Lewis Group rejects bad practices claims

Image credit: http://www.lewisgroup.co.za/

The allegations, involving Lewis Stores and Monarch Insurance, relate to the sale of retrenchment cover to pensioners and self-employed consumers, and the sale of disability cover to pensioners under credit life insurance contracts.

In a detailed statement, the beleaguered retailer said the two divisions had filed answering affidavits to the Consumer Tribunal following the referral by National Credit regulator (NCR).

The regulator had argued that these alleged practices violated sections of the National Credit Act.

The NCR also asked the tribunal to order refunds to the customers affected by the sale of the insurance products, undertake an audit and impose an administrative fine of R10m on the company.

But Lewis contended on Friday that the sale of such policies were through human error and contradicted its own internal policies, according to its own investigation going back to 2007.

"Lewis is presently completing the calculations necessary to determine the amount of premiums plus interest that will need to be refunded to consumers," it said.

The allegations, which surfaced in July, have heavily weighed on the share price, which dropped 40% within the same period.

The stock was up 4.75% to R62.84 during early trade.