Foschini falls foul of NCR over club fees

THE Foschini Group is the latest national retailer to be referred to the National Consumer Tribunal for charging account holders a club fee on their credit agreements.

That is an illegal practice‚ confirmed the National Credit Regulator (NCR)‚ which has conducted investigations into a string of retailers who operate “clubs” for their account holders‚ offering various discounts and perks for a monthly fee.

Foschini (TFG) said in response its “Club” and “SuperClub” subscription products were optional magazine subscriptions with insurance and other benefits that could be subscribed to at application stage or later via telemarketing. “These subscriptions can be cancelled by customers at any time‚ without penalty‚” the company argued.

“TFG is of the view that its referral is incorrect‚ as the National Credit Act does not limit which products retailers may sell to its customers on their credit accounts.

“TFG will be opposing its referral to the tribunal.”

South Africa’s biggest non-food retailer‚ Edcon‚ was found guilty in May of charging hundreds of thousands‚ if not millions of rands‚ to account holders in illegal fees for the past decade‚ a ruling which the company has since appealed against.

The NCR announced it had also referred Mr Price Group to the tribunal after an investigation which revealed it, too, had been charging consumers a club fee on credit agreements.

Last month the tribunal dismissed the regulator’s case against Lewis Stores for offering customers extended warranties and club membership for extra fees‚ because those fees were reflected by the furniture retailer in a separate “statement of account” rather than being included in the credit agreement itself.

The NCR is appealing against that finding.

In TFG’s case‚ the NCR wants the tribunal to do what it did in the other cases – order the company to refund affected consumers the club fees charged‚ conduct an independent audit into its loan book to determine the number of consumers to be refunded‚ interdict TFG from charging consumers a club fee on credit agreements and impose an appropriate administrative fine on the company. — TMG