We at TCA would like to update you following on from a previous post in September 2018. The long-awaited report into the Cape Town mis-selling of timeshare has finally been announced, the story has captured the timeshare headlines, recommendations have been introduced to include, new laws and regulators to deal with the industry.
Ebrahim Mohamed, National Consumer Commission commissioner said he had approved the report and accepted its recommendations. This is fantastic news for South Africa’s timeshare owners.
Trudie Broekmann, attorney and consumer law expert states, “the report presents a picture of an industry with apparently no regard for ethics or the interests of their clients. It indicates myriad contraventions of not only the Consumer Protection Act (CPA), but also the common law, Property Time-Sharing Control Act, the National Credit Act, the Competition Act, and the Companies Act”.
Thankfully the 135-page report goes in favor of the consumer, offering a long list of “insightful recommendations“, which need to be introduced by the NCC.
“Much will turn on whether the NCC finds the will, manpower, expertise, and incorruptibility to implement the recommendations aimed at it,” Broekmann continues.
“The report recommends that over the short term the NCC “prioritises and urgently engages the industry on a club-to-club basis” on all the commitments and concessions made by them in relation to complaints lodged against them at the public hearings held in November 2017 and February this year “.
This will hopefully ensure speedy recourse for consumers who currently have complaints lodged with the NCC, according to the report.
Grievances that involve urgent attention include, owners who wish to cancel their contracts, particularly where dubious selling practices were supposedly used to “hoodwink consumers into signing timeshare contracts” there was misleading and misrepresentation to consumers prior to them signing their contract, including underhand pressurised selling tactics, nondisclosure and no mention of the cooling-off period.
It is recommended in the report that the NCC join forces with the National Credit Regulator. It adds that since the industry had proposed a maximum occupancy of three years for timeshare agreements, any complaints regarding contracts which have been running for more than the three years should also be treated as a matter urgency.
In addition, the vulnerable and elderly should be handled “with a view to immediately and unconditionally releasing” them from their contracts.
“There is a wealth of provisions in the CPA to address many, if not most, of the problems consumers raised in connection with the timeshare industry,” the report says.
“It appears to the panel that the sheer volumes of complaints led to an asymmetry between the resources required to deal with them and the resources available within the NCC to effectively deal with these and complaints from other industries and sectors of the economy.”
A spokesperson for the NCC, said: “The NCC has already begun to give effect to the recommendations of the report and will intensify efforts when the office reopens on January 7.” adding that a “dedicated team” will work closely with the office of the consumer goods and services ombudsman” (CGSO).
The board also recommends that the NCC together with the CGSO, “develop and produce a detailed statement of practice outlining the types of behavior which should be regarded as pressure selling“. This should be combined into future regulations.
“In order to disincentive the industry from either using unethical selling methods or benefiting from them, the regulations should further provide for a stiff penalty for crossing the ethical line,” the report says.
The public hearings were held nationwide, the investigating panel collated the report based on the information received in connection to the countless accounts of abuse from consumers by the industry.
One claim received was from newlyweds who wish to remain anonymous;
“We were walking on the beach when we were approached by a man who told us we looked like ‘a great couple’,” says the husband.
Things went rapidly downhill from there. The couple was invited to take part in a ‘lucky draw’ and, guess what, yes, of course, they had won a prize. All they had to do to redeem their gift was to accompany the man to the main office where they were subjected to a pushy, aggressive sales pitch.
Blatantly lied to, both were informed that points were like “shares” in an investment that would keep growing and that the club would buy them back if they ever wanted to sell, without hesitation.
Before they knew it, they were in R15,000 of debt. After several days contemplating their purchase, the husband decided to cancel, however, he couldn’t find the agent who sold them the points.
The couple tried in vain to sell their points back to the club as well as on the open market, sadly to no avail. The whole scenario had a huge impact on their relationship as well as their financial circumstances. In 2014, after they stopped paying their fees the club threatened legal action, informing them that the only way to prevent this was to pay no less than R1,500 a month. Thankfully for them, an innocent call centre agent informed them that if they offered less the club would have to settle the account with a one-off fee. Obviously, the couple took this on board and offered the club R500 a month. Since this was not enough the club came up with a penalty fee. “It was a few thousand rand, but I accepted it. Getting rid of them was a relief,” says the husband.
During the eight years, they owned the timeshare, the couple got four weekends, two in hotels in Cape Town, a two-night stay at a campsite in Hartbeespoort, and a two-night stay at a hotel in the Strand. To add insult to injury, the stays were not free, this cost the couple several thousand pounds more in hidden costs.
We will continue to follow this story and share announcements once they released.
Posted on: January 7, 2019
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01253 804 318 or email: info@TimeshareConsumerAssociation.org.uk