning the Consumer Protection Act: fairness, justice, and protection against exploitation. These values do not stop at the doors of credit agreements.

By extending CPA protections into financed transactions, the SCA has sent a clear message: consumer rights travel with the goods, not the payment method. Suppliers and credit providers alike are bound to uphold these standards, ensuring greater accountability and confidence in the marketplace.

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