Following the R 67.1 million refund that Lewis paid out last year, after the wrongful sale of loss of employment insurance to customers not eligible, they have come under fire again. This time for allegedly overcharging a George gardener for a washing machine, resulting in him paying almost double the price.
However, Lewis has come out denying the allegation, along with denying that there was no reckless lending involved in this incident.
The washing machine
According to reports, the 60-odd-year-old man, with ‘limited literacy’ bought the machine at his local Lewis branch. The incident came under spotlight when the man’s employer, Onne Vegter, discovered that he was being charged R17 955 on a R5 999 washing machine, and took to posting his outrage on Facebook.
The cost of the insurance alone, was almost equal to the price of the machine itself, according to a report. In addition, Vegter noted that the insurance clearly showed a double charge of R2 052 and R3 785.76 for the same insurance plan. This apparently after the gardener had said that he did not want any insurance.
Upon delivery, the owner of the machine had reportedly still not received a copy of his contract.
In a letter addressed to the Lewis stores Customer Service department, written on behalf of the gardener, Vegter puts the injustice down to ‘reckless lending’ eligible for reporting to the National Credit Regulators (NCR) and the Ombudsman.
The other charges listed in Vegter’s facebook post include: “R975 contract fee; R750 delivery fee (other shops in George charge around R250); maintenance agreement R1 311; interest at a whopping 23% pa, far more than double the prime rate; customer protection insurance R2 052; protection insurance for clients R3 785 (again! Sounds like exactly the same thing); Grand total R17 955 for a washing machine!"
Lewis responds
Lewis has in turn responded by stating that all costs involved were charged correctly and according to the National Credit Act (NCA), “and that all processes required by the Act and its related regulations were followed.”
“The company denies any allegations of reckless lending, as an affordability assessment in terms of company policy and as required by the National Credit Act was conducted. The customer provided proof of income with his three most recent bank statements, which is on file with the company. The assessment clearly indicates that the customer could afford the goods,” stated Johan Enslin, CEO of Lewis Group.
According to the store, the customer was taken through all the charges by store manager.
However, Vegter stated that the man was ‘told by the store salesman it would cost him R498 per month for 36 months, and told where he must sign.’
Lewis further highlighted that although credit life and damage and destruction to property insurances are a requirement, customers are not obliged to make use of the cover provided by Lewis and can provide their own policy.
Furthermore, Enslin noted: “The customer was not obliged to use the delivery services offered by Lewis, but chose to do so. Similarly, there is no requirement for a customer to conclude an extended warranty contract, but the customer elected to do so.”
Lewis further denies that the customer was charged twice for the same insurance policy, as the total of both credit life and damage and destruction insurance to property, “in respect of this 36 month contract was an amount of R3 785.76, corresponding to a monthly charge of R105.16. The total service fees due to Lewis Stores in terms of this contract amounted to R2 052.00, corresponding to a monthly service charge of R57.00. The levying of these monthly service charges is in accordance with the National Credit Act and regulations.”
This break-down therefore disproving that the cost of insurance in light of this contract is not equal to the cost of the machine.
The customer has requested to cancel the contract, and Lewis is reportedly willing to follow through on this.
“Lewis will collect the washing machine from the customer’s home and refund the deposit paid,” concluded Enslin.