Foschini in breach of credit act - NCR
By Matthew le Cordeur - Jul 4th 2017, 14:08
The National Credit Regulator (NCR) on Tuesday referred Foschini to the National Consumer Tribunal (NCT) for being in breach of the National Credit Act.
The referral follows an investigation by the NCR, which revealed Foschini charged consumers a club fee on credit agreements.
“The club fee charged by Foschini is reflected in consumers’ credit agreements,” the NCR said in a statement on Tuesday. “The charging of a club fee on credit agreements is not permitted by the National Credit Act.”
“The National Credit Act allows consumers to be given a quotation which sets out the cost of credit before signing credit agreements,” said the NCR’s Jacqueline Peters. “Consumers should request this quotation from their credit providers so that they can properly check the cost of credit that is being offered.”
The NCR wants the tribunal to order Foschini to refund the affected consumers the club fees charged.
It also wants it to order Foschini to conduct an independent audit into its loan book to determine the number of consumers to be refunded.
Furthermore, it wants the tribunal to interdict Foschini from charging consumers a club fee on credit agreements and impose an appropriate administrative fine on Foschini.
The NCR referred Mr Price to the tribunal for a similar breach in June. In May, the tribunal ruled against Edcon on the same matter. “The NCR will continue to conduct industry-wide investigations on the cost of credit to root out illegal charges and fees that consumers are charged,” it said.
Foschini to oppose commission, says it misinterpreted credit act
Foschini believes the referral is based on an incorrect interpretation and will oppose the commission, it said in a statement on Tuesday.
"TFG’s Club products are optional magazine subscriptions with insurance and other benefits, which can be subscribed to at application stage, or later via telemarketing and other marketing channels," it said. "Consumers can cancel their subscription at any stage and without penalty."
Regarding the misinterpretation of the credit act, Foschini said the law does not limit which products retailers may sell to its customers on their credit accounts.
"This was also recently confirmed by the NCT in a similar case against Lewis stores," it said. "The referral is also similar to the referrals regarding Club 'fees' against Edcon and Mr Price."
"The company will oppose FRG’s referral to the NCT, as it does not agree with the view held by the NCR for the reasons stated above, amongst others."
"The company also obtained the opinions of senior counsel, which was to the effect that the NCR’s position is untenable as it appears that the NCR has no rational basis for the relief sought against FRG in these proceedings."Fin24.com
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