The retail group reacts to allegations that it unlawfully charges consumers a club fee on credit agreements.
Cape Town – The Foschini Group (TFG) would be opposing its referral by the National Credit Regulator (NCR) to the National Consumer Tribunal following allegations that the company unlawfully charges consumers a club fee on credit agreements.
“TFG is of the view that its referral is incorrect, as the National Credit Act does not limit which products retailers may sell to its customers on their credit accounts,” spokesperson Daniela Dalle-Vedove said.
“TFG will be opposing its referral to the NCT.”
The group said its products, which includes magazine subscriptions with insurances and other benefits, are optional.
“These subscriptions can be cancelled by customers at any time, without penalty,” said Dalle-Vedove.
On Wednesday, the NCR said the club fee charged on credit agreements was not permitted by the National Credit Act.
NCR Manager at the Investigations and Enforcement Department, Jacqueline Peters said: “The NCR is asking the tribunal to impose an administrative fine on TFG for adding club fees to its interest bills‚ and to interdict the retail group from including club fees in future credit agreements.”
Peters said among the NRC’s recommendations was that TFG conduct an independent audit of all its consumers to determine the number of consumers to be refunded and to refund those consumers.
It also recommended an interdict be served to the clothing chain to prevent it from further charging consumers a club fee on credit agreements.
The regulator had already referred several retailers to the tribunal for charging consumers a club fee on credit agreements.
The referral comes just months after the tribunal ruled the monthly club fees charged by the Edcon Group – which operates the Edgars, Jet and CNA stores – were unlawful. Edcon said it would appeal the decision.
“NCR will continue to conduct industry-wide investigations on the cost of credit to root out illegal charges and fees that consumers are charged,” said Peters.