Johannesburg - Foschini Retail Group, a wholly-owned subsidiary of TFG (The Foschini Group), on Tuesday was referred to the National Consumer Tribunal for allegedly being in breach of the National Credit Act for selling its club magazine subscriptions to consumers.
TFG said National Credit Regulator considered the selling the club magazine subscriptions to be “charging” a “fee” that is not permitted by the National Credit Act.
In its defence, TFG said its club products were optional magazine subscriptions with insurance and other benefits which can be subscribed to at application stage, or later via telemarketing and other marketing channels.
TFG said consumers can cancel their subscription at any stage and without penalty.
"The company is of the view that Foschini Retail Group’s referral is based on an incorrect interpretation of the applicable legislation, as the National Credit Act does not limit which products retailers may sell to its customers on their credit accounts," the company said in a statement.
"This was also recently confirmed by the National Consumer Tribunal in a similar case against Lewis Stores. The referral is also similar to the referrals regarding Club “fees” against Edcon and Mr Price."
Last month, the National Credit Regulator referred clothing retailer Mr Price to the Tribunal for the similar case, alleging that the group was in breach of the National Credit Act as a result of charging consumers a club fee on credit agreements.
Also last month, the Tribunal favoured of furniture group, Lewis Stores, dismissing an application by the regulator against Lewis in relation to the charging of club fees and extended warranties to customers.
TFG said it will oppose Foschini Retail Group’s referral to the Tribunal, as it does not agree with the view held by the regulator's for the reasons.
"The company also obtained the opinions of senior counsel, which was to the effect that the national credit regulator’s position is untenable as it appears that the national credit regulator has no rational basis for the relief sought against Foschini Retail Group in these proceedings," TFG said..