National Credit Regulator v Mr Price Group Limited (NCT/81672/2017/140(1)) [2018] ZANCT 140 (10 December 2018)

National Credit Regulator v Mr Price Group Limited (NCT/81672/2017/140(1)) [2018] ZANCT 140 (10 December 2018)

The Tribunal found that the club fee offered by Mr Price Group Limited to Milady's customers is an optional charge for a separate club membership service, not a mandatory cost of credit. Documentary evidence showed that consumers could elect whether or not to join the club, and the fee could be cancelled at any time without affecting the underlying credit agreement. The Act provides a closed list of permissible charges under section 101, but the club fee does not fall within these categories. However, because the fee is not required as a condition of the credit agreement and is not imposed on all credit consumers, it does not constitute a prohibited cost of credit under the Act. The...

Citation
[2018] ZANCT 140
Parties
Applicant: National Credit Regulator; Respondent: Mr Price Group Limited
Court
National Consumer Tribunal
Jurisdiction
South Africa
Judgment Date
10 December 2018
Case Number
NCT/81672/2017/140(1)
Procedural Posture
Review Application / Merits Hearing; Application for Declaratory Relief Under S140(1) NCA
Outcome
Application dismissed; no contravention of the National Credit Act established.
Judges
P A Beck, FK Manamela, A Potwana
Legal Topics
National Credit Act, Prohibited Fees, Cost of Credit, Club Membership Fees
Banking and Finance Commercial and Corporate National Credit Act Prohibited Fees Cost of Credit Club Membership Fees

Case Brief

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Parties

National Credit Regulator

Applicant

Mr Price Group Limited

Respondent

Procedural Posture

Review Application / Merits Hearing; Application for Declaratory Relief Under S140(1) NCA

Legal Issues

  1. 1 Whether the club fee charged by Mr Price Group Limited constitutes prohibited conduct under the National Credit Act.
  2. 2 Whether the club fee forms part of the cost of credit as defined by the Act.
  3. 3 Whether the inclusion of the club fee in credit agreements is unlawful under sections 90, 100, 101, and 102 of the Act.

Ratio Decidendi

The Tribunal found that the club fee offered by Mr Price Group Limited to Milady's customers is an optional charge for a separate club membership service, not a mandatory cost of credit. Documentary evidence showed that consumers could elect whether or not to join the club, and the fee could be cancelled at any time without affecting the underlying credit agreement. The Act provides a closed list of permissible charges under section 101, but the club fee does not fall within these categories. However, because the fee is not required as a condition of the credit agreement and is not imposed on all credit consumers, it does not constitute a prohibited cost of credit under the Act. The...

Court Disposition

Application dismissed; no contravention of the National Credit Act established.

Orders

  • The Applicant's case is dismissed.
  • There is no order as to costs.