The National Credit Regulator (NCR) says its investigation into Shoprite has revealed ‘reckless lending’ and the sale of insurance cover to consumers who do not qualify.
This includes retrenchment and occupational disability cover to pensioners and consumers receiving social grants.
Shoprite Investments and Shoprite Insurance Company Limited will now have to face a tribunal and a possible fine.
The regulator's Nthupang Magolego said the tribunal would adjudicate the matter and the NCR has requested that the retailer be fined up to 10% of their annual turnover from the preceding financial year.
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The initial concerns stemmed from what we thought was industry-wide activity, we've previously found that retailers are abusing credit agreements.— Nthupang Magolego,Senior Legal Advisor at the NCR
The NCR is of the view that Shoprite should not have sold retrenchment and occupational insurance to pensioners and those consumers who receive government grants.
NCR also wants the retailer to be audited to reimburse consumers and to write off the reckless loans.
This article first appeared on 702 : NCR finds Shoprite guilty of 'reckless lending' practices