NCT say Lewis Broke The Law

Lewis Stores guilty of Ignoring the National Credit Act                               

The National Credit Regulator (NCR) is in charge of making sure that everyone in the credit industry behave themselves and stick to the National Credit Act (NCA). They also investigate complaints against different parties in the industry and then if they feel there is an issue refer that matter to the relevant authority (eg. the police or the National Consumer Tribunal [also called the NCT]).

Though the NCR has raided and pursued matters against many smaller credit providers they have only really had minimal success in such matters when it comes to the largest credit providers (like the big banks). One of the highest profile cases they had where they investigated and then referred matters to the NCT was in regard to African Bank. Here the results were …underwhelming and have often been called into question even at a parliamentary level.

NCR Success With Pursuing Smaller Credit Providers.

Raids along with the SAPS have resulted in many arrests and a lot of relief to consumers who have had their bank cards, ID Books and Pension Cards taken from them illegally.

Lewis Stores Outed In The Media

Recently retail credit provider Lewis got exposed for some incorrect practices in the public media. This spurred the NCR to also investigate and they found several breaches of the National Credit Act. They then followed the correct procedure and referred the credit provider to the National Consumer Tribunal. They referred Lewis Stores along with their in house insurance provider – Monarch Insurance Company Ltd to the NCT in 2015. As usual it seemed that nothing more would happen other than Lewis Stores share prices taking a serious knock.

During the months that followed, Lewis Stores took several positive steps to try and address any concerns that the public, investors and the NCR might have. Time went by. More time past but nothing more was heard until this month. After all this time the NCT finally managed to reduce their backlog of cases enough to deal with this serious matter. The NCT heard the NCR’s official allegations that Lewis sold loss of employment insurance cover to both pensioners as well as self employed customers as part of their standard credit insurance. The NCR also revealed that Lewis Stores had also sold disability cover (in case a person is disabled and can’t carry on working) as part of their credit insurance to pensioners. Since pensioners can never have these things happen to them and could never actually claim the insurance was useless and this portion of the monthly insurance cost was of no benefit to the consumer. Basically Lewis were taking premiums that could never be collected on.

‘Lewis sold loss of employment insurance cover to both pensioners as well as self employed customers as part of their standard credit insurance’

The NCT heard the case and have ruled that Lewis Stores acted unreasonably by offering or making pensioners or their unemployed consumers loss of employment insurance and that it was not right that Lewis Stores had insisted that pensioners had to have disability insurance and have ruled that Lewis have broken the requirements of the NCA. The NCT have now issued an interdict against Lewis Stores to stop them selling these types of consumers this type of insurance any more and have now, in a massive step, ordered that an independent audit be conducted into every single credit agreement between every client and Lewis Stores since back in 2007 when the National Credit Act came into force. Once the results of the audit are in and any and all pensioners and self employed people who were paying these insurance premiums are identified then Lewis are to refund every cent to them.

 NCR To Push For Fine

The NCR correctly say that this a great victory (both for the consumers as well as the NCR’s reputation and profile in government) and say that they will now be going back to the NCT to ask for a nice big fine to punish Lewis on top of the consumer repayments and the negative effect this announcement will have on share values. the fine asked for will be in the Millions of Rands.