Lewis threatening letter to businessman fighting for the rights of his gardener

28 Jan 2016

The Onne Vegter versus Lewis Stores affair is getting hotter after the controversial furniture retailing group was reported to have sent a letter to Vegter accusing him of libellous behaviour and threatening legal action.

This is after Vegter took on Lewis on social media for attempting to overcharge his gardener in a washing machine purchasing credit transaction. Vegter alleged that Lewis would have charged his gardener a total of R18 000 for a washing machine priced at R6 000. His protest on social media went viral.

Latest reports say Lewis has written the following hot letter to Vegter:

 Dear Mr Vegter 

We refer to your email of 20 January 2016 and to our initial reply of 21 January 2016 in which we indicated that we would respond with further details in response to your concerns by today. 

Turning first to the serious allegation, as reported in the media, that Lewis Stores granted reckless credit to [your gardener], we wish to state unequivocally that this is completely false. Lewis conducted an assessment of [your gardener’s] ability to afford the proposed monthly instalment payable in compliance with regulatory requirements. 

The assessment included verifying his monthly income by having sight of three recent bank statements (which showed that he had more than one source of income), confirming his monthly expenditure and other debt obligations, and confirming his credit worthiness and repayment history with the credit bureaus. In fact, when conducting the affordability assessment, we applied a higher expense amount than the one declared by [your gardener]. 

The credit assessment, having been undertaken in accordance with statutory requirements, revealed that [he] could comfortably afford to purchase the goods on credit.  

In addition, [he] was interviewed by the store manager, in his home language (Afrikaans), during which the details of the proposed credit agreement (also in Afrikaans) and the total cost of credit were explained to him. Importantly, the separate components of the total cost of credit were explained to him, including the fact that the extended warranty and delivery service offered by the company are not compulsory. 

Likewise, he was informed that although credit insurance was required, he was not obliged to take up the credit insurance offered by the company and could instead provide his own insurance policy. These facts are also clearly advertised to customers in our advertising brochures and in our in-store advertising and information boards. Therefore, [your gardener] was aware of the financial and other details relating to his purchase, and confirmed his understanding of the risks and costs of the transaction to the manager. 

As far as your statements regarding the lay-out and content of our credit agreements are concerned, and in particular that we “clearly [hid]” the total amount of the contract “between a bunch of other boxes”, implying a deliberate attempt by our company to mislead [your gardener], we reject them as being completely untrue. Our contracts comply with the requirements of the National Credit Act and regulations and in particular, with Form 20, which prescribes the lay-out of the financial information that must be presented to the customer.  

It is noteworthy that you have recorded in your email of 20 January 2016 that you do not know whether a court would rule that the granting of credit to [your gardener] would constitute reckless lending. Yet you have made statements to the media that the transaction with [your gardener] constituted reckless lending.

 You have also alleged in your email to us of 20 January 2016 that many of the costs and charges included in the transaction are “disgustingly immoral”, suggesting also that they may be illegal. In this regard, the interest charges raised in respect of the transaction comply with the National Credit Act and its regulations. The National Credit Act permits credit providers to charge an initiation fee to cover the costs of concluding the credit transaction, the amount of which is prescribed in the regulations. Likewise, the amount charged by Lewis complies with the regulations.  As mentioned above, the delivery service offered by Lewis does not have to be accepted by a customer, but after having explained this to him, [your gardener] elected to use this service instead of providing an alternate delivery service himself. Similarly, there is no obligation on a customer purchasing an appliance to take up the offer of an extended warranty contract, but [he] elected to do so.  

With regards to the credit insurance costs, we point out that:  1. the requirement that goods purchased on credit be insured against damage or destruction by accident, fire or theft and that the customer takes out credit life cover while there is money owing by him to Lewis, is specifically provided for in the National Credit Act; and 

  1. there is no obligation on a customer to accept Lewis’ offer of such insurance coverage and the customer is at liberty to provide his own insurance coverage. In this case, [he] elected to accept the offer of insurance coverage provided by Lewis, the costs of which, and the coverage provided, were explained to him before he concluded the transaction.

The total cost of both credit life insurance and insurance against damage or destruction to property, over the 36 month period of this transaction, was R 3 785.76. 

This corresponds to a monthly charge of R105.16. With regard to the R57.00 charged per month, this is the monthly service fee for the 36 month period of the transaction, totalling R 2 052.00. It is therefore incorrect to say that the cost of insurance in respect of the transaction equals the cost of the merchandise purchased.  

One must understand that the longer the period of credit required by the customer, the greater the cost of credit will be. We have a number of different payment options available to our customers (namely, 12, 24, 30 or 36 month contracts). The shorter contracts obviously cost the customer less overall in interest and other credit costs but require a higher monthly instalment than the longer period contracts so as to enable the principal debt to be paid off in the shorter period. 

In regard to your demand that we cancel [his] contract, [your gardener] himself requested us to cancel his contract which we acceded to, despite such request falling outside the 5 working day cooling-off period in which customers may cancel their contracts. [He] was refunded his deposit on 22 January 2016. 

 Given all of the above, we record that your post on Facebook, which has now been widely circulated and reported in the media, is defamatory of the company, contains incorrect statements and has caused prejudice to Lewis. Indeed, the matter has been further aggravated by your similar engagement directly with the media.  

By choosing not to communicate with us before posting on Facebook and engaging with the media, you have elected to make these defamatory allegations without checking on the facts. Such conduct carries consequences and we are presently seeking advice in this regard.  

Yours faithfully, 



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