The National Credit Regulator (NCR) is calling on the National Consumer Tribunal to fine JDG Trading and JDG Micro Life for selling retrenchment and disability cover to pensioners and to interdict them from continuing with “unlawful conduct”, the regulator announced this week.
The NCR’s referral of a case against the companies follows an investigation by the regulator. The investigation revealed that companies in the JD Group have been selling retrenchment and occupational disability cover to pensioners and to consumers who receive grants from the state, such as old-age, disability, foster-care and child-support grants. The investigation also found that the companies charged most of these consumers a club fee.
The retailers in the JD Group include Russells, Joshua Doore, Morkels, Bradlows, Electric Express, HifiCorp, Pride n Price and Barnetts.
According to a media release by the regulator, the sale of retrenchment and occupational disability cover to pensioners and consumers who receive social grants is unreasonable and imposes an unreasonable cost on such consumers, because they, as non-employees, cannot claim benefits under these types of cover.
“The NCR also found that, in some instances, consumers receiving disability grants from the government on account of their permanent disability were sold occupational disability cover at a time when they were already certified permanently disabled.”
In addition to a fine and an interdict, the NCR is also asking the tribunal to order JDG Trading and JDG Micro Life to refund the affected consumers the retrenchment and occupational disability premiums and club fees charged from 2007 to date.
The regulator also wants the tribunal to order that an audit be conducted into JDG Trading.
The NCR says it will continue to conduct industry-wide investigations into credit insurance practices to protect vulnerable consumers, such as pensioners and the disabled.