Edcon's ability to pay an administrative fee and to refund consumers after the National Consumer Tribunal found it had unlawfully charged club fees to its credit customers has come under question owing to Edcon's grim fortunes.
Damon Buss, a fund manager at Electus Fund Managers, said the ruling by the tribunal came as profits for the country’s largest retailer had declined and it was trying to claw back lost market share.
Last week, the National Consumer Tribunal ruled that the club fee charged by Edcon to consumers buying op skuld is unlawful. And charging the fee contravened the National Credit Act (NCA), said the tribunal.
An investigation by the National Credit Regulator (NCR) found Edcon charged consumers a club fee on credit agreements. This means consumers could end up being refunded — and nogal from 2007 to date.
Buss says considering that Edcon’s 2016 financial year trading profit was R987 million and their operational performance has deteriorated in the first quarter of 2017 and that its ability to pay the refund and administrative penalty is questionable,” Buss said.
He said Edcon’s club fees for the period had totalled R4.7 billion and repaying customers threatens Edcon’s plans to recover market share.
Last week Edcon said it was studying the ruling and plans to appeal, it said.
“It is important to note that this recent judgment relates to the merits of the issue, and does not deal with any sanction, which will only be determined at a later date,” a spokesperson said.
Most Edcon consumers told the Daily Voice they were shocked hear how their pockets were being rukked.
Denzil Wessels, 26, vannie Paarl is an Edgars account holder and says he is ashamed of the “scam”.
“It’s a terrible thing to learn about. But why did it take so long to realise this problem?
“They should reimburse their customers for all the money lost.”
Alaine Adonis, 37, from Langebaan has been paying “extra money most months to keep my account balanced, but I’m always owing every month.
“I was wondering why there is this battle to keep up with the debt.”
And Marvouneen Solomons, 44, from Worcester cancelled her Edgars account because she “couldn’t cope as it became expensive”.
“They need to pay back the money they stole from their clients.”