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JOHANNESBURG, July 4 (Reuters) - South African clothing retailer The Foschini Group (TFG) will oppose allegations by the country's credit regulator that it broke credit rules by selling club memberships to customers, the company said on Tuesday.
The National Credit Regulator has taken a hard line on retailers which charge customers for warranties and fees for club memberships that entitle them to special deals. The watchdog has referred Mr Price, Edcon and Lewis to an oversight body in the past few months.
"Foschini Retail Group, a wholly-owned subsidiary of the company, has been referred to the National Consumer Tribunal for allegedly being in breach of the National Credit Act," TFG said, It said it would oppose the referral to the watchdog.
The law does not limit which products retailers may sell to its customers on their credit accounts, TFG said in a statement.
"TFG's Club products are optional magazine subscriptions with insurance and other benefits which can be subscribed to at application stage, or later via telemarketing and other marketing channels," the company said.
TFG has a members club with a monthly subscription and this fee can be added to customers' credit accounts.
The consumer tribunal last month cleared Lewis of breaching credit rules. (Reporting by TJ Strydom. Editing by Jane Merriman)