It’s easy to be wise after the event.
Many of those who lost out in the Hello Darlings travel agency debacle are now saying the red flags were there all along. They just didn’t notice or heed them.
But Abdul — that’s not his real name — wised up to what was potentially happening six weeks before the Hello Darlings owner “disappeared” last week without saying goodbye, leaving scores of people heavily out of pocket.
In late January Abdul sent me an email with “Potential Ponzi scheme” in the subject line. Sadly I didn’t see it at the time, which is not uncommon given the volume of email which pours into my inbox daily.
“This agency or person requires further investigation as there are a number of red flags,” he began.
“Whilst there are people who have gone on holidays or got their money back, it does appear there could potentially be a situation where money is being taken from Peter to pay Paul ...”
He appears to have been right, though by late January most of the victims would have already paid their money to Hello Darlings.
In a response purported to have been written by the CEO and shared on social media on Friday, she said she was “not in possession” of any money paid to her for travel.
“All the monies earned by the company were either paid out in refunds or travel bookings ...” she said.
By trying to offer “affordable travel” to those who could only “realise their travel dreams this way since the costs were so prohibitive”, she said, she either made a loss or broke even.
“We were always in deficit unless we advertised new trips to pay for current trips.
“While I understand that I ran this business poorly and suffered tremendous trade losses, I have not stolen anybody’s money. I am not on the run with millions.
“It may have been stupid business practices ... but the intention was never to collect anybody’s money and to leave or swindle anybody as is being speculated and reported.
SA’s Advertising Regulatory Board requires influencers to acknowledge paid-for campaigns by means of #AD, #advertisement or #sponsored 'to ensure consumers reasonably understand this to be paid advertising as opposed to an organic social media endorsement'.
“I do not have your money. I lost it in poor business dealings and for this I am sorry.
“There is no fraud here, only poor business sense, which is a lesson I will pay for for the rest of my life.”
When a business person suddenly makes themselves uncontactable and withdraws their social media presence when so many customers have paid huge sums of money for a service, wild speculation is inevitable.
She purportedly plans to declare insolvency, as she has no money left after paying more than R50m in the past few months to “well-known people”.
“My lawyers have advised me that they will ask all parties who have been refunded to pay back the money and a fair ... distribution will be made amongst all parties.”
That’s arguably an ambitious ask and no doubt cold comfort for those who’ve paid huge sums of money for absolutely nothing.
In the case of Abdul’s relatives, their loss is more than R200,000. They’d paid Hello Darlings for two family holidays, in Mauritius and the Maldives.
Many victims have laid fraud charges with the police in the past week.
The evening Abdul’s family did so at Johannesburg’s Parkview police station, they were told they were the seventh family to do so at that station that day.
Only a court can decide whether she’s guilty of a crime, but either way it’s unlikely to put any money back into the accounts of the victims.
I’m hoping this case will focus people’s minds on how not to invest in a major family holiday.
And why it’s a really bad idea to be swayed by influencers when there is so much at stake.
“We saw the lovely testimonials of the influencers, as well as the good prices,” said one victim when interviewed by Lester Kiewit on Cape Talk.
“We saw what a good time she gave those influencers ... who wouldn’t want to go on such a nice holiday and get treated so well?”
Influencers are paid, in cash, through freebies or both to post glowing accounts on their social media platforms. That’s why those posts are regarded as advertising.
And why SA’s Advertising Regulatory Board (ARB) requires influencers to acknowledge paid-for campaigns by means of #AD, #advertisement or #sponsored “to ensure consumers reasonably understand this to be paid advertising as opposed to an organic social media endorsement”.
ARB CEO Gail Schimmel said the onus is on brands to emphasise the rules to their influencers.
“An ethical brand should be insisting [its] influencers use the indicators and should be putting it in their contracts.”
Schimmel said while she doesn’t know whether Hello Darlings’s influencers used any of those disclosure hashtags, “I am guessing not, based purely on the general ignorance and non-compliance of many influencers”.
“Even though we don’t act against the influencer — only the company paying them — the decision can impact on their reputation. And reputation is their currency.”
Currency the influencers involved are now fighting very hard to protect.
So let’s look at those red flags, courtesy of Otto de Vries, CEO of the Association of Southern African Travel Agents (Asata).
1. No Asata logo. Asata members comply with a code of conduct and constitution that requires them to abide by the laws of the land and prove they are legitimate travel businesses that protect the interests of their customers.
2. “Too good to be true” prices. Always ask a reputable travel agent, tour operator or airline what the normal price for the holiday in question would be.
3. Paying by EFT: Safeguard yourself by paying with a credit card so your purchase is protected by “chargeback”.
“If you pay by EFT you will struggle to get your funds reimbursed if the supplier is found to have committed travel fraud,” De Vries said.
4. Unprofessional marketing. I’d say marketing solely by means of influencer posts is a big red flag.
5. Do they have a physical place of work? Ensure there is a landline in place and the company has a physical address.
6. Excuses, excuses. If you’re not getting your vouchers and air tickets timeously and your queries are continuously answered with excuses, that’s never a good sign.
Here’s the thing ... if you don’t know how professional companies in a particular industry operate; if you think there’s nothing wrong with paying tens of thousands of rand to an operator who conducts all her business via WhatsApp in sloppy, anything goes text speak, you’re opening yourself up to a very bad outcome sooner or later.
The time to do your thorough checks is before you pay your money, not afterwards.
CONTACT WENDY: E-mail: consumer@knowler.co.za; Twitter: @wendyknowler; Facebook: wendyknowlerconsumer
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