Edcon's club fee is unlawful and in contravention of the National Credit Act

On Tuesday, The National Consumer Tribunal handed down a judgment against Edcon, saying that the club fee charged by Edcon to its credit customers is unlawful and in contravention of the National Credit Act (NCA).

Jacqueline Peters, Manager, Investigation and Enforcement at the National Credit Regulator says Edcon has said that the consumer is always given the option to opt in or out of the club fee.

The argument that was before the tribunal is whether or not you can include a fee that's not prescribed by the National Credit Act under an agreement. The act is very prescriptive on what can form part of the credit agreement.

Jacqueline Peters, Manager, Investigation & Enforcement at the National Credit Regulator

Any other fee outside of that should not be forming part of that agreement. So you cannot sell an ad on of a club and include it into a credit agreement.

Jacqueline Peters, Manager, Investigation & Enforcement at the National Credit Regulator

Peters says the NCR is pleased with the judgment because it will ensure the industry will comply with what the act prescribes. Peters also adds that the regulator is calling for an audit to have a look at what refunds need to be put forward to consumers.

We have always put forward that there must be an audit and that's certainly what we are going to be asking Edcon to do.

Jacqueline Peters, Manager, Investigation & Enforcement at the National Credit Regulator

A hearing date will be set by the Tribunal to hear argument on the quantum of the administrative fine.

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