Summit has revealed that it is taking furniture retailer, Lewis, to court. This follows a range of incidents which started with a secret shopper excursion carried out by Summit last year. Summit claimed its mystery shopper experience exposed Lewis for reckless lending, overcharging and charging for services that weren’t needed by clients buying goods through hire purchase loans.
This year Lewis again attracted negative publicity after a gardener came forward claiming that he had been overcharged by Lewis for a washing machine.
In a statement, Summit said: “Lewis has consistently proved that exploiting consumers is part of its modus operandi. That’s why Summit is taking Lewis to Court.”
Johan Enslin, CEO of Lewis Group, said: “Lewis Group has instructed its attorneys to defend the action brought against the company by Summit Financial Partners, and will not be commenting on the merits of the allegations at this stage.”
The case
Summit explained the lead up to the court case. “In July 2015, Summit’s mystery shopper discovered excessive, compulsory fees forming part of Lewis’ credit agreements. By October 2015, Lewis was forced to refund some of the wrongful fees to consumers and offered a partial apology. They attributed R44 million worth of wrongful insurance sold to “human error” by their staff, but we were far from convinced.
“In January and February 2016, Lewis once again made headlines due to their blatant, on-going exploitation of unsuspecting consumers. It’s clear that Lewis has little regard for its consumers and that exploitative fees are built into their business practices,” stated Summit.
Following the secret shopper carried out by Summit last year, the company has tried a number of channels to deal with the problems that appear to be issuing from Lewis. These include going to the media, laying complaints against Lewis with the National Consumer Regulator (NCR), and attending Lewis’ annual general meeting.
According to Summit, they have been building a case against Lewis since July 2015. The first High Court Summons against Lewis was filed in February 2016 in the Cape Town High Court.
“Our current High Court Summonses represent fifteen consumers with clear complaints against Lewis for unreasonable, mandatory fees charged on their credit agreements. All of these consumers were charged excessive, non-negotiable delivery fees. The average delivery fee charged by Lewis was R725 more than market-related delivery fees. In some cases, delivery fees were even charged on products like laptops that do not logically need to be delivered
“All of the consumers were also charged compulsory maintenance fees which are excessive when compared to the value offered. On average, these maintenance fees exceed market-related costs by a whopping R1,150. In some cases, maintenance plans were sold on products that already came with warranties that exceed the duration of the maintenance plan,” explained Summit.
Summit added: “Although Summit has obtained Power of Attorney from each of the consumers represented in these applications (and many more), Lewis has proved uncooperative. So far, they still refuse to provide copies of the consumers’ original credit agreements, even in cases where Summit has been appointed as the consumer’s debt counsellor and delivery of credit agreements by credit providers is statutorily required.”