Cape Town - Lewis Group [JSE:LEW] announced this week it will be launching a specialised call centre to enhance compliance, transparency and oversight of its in-store sales and credit application process.
According to Lewis CEO Johan Enslin, this measure will be on top of what he describes as in-store procedures which include "a comprehensive affordability assessment and an interview with the manager during which all components of the contract are explained, including what services and fees are optional, and the total cost of credit".
The call will be between the customer and the call centre agent without any intervention from the store manager or store staff.
Even though more than 50% of Lewis' business is with existing customers, all customers will go through this process. Only once the call centre agent has completed the review with the customer will the transaction be approved by the call centre.
The group wants to limit any potential misunderstandings of the costs, services and fees to be paid by the customer. After the completion of every credit sale application in-store the manager will now ensure that the customer immediately speaks to a call centre agent.
Last month Lewis was in the spotlight for charging a 60-year-old gardener from George three times the ticket price for a washing machine after service charges and interest were added. The purchase price for the R5 999 washing machine, which was sold on credit over 36 months, amounted to R17 955.
Lewis denied any allegations of reckless lending, saying “the facts of the case simply do not support the accusation that the transaction between the customer and Lewis amounts to the grant of reckless credit in terms of section 81(2)(a)(i) of the National Credit Act".
In October last year Lewis also agreed to refund R44.1m to a group of its customers for the cost of loss of employment insurance mistakenly sold to them, together with R23m in interest accrued on this amount. Enslin said at the time that the refund follows an extensive internal investigation by Lewis, which was triggered by the National Credit Regular (NCR) bringing to the company’s attention three such instances.
Fin24 reported in July 2015 that a mystery shopping experience by Summit Financial Wellbeing, a company which fights for consumer rights and lobbies for change in the financial services industry, uncovered major breaches of the National Credit Act (NCA) by Lewis Group.
The new call centre will be launched in April 2016 and will operate independently from the national customer care call centre. It will be housed at the group’s head office and employ about 50 consultants.
According to Enslin, the call centre agent will, in discussion with the customer, establish that the store manager conducted an interview to explain the contract, with particular emphasis on the costs, and the client’s risks and obligations under the contract.
“The agent will also ensure that the customer understands that the following services - if selected on the contract - are optional: insurance; delivery, maintenance contracts, Masterguard and Club membership,” said Enslin.
The employment status of the customer and the insurance options selected will also be checked to ensure that the appropriate insurance option was sold, while the actual amounts charged for initiation fees, service fees, delivery fees, maintenance contracts, Masterguard and insurance will be explained again.
“In addition, the total cost of credit, monthly instalment, interest amount, interest rate and the credit multiple will be highlighted and reconfirmed and the customer will be asked to again confirm that they can afford the monthly instalment,” he explained.
Customers will also be reminded that they will receive a signed copy of the contract before they leave the store and that they have a five day cooling off period in which time they can change their mind and the contract can be cancelled without the customer incurring any penalties. Customers will be invited to ask questions at any time during the call and again specifically asked if they have any questions at the end of the call.
"In the past financial year, the group invested more than R21m in staff training and this new call centre is the next step in our commitment to customer service and compliance.”