The National Consumer Tribunal has ordered a Gauteng-based dealership to refund more than R320,000 to a buyer who was misled by false advertising.
The case involved Johannesburg customer, R Prins and car dealership Midcity Motors 3 (Pty) Ltd, following a dispute over a second-hand vehicle advertised as being in “excellent condition.”
The tribunal found that the dealership’s claims were not only misleading but struck at the very heart of the sale agreement.
The tribunal ruled that the dealership’s conduct violated key provisions of the Consumer Protection Act (CPA), particularly those relating to fair and honest dealing and the accurate description of goods.
The dispute arose after Prins purchased the vehicle based on an online advertisement portraying it as being in excellent condition. However, he later discovered that the car had no full-service history, had been involved in an accident, and suffered from mechanical issues.
He argued he would not have purchased the vehicle at all if the dealership had advertised the vehicle correctly.
Despite his immediate dissatisfaction and request to rescind the sale, Midcity Motors failed to address his concerns for over two years. Prins had already sought and obtained a ruling from the Motor Industry Ombudsman of South Africa (MIOSA) in his favour, but the dealership failed to comply with the resolution.
In evaluating the case, the tribunal determined that Midcity Motors’ misrepresentation effectively voided the sale agreement, emphasising that misleading advertising practices severely compromise consumer trust.
“The supplier provided the consumer with something different from what was bought,” the tribunal noted, emphasising that misleading descriptions in online sales environments pose a growing risk to consumers.
Midcity Motors attempted to mitigate the issue by proposing a price reduction of 10% to 15%, arguing that the vehicle, despite its issues, remained usable. However, the tribunal dismissed this suggestion, asserting that permitting price cuts under such circumstances could encourage the dishonest behaviour they aimed to eradicate from the industry.
As a strong rebuke to the dealership, the tribunal ruled the purchase agreement as null and void, mandating that Midcity Motors refund the full purchase price of R323,950 within ten business days.
Furthermore, they were ordered to collect the vehicle at their own expense and cease advertising any vehicles as being in “excellent condition” unless supported by verified documentation, including vehicle histories and diagnostic reports.
The ruling also introduced an “innovative order”, requiring the dealership to ensure that any such claims are backed by verified vehicle histories, diagnostic reports, and reliable evidence.
The tribunal warned that misleading descriptions erode trust and harm not only individual consumers but the entire industry.
“The public interest necessitates sending a clear and strong message,” the Tribunal said, adding that such conduct demonstrates a disregard for consumer rights and statutory obligations.
Prins claimed that he suffered various damages and financial losses because he had no use of the vehicle from the date. He said he stored the vehicle and bought a different one for daily use. Additionally, he continues to make monthly payments on the vehicle finance while storing the vehicle,
While Prins sought compensation for additional financial losses, including storage costs and loan repayments, the tribunal clarified that it does not have the authority to award damages. However, it noted that he is free to pursue a civil claim in court using the tribunal’s findings as supporting evidence.
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Sinenhlanhla Masilela
iol.co.za
