June 5, 2017 / 4:12 PM / 4 months ago

S.Africa's Lewis says watchdog finds no wrongdoing on club fees

JOHANNESBURG, June 5 (Reuters) - South Africa’s consumer tribunal has cleared Lewis Group of breaching credit rules with the fees it charges customers, the retailer said on Monday, avoiding a fine that could have totalled up to 10 percent of its annual sales.

The nation’s credit regulator last year referred Lewis to the National Consumer Tribunal for allegedly contravening credit rules when charging customers for warranties and club membership fees that entitle them to special deals.

“In its judgment the (tribunal) found that the club fees charged by Lewis do not form part of the cost of credit of any credit agreement between Lewis and its customers,” Lewis said in a statement.

The tribunal also ruled the National Credit Act allowed Lewis to include the cost of an extended warranty in its credit agreements, the retailer said.

Shares in Lewis jumped 4 percent to 35 rand on the news.

The regulator last week also referred clothing retailer Mr Price to the tribunal for charging consumers a “club fee” on credit agreements.

Lewis, which sells furniture mostly to lower income groups on in-store credit, reported a drop in full-year profit last month as weak economic growth gnaws at disposable income in Africa’s most advanced economy. (Reporting by TJ Strydom; Editing by Mark Potter)

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