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Monday May 22, 2017

Hope for consumers as 'vacation club' industry called to account

It's been a long time coming: the timeshare industry is finally getting a proper look-in, with the National Consumer Commission (NCC) announcing this week that a public inquiry into the multibillion-rand "vacation ownership" industry will be held.

Since writing my first consumer column for the Independent Group in September 2015, I've received hundreds of complaints from desperate readers who said

  • they were duped into signing contracts (often into perpetuity);
  • that bookings at suitable times or preferred resorts were never available;
  • their points were worthless;
  • levies exorbitant;
  • and, if they tried to be released from the contracts, they were made to jump through such hoops it was an impossible task.

    Here's a sample of complaints:

  • "I have been trying to cancel my timeshare contract over some time and the company keeps telling me they are waiting for their review committee to review my contract, and that is a lengthy period.

  • "I have sent them all the documents they requested, which made me feel so naked as they requested every little thing about my finances and personal information.

  • "I can no longer afford this and would like it cancelled as soon as possible. The contract was signed by my parents, pensioners who didn't know what they were getting into. I took over the contract from them as they weren't able to cancel it and it became a burden for them.

  • "Neither I, nor my parents, have ever used their services."

  • "Several years ago, my wife and I got invited to a presentation for winning a 'random holiday' that we entered in the mall. To cut a long story short, money gets taken out of our account monthly for a product or service we've never used.

  • "The one and only time we did try to use it, to get 'cheaper flight tickets', they could not assist us.

  • "We tried to get out of it a few years ago, and cancelled the debit order, but were then threatened with legal action. We are desperate. We have sleepless nights about this BS."

  • "I don't know why it took tme so long to figure this out: it's a scam.

  • "In December 2016, my fiancée and I came across this 'amazing investment opportunity'.

  • "We saw an advert for a resort after spending a weekend there. We contacted the resort and they sent an agent to our house to assist us in explaining the investment options. We were sold. We signed the contract on the same day.

    "A few days later, my gut told me I had made a huge mistake. The agent told me we couldn't get out of it. We're currently paying R6 282 a month for this. The securing deposit was R20 070. We badly need assistance to get out of this contract as we can't afford it. It literally takes all our disposable income and now we must rely on credit cards.

  • "I honestly didn't mind making these sacrifices but, the more I read about timeshare, the more I regret buying into it. We're planning on extending our family soon and could use the money but it has become clear to me that we won't be able to afford a baby."

    National Consumer Commissioner Ebrahim Mohamed didn't hold back his disdain for the industry on Thursday either, when he announced a new public inquiry into the industry.

    "The National Consumer Commission has always held the view that complaints from timeshare consumers are valid and warranted.

    "We adopted this view based on our assessment of individual complaints over time - thousands of them, may I add - which have been lodged against holiday clubs and their value chain roleplayers over the past nearly two decades, since I joined the former Office of Consumer Protection," he told media at a briefing in Pretoria.

    "Myriads of allegations have been levelled against roleplayers of the… industry, and these are serious allegations, some of which fly in the face of the provisions of the Consumer Protection Act...

    "It's disgusting, in my view, that captains of this industry can turn a blind eye to the relentless pain and suffering of consumers for such a long time."

    That it has been: two years ago, the NCC attempted - and failed - to lodge an application with the National Consumer Tribunal after its probe into three major holiday clubs. It says it withdrew because of technical "defects"- the Vacation Ownership Association (Voasa) says it's because the commission was ill-prepared.

    Mohamed explained on Thursday: "We were legally challenged by these clubs."

    Now, the NCC has appointed a three-member panel to lead the inquiry. The panel will include three attorneys: Diane Terblanche, executive chairperson of the National Consumer Tribunal; Aubrey Ngcobo, a property law specialist; and Zandile Mpungose, a contract management specialist.

    The panel will be working with the NCC's technical task team in conducting the inquiry over the next six months across the country, by engaging with consumers, roleplayers, regulators and others.

    "Once completed, the panel will submit a comprehensive report to me which I will assess and, together with my team, make a determination on how to take the process forward. This could include a variety of recommendations to the Minister of Trade and Industry for certain legislative reforms."

    Voasa has come out strongly against the announcement.

    In a statement, it said that, while it continues to offer its "full support" and had met last month with the deputy commissioner to discuss its role and participation, it was "dismayed" by the statement that the industry has turned a blind eye to the plight of consumers.

    "We would like to place on record that, in 2008, Voasa representatives met with the NCC, then called the Unfair Business Practices Committee, on numerous occasions to propose amendments to the legislation in order to assist consumers. However, despite these meetings and proposals, no progress was made to amend the legislation.

    "Furthermore, in 2014 Voasa cautioned the NCC that the investigation into three major holiday clubs was being handled incorrectly and would ultimately lead to a waste of the consumer's time and taxpayers' money.

    "During July 2015, Voasa submitted an amended Code of Conduct for the industry to the NCC for review and approval.

    "This Code of Conduct addressed various issues as raised in the aforesaid investigation. To date, the NCC has not acknowledged nor commented on this document.

    "We believe every effort has been made by Voasa and its industry captains to remedying (sic) any challenges faced by consumers and the vacation ownership industry," said Voasa spokesperson Alex Bosch.

    The association also disputes that there have been "thousands" of complaints, as "no such record has been produced to support this"; however, having spoken to consumer journalists at other media houses, complaints are indeed rife, not taking into account those sent directly to the NCC.

    Bosch believes a fair number of complaints received by Voasa emanate from travel clubs not registered with the association, and warned against doing business with these companies.

    He further encouraged consumers who need assistance in resolving any issues to first try to resolve the issue with the holiday club. If that fails, they can contract the Consumer Goods and Services Ombudsman, who has Voasa's support, or visit www.voasa.co.za

    Ask Georgie

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