Turkish Court Clarifies Consumer Status in Finance Contracts: Key Takeaways for Businesses and Individuals
- SADIK ISLER
- Sep 9
- 3 min read
In a recent ruling, the Court of Cassation (Yargıtay) in Turkey has once again highlighted the importance of correctly identifying consumer status in disputes arising from finance and participation contracts. The decision, delivered on 16 June 2025 following a kanun yararına temyiz (appeal in the interest of law) by the Ministry of Justice, provides valuable guidance for both companies and consumers operating in the financial services sector.
The Background of the Case
The dispute originated from a “Sıra Tespitli Tasarruf Planı Sözleşmesi” (Order-Determined Savings Plan Agreement) concluded between a consumer and a finance company. The consumer later applied to the Consumer Arbitration Board (Tüketici Hakem Heyeti) for the return of part of the organisational fee paid under the contract. The Board partly upheld the consumer’s claim.
The finance company subsequently brought the matter before the Bursa 2nd Consumer Court, seeking annulment of the Board’s decision.
First Instance Court’s Approach
The local court accepted the finance company’s argument that the individual involved had sought to purchase land rather than residential property. On that basis, it ruled that the individual was not a consumer within the meaning of the Consumer Protection Law (Law No. 6502). The court therefore annulled the Consumer Arbitration Board’s decision, finding that the dispute did not fall under its jurisdiction.
Ministry of Justice Intervention
The Ministry of Justice challenged this ruling through the appeal in the interest of law mechanism, raising two key objections:
Right to be heard: Both parties’ lawyers had submitted justifiable excuses for not attending the final hearing. The court nevertheless ruled on the merits of the case without addressing these excuses, thereby infringing the principle of “hukuki dinlenilme hakkı” (the right to be heard), protected under Article 27 of the Civil Procedure Code and Article 36 of the Turkish Constitution.
Consumer status: The Ministry argued that the individual had signed a finance contract for housing purposes, acted outside any professional or commercial activity, and was therefore a consumer. As such, the Consumer Arbitration Board was competent to hear the dispute.
Court of Cassation’s Findings
The Court of Cassation upheld the Ministry’s position, ruling that:
Failing to address the parties’ absence excuses before delivering judgment violated the right to be heard, a fundamental principle of fair trial rights under Turkish and international law.
The individual was indeed a consumer, since the contract concerned housing finance and there was no evidence of a commercial or professional purpose. Consequently, the dispute fell squarely within the scope of the Consumer Protection Law (Law No. 6502), and the Consumer Arbitration Board was competent.
Although the ruling was made in the context of a “kanun yararına temyiz” (which does not affect the outcome of the specific case), it sets a significant precedent for future disputes.
Why This Matters
This decision offers several important lessons:
Broad interpretation of consumer status: Turkish courts continue to interpret the concept of “consumer” broadly, focusing on the purpose of the transaction rather than the specific type of property or asset involved. Even contracts framed as relating to land may still fall within the scope of consumer law if the buyer acts outside a professional context.
Procedural safeguards: Courts must carefully respect the right to be heard, even when parties submit excuses for non-attendance. Ignoring such requests can amount to a violation of fair trial rights.
Practical implications: Finance and participation companies operating in Turkey must review their contracts and dispute resolution strategies. Labelling a transaction as “non-consumer” will not automatically shield a company from consumer protection rules if the individual’s purpose is personal.
At CCS Law, we regularly advise financial institutions and individuals on consumer law compliance, dispute resolution, and contract structuring. This ruling underscores the importance of aligning finance contracts with Turkish consumer protection standards to avoid jurisdictional challenges and reputational risks.
