FEES AND WARRANTIES
Regulator to appeal judgment on extended warranties and club fees sold by Lewis
The National Credit Regulator (NCR) is set to take its three-year-old battle against furniture group Lewis Stores to the Supreme Court of Appeal (SCA).
The SCA has granted the NCR leave to appeal the High Court in Pretoria’s judgment on extended warranties sold by Lewis, which sells mainly to lower-income groups through in-store credit facilities, and club fees charged by the retailer.
It said the fees and warranties were not a contravention of the National Credit Act.
In 2016 the NCR referred Lewis to the National Consumer Tribunal for contravening the act by charging consumers warranties for the furniture they purchased even when warranties were already provided by the manufacturers. The NCR also said Lewis’s customers were forced to pay club fees in contravention of the act.
In June 2017 the tribunal ruled in Lewis’s favour, finding that neither the warranties nor the fees contravened the act.
The tribunal found that the act allowed Lewis to include the cost of an extended warranty as part of its fees and charges even if warranties were provided by manufacturers. It also found that club fees charged by Lewis were not part of the cost of credit.
The NCR appealed this decision to the high court, which ruled in favour of Lewis in April and dismissed the matter with costs against the NCR.
On Wednesday Nomsa Motshegare, CEO of the NCR, said she looked forward to the matter being finally determined.
"The charging of unlawful fees on credit agreements is one of the most egregious breaches of the act," said Motshegare.
The NCR is also appealing to the SCA against a separate high court ruling on club fees charged by Edcon. The NCR has also lodged cases against TGF and Mr Price.
The tribunal has ruled that the act does not prevent credit providers from offering the services of a club to consumers provided the services were not part of the cost of credit.