Cape Town - The National Credit Act (NCA) does not prevent credit providers from offering the services of a club to consumers, provided these services are not part of the “cost of credit”.
This was part of a Gauteng High Court judgment in an appeal by the National Credit Regulator (NCR) in a case against retailer Lewis Group [JSE:LEW]. The NCR initiated a case with the National Credit Tribunal (NCT) in 2016 regarding issues of club fees and extended warranties.
The court 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.
Lewis said in a note to shareholders issued on Wednesday that the NCA provides that the retailer may include the cost of an extended warranty as part of its fees and charges in its credit agreements with consumers and does not prescribe the terms and conditions of the extended warranty offered by Lewis to its customers.
The NCR's appeal was dismissed with costs.
By late morning trade on Wednesday the share price of Lewis was down 1.17% at R46.40.
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