Cape Town - Cash-strapped South African consumers can expect many times the R67 million already promised to them in refunds if Summit Financial Partners' High Court fight against dodgy credit practices is successful.
Davis Woollam of Summit told African News Agency on Friday: “It is difficult to put a figure on it, but is is safe to say that it will be many times the R67 million already admitted to.”
Woollam was referring to Lewis Group's announcement on October 27 last year that it was refunding R44.1 million plus R23 million in interest to a group of customers who were mis-sold loss of employment insurance, including pensioners and self-employed people.
Woollam told ANA on Friday that this was just the tip of the iceberg.
He said: “Lewis makes nearly R1.25 billion per annum in insurance, delivery fees and extended warranties and we will be going back seven years for refunds where appropriate.”
Read also: Lewis refunds R67m for mis-sold insurance
In a statement at the time, it announced the refund Lewis said an internal investigation into transactions since 2007, undertaken after the National Credit Regulator notified the company of three such cases, had found “a minority of cases where loss of employment insurance policies were erroneously sold to pensioners and self-employed people”.
Loss of employment insurance cover is used to settle customers' outstanding balances on credit agreements in the event of them losing their jobs and, therefore, not relevant to people who are not employed.
Lewis blamed the errors on “human error at store level”.
Read also: Bleak outlook for Lewis’s sales growth
Woollam added: “Lewis's style all along has been to obfuscate the process and deny everything. On the R67 million they did not have a leg to stand on and came clean. They will eventually do the same with all the other charges.”
Summit Financial Partners has instituted High Court proceedings against Lewis Group and, if successful, would seek a class action judgement against the company for refunds.
Woollam said: “High Court papers were served on Lewis earlier this week and we are confident that we have a very strong legal team to back our case.
“The issues being challenged include compulsory delivery charges for credit sales, even if the person takes the item with them, extended warranty charges and what Summit describes as “unreasonable and illegal credit life insurance”.
Johan Enslin, Lewis Group chief executive, said Lewis had received the summons “which Summit Financial Partners have been threatening to pursue since August 2015”.
He added: “The company will be defending the action and has instructed its attorneys accordingly, but will not be commenting on the merits of the allegations at this stage.”
A successful case would open the way for action against others. Summit has always said the questionable practices are not isolated to Lewis.
Woollam notes: “I think that there has been some shift in behaviour from retailers but not nearly enough, and in any event this still leaves the millions of consumers who have been ripped off in the past and need to be compensated.”
AFRICAN NEWS AGENCY