Johannesburg - Lewis Group on Tuesday announced that its operating subsidiary, Lewis Stores, was being taken to the National Consumer Tribunal for alleged breaches of the National Credit Act (NCA) and may be issued with a hefty fine if found guilty.
Lewis said the referral related to two alleged contraventions in how it dealt with its customers going back nearly 10 years.
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The first charge relates to costs charged by Lewis Stores under certain maintenance agreements concluded with its customers since 2007.
The Tribunal will look at how Lewis’s maintenance agreements were provided with extended warranty cover, in addition to the cover available to customers in terms of supplier and manufacturer warranties for the same period.
The second charge relates to certain club membership fees, or “club fees”, charged by Lewis Stores to its customers since 2007.
The National Credit Regulator (NCR) alleges that the maintenance costs and club fees were charged to customers in contravention of the NCA and requested the Tribunal to order Lewis Stores to repay the maintenance costs and club fees to customers.
The NCR further requested that the Tribunal restrain Lewis Stores from charging maintenance costs and club fees to customers in an unlawful manner in the future. The NCR also sought certain ancillary relief, including the imposition of an administrative fine of 10 percent of the annual turnover of Lewis Stores.
But Lewis Stores maintains the allegations were without merit.
“Having considered the allegations contained in the referral along with Lewis’s external legal counsel, Lewis believes that the allegations are without merit. Accordingly, Lewis has instructed its legal representatives to oppose the referral on its behalf,” Lewis said in a statement.
This is not the first time that Lewis had been taken to the Consumer Tribunal.
Last year, the NCR alleged that Lewis Stores and Monarch Insurance had contravened the NCA by selling similar policies to customers they knew could not benefit.
Since these consumers were not entitled to benefits provided under the policies, the regulator argued, Lewis and Monarch had sold such cover with the intent to defraud the consumers and referred the complaint to the National Consumer Tribunal.
Lewis Group last month completed the acquisition of a portfolio of 57 Ellerines and Beares stores in four southern African countries, expanding its store presence outside of South Africa to 120.
ANA