National Credit Regulator refers Lewis Stores (Pty) Ltd and Monarch Insurance Company Ltd to the National Consumer Tribunal for breach of the National Credit Act
9 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.