A major legal storm is brewing in South Africa’s financial sector, as the country’s biggest banks face a staggering R60 billion class action lawsuit. Thousands of former homeowners allege their properties were seized and auctioned off for a fraction of their true market value.
The lawsuit, which dates back to 2017, is now inching closer to trial. The court will first decide whether to certify the class, a necessary step for the collective legal action to proceed. The hearing is currently scheduled for February 2026.
Four of South Africa’s top banks—Absa, Nedbank, Standard Bank, and FirstRand—are named in the lawsuit, along with the National Credit Regulator, the Minister of Justice, and the Human Rights Commission.
Sold for a Song: Homes Auctioned Below Market Value
The plaintiffs claim that homes were sold at shockingly low prices, sometimes for as little as R1,000. One case allegedly involved a R1.3 million house sold at a deep loss. The issue stems from laws prior to 2017, when courts allowed sales without a minimum price.
Many affected homeowners say their properties were taken despite attempts to recover financially. Advocate Douglas Shaw, representing the claimants, argued that banks often went ahead with sales even when customers showed signs of regaining stability.
“Foreclosure should be a last resort,” Shaw said. “But banks are still selling houses for 50% to 70% of their value and pursuing the balance from the defaulters.”
The class action highlights over 100,000 home repossessions since 1994. The R60 billion figure represents estimated losses in home equity across these cases. Shaw added that many families have suffered homelessness for years as a result.
Regulators and Banks Push Back
Some of the evidence supporting the case was initially obtained through the National Credit Regulator (NCR). However, the NCR later resisted public disclosure, citing data privacy laws, including the National Credit Act and the Protection of Personal Information Act.
Standard Bank has acknowledged the legal challenge but denies any wrongdoing. It stressed that its operations follow strict ethical and legal standards and noted that the R60 billion figure is not in the official court filings.
Absa also responded, saying it treats repossession as a last resort and offers support to distressed homeowners. According to the bank’s home loans executive, Nondumiso Ncapai, customers can still negotiate repayment options up to the point of auction.
A Long Road Ahead
Nedbank confirmed it is defending the claim but emphasized that class certification must be approved before the case moves forward. It reiterated its commitment to helping customers avoid foreclosure through payment plans and restructuring options.
First National Bank declined to comment, citing the matter as sub judice.
As the case builds momentum, it raises pressing questions about the balance between financial institutions’ rights and consumers’ protection. For now, South Africa’s top lenders must prepare to defend their actions under the spotlight of public scrutiny.