What is this about?

Discovery Health billed individual members and groups of less than 35 members an extra fee called the ancillary fee. They did not charge large groups this fee. This was illegal. They stopped this practice in 2005 after the issue was highlighted. However stopping a practice does not mean Discovery Health should get away with it. They have illegally charged their members close to R114 000 000 per year.

Are we sure about this?

Yes. We have taken senior legal counsel’s opinion about the conduct of Discovery Health and we were informed that they have most certainly contravened the applicable laws.

What does the law say?

In terms of section 29(n) of the Medical Schemes Act no medical scheme may charge different rates to different people based on arbitrary conditions. They may only vary one’s contribution rate based on income and number of dependants. No other reason for variation is allowed, such as the size of the group. Section 21A reads:
(2) The admission of a person as a member or dependant of a medical scheme may not be made directly or indirectly conditional upon that person purchasing or participating in any product, benefit or service provided by a person other than the medical scheme in terms of its rules.
(3) It is an offence to market, advertise or in any other way promote a medical scheme in a manner likely to create the impression that membership of such medical scheme is conditional upon an applicant purchasing or participating in any product, benefit or service provided by a person other than the medical scheme in terms of its rules.
We are confident that Discovery Health did create such an impression as is contemplated in section 21(A)(3) of the act. We have gathered sufficient evidence to prove this. They did not inform members that this so called “service” was optional. They made it look as if the ancillary service fee was compulsory. Even their own staff was under the impression that the fee was compulsory. After Discovery was made aware of the illegality of this practice they persisted with it for a considerable period of time.

How can you join the action to get your money back?

Wynsam Wealth is going to sue Discovery Health on behalf of members who were overcharged. You can sign a “power of attorney” for them to act on your behalf to get your money back. More than 244 000 people are affected. Complete it and return it to us via fax on 033 3443047 or email to courtcase@wynsam.co.za

The power of attorney can be found here.

Will you be liable for any costs?

No, the costs of the legal application will be financed by Wynsam Wealth.

Has Anyone Succeeded at This?

Yes, a case was brought against Discovery and they paid out! (Case 57775/04 Randburg). Discovery admitted no liability, however, and therefore we are forced to sue them to get your money back. Discovery has not made any attempt to repay the ancillary service fees without being sued. For obvious reasons we will demand repayment of all interested parties’ monies before we proceed with legal action. For a copy of the settlement Discovery paid out and the court records thereof click here. For a copy of the papers filed during the case click here.

Must I be a Wynsam Wealth Client or Sign up as one?

You don’t have to be an existing client or a future one. Any member of Discovery Health can join this action.

Fax: 088 033 3458366

Email: info@wynsam.co.za

Physical Address:
Ground Floor Mahogany Court
1 George Macfarlane Lane
Redlands Estate
Pietermaritzburg
3201

Postal Address:
Box 21820
Mayor’s Walk
3208

View the article on the Financial 24 website here.

View the article on the Moneyweb website here.

Cape Argus 22 March 2007 click here

Daily News 22 March 2007 click here

Pretoria News 22 March 2007 click here

Personal Finance Article 17 March 2007 click here

IOL Artcile 22 March 2007 click here    

Financial 24 Artcile 16 March 2007 click here

Moneyweb Article 15 March 2007 click here  

To listen to our radio interview on Highveld on Friday 23 March click here.
(Warning! This file may take a while to open.)

To listen to our radio interview on SAFM about EXTRA FEES on Friday 23 March click here.
(Warning! This file is 2.12MB and may take a while to open.)

Discovery Court Settlement: Download Here…

View the court papers filed during the case: Download Here…

If you are a Broker: Download Here…