Timeshare inquiry told of tricks and traps

26 July 2017

Consumers locked into contracts "for life", unable to sell timeshare points or give them away to escape spiralling levy costs, and others who alleged exploitation by unscrupulous salesmen, presented their cases to the National Consumer Commission in Durban yesterday.

The NCC is conducting a two-day public inquiry as part of a national inquiry in a bid to solve problems that have plagued the industry for decades.

Deputy consumer commissioner Thezi Mabuza said the inquiry was aimed at "unearthing challenges so the missteps of the vacation ownership industry can be corrected".

"We are here to gather, collate, study, analyse and research all the information available for the panel to produce a report to correct the challenges so we can come to a more just dispensation for consumers," Mabuza said.

Mabuza said the commission had received "several thousand" complaints ranging from the cost of levies and fees to the unavailability of accommodation and problems with cancelling contracts.

Most consumers yesterday complained about being permanently locked into the agreements, which some salesmen had peddled as an investment to be "passed on" to their children in their estate.

Instead, consumers said they had ended up with a burden of escalating and unaffordable levies with dwindling holiday benefits.

Marque Pretorius, a member of Victory Over Disability, presented the case of a mentally disabled couple who he said had been sold timeshare points, allegedly under a credit agreement, after a salesman had repeatedly denied during his presentation that he was selling timeshare. He said the couple had been sold points that would accumulate to 2 800 points in three years but they would never be able to take a holiday as 3 200 was the minimum points needed.

Pretorius alleged that, contrary to the National Credit Act, the company had not completed an affordability assessment. The husband was a labourer and his wife was on a state disability grant.

"When a person with a certain disability presents themselves and they are on a pension, one has to ask if it is right in terms of selling luxuries like timeshare. We are not saying people with disabilities shouldn't be able to buy timeshare if they can afford it, but reasonable care should be taken," Pretorius said. He said they had tried in vain to cancel the contract, which now cost around R640 a month.

Duncan Austin bought into a vacation club on a 20-year contract and said he paid for 10 years only to have the firm terminate his membership recently when he objected to a special levy, following a more than 50% annual levy increase to R2 990. He said the special levy of R2 000 on an estimated 4 000 members came to millions of rand.

"They are taking money that doesn't belong to them, and now they've taken away our timeshare, which we've paid for 10 years," he said.

Eban Combrink said he had owned timeshare in Bela Bela since the 1980s but had been unable to cancel his contract when he hit hard times after his wife needed expensive medical attention.

He said the annual levies were R10 000 a year and he was now R38 000 in arrears and constantly harassed by debt collectors.

Club Leisure Group general manager Peter Snyman addressed the public as an industry representative, although the complaints raised yesterday did not concern his company.

Snyman said his firm had stopped selling perpetual contracts, increased the cooling-off period to 30 days and allowed consumers to cancel timeshare agreements on certain terms.

He said it was international practice for points to expire after three years as companies could only bank accommodation for a certain period.

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