Lewis Stores wins bat­tle against club fee charges

The Star Early Edition - - COMPANIES - ANA

THE NA­TIONAL Con­sumer Tri­bunal (NCT) yes­ter­day handed down judg­ment in favour of Lewis Stores, dis­miss­ing an ap­pli­ca­tion by the Na­tional Credit Reg­u­la­tor (NCR) against Lewis in re­la­tion to charg­ing club fees and ex­tended war­ranties to cus­tomers.

This comes after the NCR re­ferred Lewis to the Tri­bunal in April last year, al­leg­ing the group was in breach of the Na­tional Credit Act (NCA) as a re­sult of charg­ing con­sumers a club fee on credit agree­ments since 2007.

The NCR al­leged the main­te­nance costs and club fees were charged in con­tra­ven­tion of the credit act and re­quested the Tri­bunal to or­der Lewis Stores to re­pay main­te­nance costs and club fees to cus­tomers.

The NCR fur­ther re­quested the Tri­bunal res­trains Lewis Stores from charg­ing main­te­nance costs and club fees to cus­tomers in an un­law­ful man­ner in the fu­ture and sought cer­tain an­cil­lary re­lief, including the im­po­si­tion of an ad­min­is­tra­tive fine of 10 per­cent of the an­nual turnover of Lewis Stores.

In its judg­ment, the NCT found club fees charged by Lewis do not form part of the cost of credit of credit agree­ments be­tween Lewis and its cus­tomers.

The NCT also ruled the NCA al­lows Lewis to in­clude the cost of an ex­tended war­ranty in credit agree­ments and does not pre­scribe terms and con­di­tions of such ex­tended war­ranty of­fered to its cus­tomers.

Jo­han Enslin, chief ex­ec­u­tive of the Lewis Group, wel­comed the NCT’s rul­ing, say­ing it con­firmed the group’s com­mit­ment to re­spon­si­ble credit prac­tices and reg­u­la­tory com­pli­ance.

“The NCA does not pre­vent credit providers from of­fer­ing the ser­vices of a club to its cus­tomers, pro­vided these ser­vices are not part of the ‘cost of credit’,” Enslin said. “There­fore, the of­fer­ing of club fees and ex­tended war­ranties by Lewis did not con­sti­tute pro­hib­ited con­duct.”


Lewis of­fers club fees with ex­tended war­ranties.

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