A Lewis Stores outlet. Picture: FREDDY MAVUNDA/FINANCIAL MAIL
A Lewis Stores outlet. Picture: FREDDY MAVUNDA/FINANCIAL MAIL

Lewis Stores will have to answer to long-standing allegations that it contravened the National Credit Act by charging first-time borrowers compulsory delivery fees – even to debtors who walked out of the retailer’s stores carrying newly bought cell phones and laptops.

The National Consumer Tribunal decided late last week that it will hear a complaint against Lewis brought by Summit Financial Partners, a financial wellness company known for taking on credit providers for their misdeeds.

In granting Summit permission to refer its complaint directly to the tribunal, the NCT’s Professor Tanya Woker said there was no dispute regarding the fact that Lewis had charged compulsory delivery fees to first-time consumers of credit – there was only a dispute regarding how the NCA should be interpreted.

Summit has alleged that the levying of compulsory delivery fees is a contravention of one section of the act and constitutes prohibited conduct while Lewis has said the practice is governed by another section of the act.

Summit applied to the tribunal for permission to self-refer its complaint after being issued with a notice of non-referral from the National Credit Regulator in November. A notice of non-referral is issued if a complaint appears to be vexatious or frivolous, or does not allege any facts which, if true, constitute grounds for a remedy under the NCA.

In opposing Summit’s application to the tribunal, Lewis said it had poor prospects of success since the "the NCR has found the claims to be baseless". Lewis said the NCR was correct when it found that Summit did not allege any facts which, if true, would constitute grounds for a remedy under the Act.

Although the NCR did not oppose Summit’s application to take its complaint directly to the tribunal, it said Summit lacked the locus standi to refer the complaint to the tribunal because it has failed to join or duly represent all consumers with a direct interest in the mater.

But in granting Summit permission to refer its complaint, Prof Woker said the NCA provides that any person may submit a complaint concerning an alleged contravention of the act to the regulator, and when the regulator issues a notice of non-referral in response to a complaint, the complainant may refer the matter directly to the tribunal, with the leave of the tribunal.

Summit submitted to the NCR its complaint against Lewis in September 2016.

Clark Gardner, the chief executive officer of Summit, said he was relieved by the tribunal’s decision to hear the complaint but said the conduct of the NCR was "noteworthy".

The regulator took more than a year to investigate a "comprehensive" complaint from Summit which included transcripts of mystery shopping exercises, confirmation from directors of Lewis of the compulsory nature of delivery fees levied on first-time debtors, regardless of goods bought, distance travelled to make delivery and that delivery was charged even when consumers walked out the store with the purchased goods. "Despite all this, the NCR still took 14 months to investigate the complaint and concluded that Lewis did not breach the NCA," Gardner said.

In response, the NCR’s company secretary Lesiba Mashapa said there was no undue delay on the regulator’s part in investigating the complaint. "The initial complaint was amended months after it was lodged and the investigation had to be continued, taking into account the additional information." The NCR was empowered by the NCA to decline to refer a complaint to the tribunal if it reasonably believed a referral was not justified, Mashapa said.