A Ford Ranger Double Cab similar to the one the Gerrie van Niekerk bought. file photo: Ford SA
Johannesburg  - To what extent can a customer hold a finance house responsible for ending up with a “lemon”? It’s an interesting question, raised by a Klerksdorp farmer who had purchased a second-hand Ford Ranger 4x4 on 19 December 2017 from a local dealership, Autorama Klerksdorp, through WesBank for R330 597.

Supposed to be “Built Ford Tough”, this one was just not tough enough because Gerrie van Niekerk’s bakkie broke down just five days later. On December 27, it was towed to Autorama for repairs; the oil filter and gearbox were replaced at the dealership’s cost. But on 14 February 2018, Van Niekerk noticed the vehicle’s engine light was on, it lacked power and began to overheat. On March 2 it broke down again and on 6 March Autorama collected the vehicle, which is still in its possession.

The matter went south from there - Autorama took Van Niekerk to court in May to recover the courtesy car they had provided and Van Niekerk approached Consumer Protection Act specialist Trudie Broekmann for assistance.

To Broekmann, it was a clear-cut issue: in terms of Section 56(2) of the CPA, Van Niekerk is entitled to return the vehicle to Autorama or WesBank (ultimately, the supplier of the bakkie and with whom the contract was signed) and is entitled to a replacement of the vehicle or a refund.

The bank owns the vehicle

It’s important to note that banks purchase vehicles from dealerships in order to facilitate the financing of the instalment agreement. The bank becomes the owner of the vehicle and, in terms of the instalment agreement, it sells the vehicle to the consumer. The relationship between the bank and the consumer is governed by the terms and conditions of that instalment agreement, the common law, the CPA and the National Credit Act.

Broekmann wrote to both the dealership and the bank, demanding a refund of the purchase price (the cancellation of the credit agreement with WesBank, and a refund of payments to the bank, plus his deposit of R150 000).

Since the end of May, the Van Niekerks have had only a single-cab bakkie to transport their two children. They’ve stopped paying the instalments, on their lawyer’s advice, but the deposit and four instalments on the bakkie remain sticking points. Autorama won’t pay them back unless the Van Niekerks get a court order compelling them to do so.

Where does that leave the consumer? Apparently, very much up the creek.

Burden of proof

I asked WesBank why it had failed to cancel the contract and pay the consumer back his money, as required in terms of Section 56 of the CPA; whether the bank held dealerships to account; what steps it takes to ensure its vehicles are “of good quality, free of defects, fit for their purpose, usable and durable for a reasonable period”; and if it was happy with the way in which the Van Niekerks were treated.

This was their response: “When this incident first came to our attention, we investigated the matter. As it stands, the dealer alleges that there is clear evidence of negligence on the part of Mr Van Niekerk, which the customer has not yet refuted.”

Yet the consumer was never contacted during this apparent “investigation” and the burden of proof has somehow been wholly shifted on to the customer.

I asked WesBank whether or not it had independently verified evidence to back up the dealership’s claims, but it said in one mail it wouldn’t fight the issue in the media and then failed to respond to a subsequent mail.

'Consumer is being punished'

Its claims of negligent usage cannot go unchallenged, though - Broekmann says WesBank needs to supply that in the form of, for example, an independent mechanic’s report, but nothing like that has ever been forthcoming.

In an earlier mail, WesBank also claimed the dealership had repaired the vehicle twice, on an “ex gratia basis” (Van Niekerk says the dealership repaired it only once), but Broekmann says it was obliged to do so, at its own cost, in terms of the CPA.

“It is concerning that WesBank is so thoroughly unaware of the provisions and application of the CPA,” she notes. “The consumer is being punished as a result of WesBank’s failure to properly regulate its relationship with its dealers.”

WesBank did say, though, that its relationships with its approved dealers are “governed by a master agreement which aims to ensure legal and ethically sound business practices that are also aligned to the CPA. Furthermore, ensuring the sale of quality products is an integral part of a dealer’s operations, and running checks on vehicles through accredited, independent bodies are a standard part of the process”.

'They wash their hands'

Broekmann says WesBank is in fact supplying cars to consumers without checking whether the car is defective: “They seem to regard it as the dealer’s responsibility and when the dealer defaults on this, they wash their hands. However, as a supplier of a vehicle, the CPA requires them to refund the consumer for a defective vehicle. We fail to understand why WesBank is refusing to do so.”

WesBank claims it is “sympathetic to the predicament of the Van Niekerks and has done its utmost to assist in resolving this complaint within the dictates of the law. In terms of Section 56 of the CPA, a consumer may, within six months after the delivery of any goods, return the goods to the supplier, without penalty and at the suppliers’ risk and expense, if the goods fail to satisfy the requirements and standards.

The consumer then has the choice to direct the supplier to either repair or replace the failed, unsafe or defective goods, or to refund them the price paid.

The family don’t have to seek redress in the courts: they can report the dealership to the Motoring Ombudsman, approach the Banking Ombudsman about WesBank’s conduct - or approach the National Consumer Commission (NCC).

The NCC can take this to the Tribunal, which can impose a maximum fine of 10 percent of turnover for the past financial year, as well as ordering them to repay the Van Niekerks’ payments.

I’ll be watching closely.

The Star