Bilqees Salie is planning to close her account at Edgars after the chain implemented a service fee, even on the six-month interest-free one which she has. The Kenwyn woman said she asked Edgars why they didn’t tell her and she was advised that the notice was added to her December 15 statement.
It said in small print: “Our credit agreement and the National Credit Act (NCA) allow for a service fee to be charged in respect of all credit agreements. From January 2016, we will charge a monthly service fee of R22.80 on accounts with a debit balance due to increased account keeping costs, where our credit agreement and the NCA allow therefore.”
“Are they allowed to do this?” Ms Salie asked. “Are they allowed to give a month’s notice and in the small print? Are they acting in accordance with the NCA? I would have assumed they should advise us in the subject line of the email. I spoke to some friends and family and many were unaware of the charge and others thought it did not apply to them as they have a six-month interest-free account. Some have already closed their Edgars accounts because of this charge. I would like Edgars to reverse these charges and I will gladly settle my account. If the NCA allows for this daylight robbery I want to know and close my account as soon as possible to avoid further charges,” said Ms Salie adding, “it was not the first time I’ve had a problem with Edgars.”
“Not too long ago I went to return an item and was advised that they would not credit my account, but instead give me a cash voucher. I asked why I was expected to pay Edgars for the item on my account and then be forced to spend the same amount in store with the cash voucher? I was then shown a huge sign in the store with amended terms and conditions. I told them this was not communicated to clients and that the sign was not there when I made my purchase. My account was credited and soon after that the signs disappeared from all stores,” she said.
An Edcon spokesperson, said: “Having taken into consideration the rising costs to provide unsecured credit to our customers, both Edcon and the credit provider, Absa have regrettably been compelled to amend our credit agreements to introduce a monthly service fee on our credit accounts. The NCA (Act No. 34 of 2005 Section 101(1)(c)) allows credit providers to charge monthly service fees of up to a maximum of R60. Although these fees were waived by Edcon in the past, it has unfortunately now become necessary to charge a small fee of R22.80, which is well below the prescribed maximum.
“Edcon has given our customers 30 days’ notice of the change to their existing credit agreement, which we started implementing from July 4, this year.”
Nthupang Magolego, senior legal advisor at the National Credit Regulator (NCR), said the NCA (Section 104) specifically states that a credit provider cannot unilaterally increase a service fee charged under a credit agreement. If Edgars did not charge a service fee at the inception of the credit agreement, they cannot just unilaterally give notice to charge or increase it, from R0 to R22.80.
“But,” said Edcon, “In line with the NCA, we did not unilaterally introduce service fees on pre-existing credit agreements. All credit agreements concluded from October 2012 already provide for the charging of a service fee, which the credit provider could decide to waive in full or in part at its discretion. In respect of credit agreements concluded before October 2012, clients were notified and requested to agree to an amendment of the credit agreements to include a service fee.”
Ms Salie said she will be closing her account as she kept it open in the hopes of being refunded.
But if Edcon didn’t charge a service fee then Ms Salie may get a refund. However, I wouldn’t hold my breath.