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Sat May 27 11:58:37 SAST 2017

Consumer protectors probe in R3.5 billion a year timeshare industry

Wendy Knowler | 2017-05-18 16:20:54.0
National Consumer Commission (NCC) commissioner Ebrahim Mohamed.
Image by: Gallo Images / Alet Pretorius

National Consumer Commissioner Ebrahim Mohamed didn't hide his disgust at the conduct of major holiday clubs operating in South Africa when announcing a new public enquiry into the “timeshare” industry today.

National Consumer Commissioner Ebrahim Mohamed didn't hide his disgust at the conduct of major holiday clubs operating in South Africa when announcing a new public enquiry into the “timeshare” industry today.

“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‚” he told a briefing in Pretoria.

The industry now prefers the term “vacation ownership” to “timeshare”.

Consumers have alleged that:

  • they were duped at slick presentations into signing up for lifetime contracts that can never be cancelled;
  • companies overbook and over-sell accommodation;
  • annual levy increases are excessive and that they are threatened with litigation if they can’t afford to pay them;
  • they can’t secure bookings; and
  • they can’t give their points away‚ let alone sell them‚ because of the massive levy obligations that go with them.

“The most disturbing aspect of it all‚ I think‚ is that the vacation ownership industry has done little or nothing to correct itself‚ which is naturally what every industry should be doing when issues are raised with its roleplayers’ conduct‚ products or services‚” Mohamed said.

According to the Vacation Ownership Association of SA (VOASA)‚ it’s a R3‚5 billion per year industry‚ locally‚ with more than 200 resorts and 500‚000 “shared owners”.

In 2015 the National Consumer Commission (NCC) lodged an application with the National Consumer Tribunal following an investigation into major holiday clubs‚ including Univision‚ the holding company of Quality Vacation Club‚ and Club Leisure Group‚ which owns Flexi Club.

The cases were “withdrawn” by the NCC‚ according to Mohamed‚ because of “technical defects”.

“We were legally challenged by the clubs and we realised it would prove very costly for taxpayers to proceed…”

VOASA has expressed its “utter dismay” at Mahomed’s claim that the industry has turned a blind eye to consumers’ suffering.

“In 2008 VOASA representatives met with the then Unfair Business Practices Committee…to propose amendments to the legislation in order to assist consumers‚” said spokesman Alex Bosch.

Nothing became of those‚ he said‚ and in 2015 VOASA submitted an amended Code of Conduct for the industry to the National Consumer Commission for review and approval‚ but the NCC “has not acknowledged nor commented on this document”.

“We believe that every effort has been made by VOASA and its industry captains to remedy any challenges faced by consumers and the vacation ownership industry‚” Bosch said. “VOASA will continue to make itself available to engage with the enquiry panel and help wherever needed.”

Today's enquiry announcement is the NCC’s Take Two industry challenge‚ intended to “identify the root causes of the issues experienced by consumers‚ make findings on the facts and evidence presented and make recommendations on how to address the consumer issues highlighted in the complaints”.

A three member panel - all attorneys with combined experience in consumer protection‚ property law and contract management - will‚ with the NCC’s technical task team‚ spend six months gathering evidence by engaging with consumers who have filed complaints‚ as well as industry players‚ regulators‚ academics and courts.

At the end of that process‚ the panel is expected to recommend how the “gaps‚ inadequacies‚ misalignment and inefficiencies in the laws‚ regulations‚ policies and codes regulating the industry” can be addressed in order to better protect consumers.

- Wendy Knowler is 'In Your Corner' as TimesLIVE's consumer champion. You can contact her on email: consumer@knowler.co.za or via Twitter: @wendyknowler

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