Lewis Stores wins battle against club fee charges
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.