National Credit Regulator v Edcon Holdings Limited (NCT/35378/2015/140(1)) [2017] ZANCT 58 (24 April 2017)

National Credit Regulator v Edcon Holdings Limited (NCT/35378/2015/140(1)) [2017] ZANCT 58 (24 April 2017)

The Tribunal found that the National Credit Act provides a closed list of fees and charges that may be included in a credit agreement. The club or membership fee charged by Edcon does not fall within any of the permitted categories under section 101 of the NCA. The fact that the fee is presented as an option, can be cancelled, or is not amortized does not render it permissible under the Act. The inclusion of the club fee in the credit agreement or credit facility application process, irrespective of its characterization as a product purchase, constitutes a contravention of section 101. The Tribunal held that the Respondent's conduct amounts to repeated prohibited conduct, as the fee is...

Citation
[2017] ZANCT 58
Parties
Applicant: National Credit Regulator; Respondent: Edcon Holdings Limited
Court
National Consumer Tribunal
Jurisdiction
South Africa
Judgment Date
24 April 2017
Case Number
NCT/35378/2015/140(1)
Procedural Posture
Review Application / Merits Determination; Sanctions to Follow
Outcome
The Respondent is found to have engaged in repeated prohibited conduct by including a club fee in credit agreements contrary to the National Credit Act.
Judges
J Simpson, FK Manamela, H Devraj
Legal Topics
National Credit Act, Cost of Credit, Prohibited Fees, Credit Agreement Compliance, Consumer Protection
Banking and Finance Commercial and Corporate National Credit Act Cost of Credit Prohibited Fees Credit Agreement Compliance Consumer Protection

Case Brief

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Parties

National Credit Regulator

Applicant

Edcon Holdings Limited

Respondent

Procedural Posture

Review Application / Merits Determination; Sanctions to Follow

Legal Issues

  1. 1 Whether the club or membership fee charged by Edcon constitutes a cost of credit under the National Credit Act.
  2. 2 Whether the inclusion of the club fee in credit agreements is prohibited by section 101 of the NCA.
  3. 3 Whether Edcon's conduct amounts to repeated prohibited conduct under the NCA.

Ratio Decidendi

The Tribunal found that the National Credit Act provides a closed list of fees and charges that may be included in a credit agreement. The club or membership fee charged by Edcon does not fall within any of the permitted categories under section 101 of the NCA. The fact that the fee is presented as an option, can be cancelled, or is not amortized does not render it permissible under the Act. The inclusion of the club fee in the credit agreement or credit facility application process, irrespective of its characterization as a product purchase, constitutes a contravention of section 101. The Tribunal held that the Respondent's conduct amounts to repeated prohibited conduct, as the fee is...

Court Disposition

The Respondent is found to have engaged in repeated prohibited conduct by including a club fee in credit agreements contrary to the National Credit Act.

Orders

  • The Respondent is found to have engaged in repeated prohibited conduct.
  • There is no order as to costs.