NA­TIONAL CON­SUMER TRI­BUNAL

Mr Price takes on NCR in fight over club fees

The Star Early Edition - - BUSINESS REPORT - Siseko Njobeni

THE Na­tional Credit Reg­u­la­tor (NCR) yes­ter­day said it had re­ferred listed-re­tailer Mr Price Group to the Na­tional Con­sumer Tri­bunal fol­low­ing a probe which re­vealed the chain has ap­par­ently been un­law­fully charg­ing con­sumers a club fee on credit agree­ments.

The devel­op­ment, which puts the spot­light on the preva­lence of the club fees on credit agree­ments, comes shortly af­ter the tri­bunal’s re­cent rul­ing that the monthly club fees charged by the Ed­con Group – which op­er­ates the Edgars, Jet and CNA stores – were un­law­ful. Ed­con said it would ap­peal the de­ci­sion.

Charg­ing a club fee on credit agree­ments was not per­mit­ted by the Na­tional Credit Act, the NCR said in a state­ment yes­ter­day.

It had re­quested Mr Price to pro­duce a fully-au­dited re­port of the club fees charged to con­sumers from 2007.

The reg­u­la­tor al­luded to the preva­lence of the club fees, say­ing it had al­ready re­ferred sev­eral re­tail­ers to the tri­bunal for charg­ing con­sumers a club fee on credit agree­ments. “In­ves­ti­ga­tions into the cost of credit are be­ing con­ducted across the credit in­dus­try,” it said.

The NCR said it had re­quested the tri­bunal to im­pose a fine of up to 10 per­cent of an­nual turnover, and to or­der that Mr Price re­fund con­sumers who were un­law­fully charged.

In a state­ment yes­ter­day, Mr Price said the al­leged trans­gres­sion only per­tained to Mi­lady’s, which is one of its six trad­ing di­vi­sions. Mi­lady’s, which is an au­tho­rised fi­nan­cial ser­vices and credit provider, of­fered the club prod­uct to their ac­count cus­tomers. “It is im­per­a­tive to note that this prod­uct is a stand­alone prod­uct which en­ti­tles vol­un­tary signed-up mem­bers to a num­ber of ben­e­fits in­clud­ing loyalty vouch­ers, savings with affin­ity part­ners and lifestyle mag­a­zines.

“Over the years, cus­tomers have been happy with the ser­vices and ben­e­fits as­so­ci­ated with the club and, as a group, we be­lieve in the value of­fer­ing which sup­ports our propo­si­tion of great fash­ion and value,” Mr Price said.

The group said it op­posed NCR’s re­fer­ral to the tri­bunal as it did not agree with the reg­u­la­tor’s view. It said it had ob­tained the ad­vice of se­nior coun­sel, “which was to the ef­fect that the NCR’s po­si­tion is un­ten­able as it ap­pears it has no ra­tio­nal ba­sis for the relief sought against the com­pany in these pro­ceed­ings. It should also be noted that the un­der­ly­ing judg­ment handed down by the tri­bunal against Ed­con, upon which the NCR re­lies in hold­ing this view, is be­ing ap­pealed”.

Mr Price shares on the JSE yes­ter­day shrugged off the al­leged con­tra­ven­tion, slip­ping only 0.33 per­cent to R149.51.

PHOTO: SIM­PHIWE MBOKAZI

Mr Price is chal­leng­ing the NCR on its re­fer­ral of the chain to the Na­tional Con­sumer Tri­bunal.

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