By Matthew le Cordeur
Cape Town – The National Credit Regulator (NCR) on Tuesday referred Foschini to the National Consumer Tribunal 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.
Foschini's gearing already 65.3% prior to the R3bn Oz acquisition. And their cash cows of club fees & insurance are under threat from NCR.
— Karin Richards (@Richards_Karin) May 25, 2017
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.
Read also: Is credit club membership a stand-alone benefit? – Edcon in the dock
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.
Source: http://www.fin24.com/Companies/Retail/foschini-in-breach-of-credit-act-ncr-20170704
