Media Release July 2015

            

The National Credit Regulator (NCR) has announced that it has referred Lewis Stores Ltd (Lewis Stores) and Monarch Insurance Company Ltd (Monarch) to the National Consumer Tribunal (Tribunal). The referral follows an investigation by the NCR which revealed that Lewis Stores and Monarch have:-

  • Sold loss of employment cover as part of credit insurance to pensioners and self-employed consumers. The loss of employment cover sold is meant to settle the pensioners and self-employed consumers’ outstanding balances under their credit agreements with Lewis Stores in the event of their retrenchment or redundancy from employment; and
  • Sold disability cover as part of credit insurance to pensioners. The disability cover sold is meant to settle the pensioners’ outstanding balances under their credit agreements with Lewis Stores in the event they become disabled to continue with their occupation.  

The basis of the NCR’s referral is that the sale of loss of employment cover to pensioners and self-employed consumers is unreasonable and imposes an unreasonable cost to such consumers because they are not employed and cannot claim benefits under this cover. The same applies to the sale of occupational disability cover to pensioners where they no longer have an occupation. 

“Pensioners and self-employed consumers are not employed and cannot be retrenched or become redundant from employment. They should not be offered loss of employment cover as part of credit insurance”, says Lesiba Mashapa, Company Secretary at the National Credit Regulator. “This is the first case of mis-selling of credit insurance in South Africa which the NCR has referred to the Tribunal to obtain redress for the pensioners”, Mashapa says. 

 

The NCR has requested the Tribunal to:

  • order refunds to the pensioners and self-employed consumers;
  • order an audit to be conducted; and
  • impose an administrative fine on Lewis Stores. 

 

Ends


Issued by: 

Lebogang Selibi

National Credit Regulator

Tel: (011) 554 – 2722

Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 

Website: www.ncr.org.za 

 

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