The National Credit Regulator v Lewis Stores (Pty) Ltd

The National Credit Regulator (NCR), following an investigation, alleged that Lewis Stores (Pty) Ltd, a national retailer selling goods on credit, had contravened several provisions of the National Credit Act 34 of 2005 (NCA). The allegations concerned two practices: (a) the charging of fees for optional extended warranty agreements in circumstances where some written warranty documents were incomplete or contained incorrect dates; and (b) the charging of monthly subscription fees for membership of the Lewis Family Club to consumers who had entered into credit agreements. The NCR contended that these practices constituted prohibited charges and unlawful conduct under ss 90, 91, 100, 101(1)(a) and 102(1) of the NCA. The National Consumer Tribunal dismissed the NCR’s application. An appeal to the Gauteng Division of the High Court was unsuccessful, and the NCR appealed further to the Supreme Court of Appeal with special leave.

The appeal was dismissed with costs, including the costs of two counsel.

The case clarifies the interpretation of ss 100–102 of the National Credit Act, particularly that the cost of extended warranties is permissible where authorised by s 102(1)(b) and where the true agreement between the parties is honoured. It confirms that optional, separately contracted products such as club memberships do not constitute a cost of credit merely because the consumer is also a credit customer. The judgment also provides important guidance on the evidentiary nature of written credit documents under the NCA and raises significant (though unresolved) questions about the jurisdiction of the National Consumer Tribunal versus courts in declaring contractual provisions unlawful.