LEWIS GROUP REFUNDS R67.1 MILLION TO INSURANCE CUSTOMERS
Lewis Group is refunding R44.1 million to a group of its customers for the cost of loss of employment insurance mistakenly sold to them, together with R23 million in interest accrued on this amount.
After an extensive internal investigation of all insurance transactions conducted since 2007, the group identified a minority of cases where loss of employment insurance policies were erroneously sold to pensioners and self-employed people. The investigation was undertaken after the National Credit Regulator notified the company of three cases of such sales of insurance.
These erroneous sales were the result of human error at store level, and contrary to company policy which prohibits the sale of these insurance policies to pensioners and self-employed people.
These cases represent less than 1% of all insurance premiums earned by the group over the eight-year period since 2007. Loss of employment insurance cover is used to settle customers’ outstanding balances on their credit agreements in the event of their retrenchment or redundancy.
Pensioners and self-employed people cannot be retrenched, and are therefore not eligible for this cover. Management is currently contacting customers to arrange for the repayment of these amounts. About 30% of those affected are existing Lewis customers and the refunds have been credited to their accounts.