File picture: Simphiwe Mbokazi
Johannesburg - The National Consumer Tribunal (NCT) on Monday handed down judgement in favour of Lewis Stores, dismissing an application by the National Credit Regulator (NCR) against Lewis in relation to the charging of club fees and extended warranties to customers.

This comes after the NCR referred Lewis to the Tribunal in April last year, alleging that the group was in breach of the National Credit Act as a result of charging consumers a club fee on credit agreements since 2007. The NCR alleged that the maintenance costs and club fees were charged to customers in contravention of the credit act 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 restrains Lewis Stores from charging maintenance costs and club fees to customers in an unlawful manner in the future and seeks certain ancillary relief, including the imposition of an administrative fine of 10 percent of the annual turnover of Lewis Stores. In its judgement on Monday, the NCT found that the club fees charged by Lewis do not form part of the cost of credit of any credit agreement between Lewis and its customers.

The NCT also ruled that the National Credit Act allows Lewis to include the cost of an extended warranty in its credit agreements and does not prescribe the terms and conditions of such extended warranty offered by Lewis to its customers. Johan Enslin, chief executive of the Lewis Group, welcomed the NCT's ruling saying that it confirmed the group's commitment to responsible credit practices and regulatory compliance.

"The National Credit Act does not prevent credit providers from offering the services of a club to its customers, provided these services are not part of the 'cost of credit'," Enslin said. "Therefore, the offering of club fees and extended warranties by Lewis did not constitute prohibited conduct."