TFG next to be nailed for charging unlawful club fees
The National Credit Regulator (NCR) has referred The Foschini Group (TFG) to the National Consumer Tribunal for charging club fees on customer credit accounts.
This marks the third major retailer targeted by the NCR for the practice, after both Mr Price and Edcon were also taken to task for charging club fees.
The charging of a club fee on credit agreements is not permitted by the National Credit Act.
“The National Credit Act allows consumers to be given a quotation which sets out the cost of credit before signing credit agreements. Consumers should request this quotation from their credit providers so that they can properly check the cost of credit that is being offered,” the NCR said.
If found guilty by the Consumer Tribunal, TFG and Mr Price could be ordered to refund customers.
The NCR is calling for an audit into the books of these companies to determine exactly how much should be paid, and the groups could also face a fine.
Edcon was the first company to fall into the NCR’s cross hairs over the club fee issue, in May.
Speaking at the company’s results presentation in the same month, Edcon CEO Bernie Brookes said that he was confident the ruling would be overturned, adding that the NCR did not find that the club fees themselves are unlawful, only their attachment to the credit product.
In Edcon’s case, the club fee had been part of credit contracts for 10 years. The group said it had no plans to refund customers.
According to the NCR, club programmes and the fees attached should be opt-in services, explained to and agreed to by customers. Including them without this explicit consent is illegal it said.
Read: Edcon nailed for unlawful ‘club fee’ on credit products
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