Regulator accuses Shoprite Insurance of selling worthless cover

Shoprite Investments Limited and Shoprite Insurance Company Limited have been accused of selling unnecessary cover and granting credit recklessly.

The National Credit Regulator (NCR) announced that it had referred both of them to the National Consumer Tribunal for: selling retrenchment and occupational disability covers to pensioners and consumers receiving government’s old-age grants; and selling retrenchment cover to a consumer with a waiting period of six months on a six-months’ loan.

Shoprite Investments Limited has been cited on its own as it is said to have “granted credit recklessly to consumers.”

“The sale of retrenchment and occupational disability covers to pensioners and consumers receiving government social grants is unreasonable and imposes an unreasonable cost to such consumers because they cannot claim benefits under these covers”‚ Jacqueline Boucher‚ of the NCR’s acting investigations and enforcement manager‚ said.

“Credit providers are required by law to explain the terms and conditions of insurance policies to consumers at the point of sale. Consumers should not be sold insurance that is not suitable and appropriate for their needs.”

The remedial actions requested by the NCR states that Shoprite refund the affected consumers the retrenchment and occupational disability premiums; An audit be conducted into Shoprite; The reckless loans be written off; and Shoprite pay an administrative fine.

“The NCR will continue to conduct industry-wide investigations on credit insurance practices to protect vulnerable consumers such as pensioners and the disabled‚” a statement said.

The Shoprite case follows a similarly trumpeted announcement of action against furniture retailer Lewis and Monarch Insurance earlier this year.

Source: Timeslive