Government Fines Shoprite for Reckless Lending

September 8, 2017

By Dipo Olowookere

Top South African retail store, Shoprite, has been slapped with a fine of about $77,500 (R1million) by the National Consumer Tribunal (NCT).

The firm was found guilty of reckless lending by the agency, which launched an investigation concerning loans to consumers.

The credit regulator said Shoprite went into credit agreements with consumers without first conducting a reasonable and objective assessment of their ability to afford the loans.

According to the National Credit Regulator (NCR) chief, Nomsa Motshegare, “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.”

Motshegare, who gave the ruling on Wednesday, further said, “The NCR believes that this judgment by the tribunal reaffirms the undesirability of reckless lending in our society.”

The agency also directed Shoprite to appoint a debt counsellor at its own costs to assess if the consumers mentioned in the referral are over-indebted.

Recall that in 2015, the NCR referred Shoprite to the National Consumer Tribunal.

It was gathered that the firm’s business arms, Shoprite Investments and Shoprite Insurance Company, sold retrenchment and occupational disability cover to pensioners and consumers receiving government grants.

But the tribunal found out that Shoprite committed prohibited conduct under the NCA, and imposed a fine of R1 million against the company.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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