The club fee Edcon charges its credit customers is unlawful, the National Consumer Tribunal has ruled.
In addition, charging the fee was in contravention of the National Credit Act (NCA), the tribunal found.
An investigation by the National Credit Regulator (NCR) revealed that Edcon has charged consumers a club fee on credit agreements. “It is now settled that the charging of a club fee on credit agreements is not permitted by the NCA," Jacqueline Peters, Manager: Investigations and Enforcement at the NCR said.
The NCA is against other fees or charges or costs to be included in the credit agreement or credit agreement documents, irrespective of the nature of the charge, fee or cost.
“This judgement provides clarity to the retailers that they should observe the closed list of fees and charges provided for in the NCA. Consumers are urged to request the quotation from their credit providers so that they can properly check the cost of credit that is being offered”, Peters said.
According to statement by the NCR, they were yet to approach Edcon to request an independent audit of their loan book in order to establish the number of consumers to be refunded, as well as the total amount to be refunded from 2007 to date.
A date for the hearing will be set by the tribunal to hear arguments on how much Edcon should be fined.
A spokesman for Edcon promised to provide a response to the ruling as soon as he could.