NCR fines Shoprite R1m for reckless lending

The National Consumer Tribunal (Tribunal) says it has found Shoprite guilty of reckless lending and fined it a whopping R1 million for its transgressions.                                             

It has also has also ordered Shoprite to appoint a debt counsellor at its own costs, in order to assess if the consumers that were mentioned in the referral are over-indebted.

“This judgment comes after an investigation by the National Credit Regulator (NCR) revealed Shoprite entered into credit agreements with consumers without conducting a reasonable and objective assessment of the consumers’ ability to afford the loans”, says Nomsa Motshegare, CEO at the NCR. 

“Some of the conduct of Shoprite that was found to be in contravention of the National Credit Act (NCA) was that Shoprite, when assessing whether a consumer could afford a loan or not, took into account unverified income of another person, such as a spouse or a life partner”, says Motshegare.

Shoprite Group said the Tribunal found that one of its subsidiaries extended credit to some of its customers to buy goods from its OK Furniture stores too easily. “This matter relates to credit agreements concluded in June 2013 and June 2014 with nine consumers from amongst thousands. In all these cases the credit extended was settled in full by the customers concerned. ​ 

“The National Credit Act is a complex piece of legislation, as acknowledged by the Tribunal. The credit granting offices adhere to strict measures and are satisfied that the current process serves the best interests of its customers and is in compliance with legislation,” said the company in a statement.   

“The NCR believes that this judgment by the Tribunal reaffirms the undesirability of reckless lending in our society,” concluded Motshegare.

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