Following an investigation by the NCR, both businesses were found to have sold retrenchment and occupational disability cover to pensioners and consumers who receive old age grants from the government, as well as selling retrenchment cover with a six month waiting period on a six month loan.
Shoprite Investments was also found to have recklessly granted credit to consumers.
Jacqueline Boucher, acting manager of investigation and enforcement at the NCR, noted: “The sale of retrenchment and occupational disability covers to pensioners and consumers receiving government social grants is unreasonable and imposes an unreasonable cost to such consumers because they cannot claim benefits under these covers.”
The NCR has requested that the Tribunal carry out the following:
- Order Shoprite to refund affected consumers the retrenchment and occupational disability premiums they paid.
- An audit into Shoprite and the various businesses be conducted.
- All reckless loans provided by the Shoprite businesses are written off.
- An administrative fine is imposed on Shoprite.
“Credit providers are required by law to explain the terms and conditions of insurance policies to consumers at the point of sale. Consumers should not be sold insurance that is not suitable and appropriate for their needs,” said Boucher.