Bloomberg reports that a unit of retailer Pepkor has been sued by the national credit regulator for selling unemployment and disability insurance to pensioners on welfare who would never be able to claim those benefits.
In a high court case against JDG Trading, which sells furniture and offers financial services, the company has been accused of taking advantage of some of SA’s poorest and least financially literate people. JDG “is selling insurance that certain consumers, pensioners and disabled persons do not need, cannot claim benefits for, and yet pay for. There appears to be a lack of compliance with the duty to explain this to pensioners, particularly to those illiterate pensioners,” the regulator claimed in court documents. A date for the case to be heard is yet to be set. JDG sells the insurance as a mandatory requirement for customers who wish to buy goods from its stores on credit. The cover enables the company to be repaid in the event of the shopper’s death, unemployment or disability. In its own court papers, JDG said that the “bundled” nature of the credit insurance made the policies cheaper on average for clients, some of whom were employed. The company accused the regulator of being “paternalistic” for assuming that pensioners did not understand what they were purchasing.
- Read the full original of the report in the above regard by Antony Sguazzin at BusinessLive
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