Class action planned to address time-share ‘abuses’ against consumers
CAPE TOWN – A local attorney is planning a class action against time-share suppliers to demand the full return of clients’ payments to them because the contracts are illegal and don’t comply with the Consumer Protection Act, she says.
Trudie Broekmann has already achieved a significant breakthrough by legally terminating the contracts of 48 clients with the time-share suppliers Quality Vacation Club, African Club Innovations (ACI), Multi Destination Club, Dream Vacations, Lifestyle Vacation Club and Flexi Club.
She plans to launch a class action early in 2018 to demand repayment in full for each of her clients since the start of their agreements with timeshare-suppliers.
Her legal input has resolved the dilemma of 48 of her clients who have been trying to cancel contracts with the time-share providers.
But these suppliers don’t always cancel the debit orders of their ex-customers as they are legally bound to do.
The contracts that she has studied are all unlawful and don’t comply with statutory requirements – specifically the Consumer Protection Act and the Property Time-sharing Control Act, Broekmann said.
Several disillusioned clients have tried in vain to cancel their contracts, before Broekmann offered a solution.
More than 50 % of her clients have never been able to successfully book a vacation, and the last time most of them could benefit from such a holiday was prior to 2011.
One of her clients has already paid R500 000.00 to ACI, without being able to enjoy a single holiday as was promised in the marketing.
Most of her other clients also have to fork out exorbitant amounts of up to R150 000 on levies annually.
Most of Broekmann’s clients were members of Quality Vacation Club and Flexi Holiday Club.
“The systems are structured in a way that appear to deliberately prevent you from obtaining a booking,” Broekmann remarked.
“The contracts are drafted in such a complicated way that very few consumers can understand them.”
“Many people assume that they are permanently bound by these contracts. That is not true if the time-share provider breaches the contract, or it’s unlawful in the first place.
“A total 48 time-share contracts have already been cancelled,” she said.
“Under section 68 of the Consumer Protection Act the supplier cannot discriminate against the consumer if he exercises his rights in terms of the law,” Broekmann said.
“However, my clients are finding that the suppliers are not cancelling the debit orders– as is required for a cancelled contract after I have cancelled the contract.”
Consequently, the consumers have to return to the bank every month to reverse the levy payments.
The suppliers also increase the levy amount marginally so that debit orders still go through.
The suppliers also contract debt collection agents to harass their former customers.
According to a 2011 study by Grant Thornton, there were 740 000 timeshare-owners in South Africa, and the industry raked in R3.5 billion annually.
The National Consumer Commission (NCC) recently conducted a series of public hearings across the country to hear complaints against the vacation timeshare industry. This may eventually result in better regulation of the industry, but that is cold comfort for disgruntled time-share owners.
The NCC commissioner Ebrahim Mohamed said the Department of Trade and Industry received several thousands of complaints from consumers in the last decade about the industry.
Objections by consumers at the public hearings ranged from deceptive marketing presentations, to unreasonable levies and a complex system which makes it almost impossible to access holiday destinations.
Statement issued by Fanie Heyns on behalf of Trudie Broekmann Attorneys.
Timeshare-clients speak out about ‘booking ordeals, black-list threats’
CAPE TOWN. – Think twice before you buy into time-share after an alluring presentation, warns the consumer protection attorney Trudie Broekmann.
And Anni Feely confirms its potential dangers.
For the past seven years the Johannesburg-based legal advisor and her husband have found it impossible to obtain any booking at a suitable resort (except one to which the couple had been repeatedly).
Only very recently was she able to cancel her contract with the time-share supplier after a protracted battle.
For 17 years Feely was a member of a vacation club before the contract was terminated through the intervention of Broekmann.
She and her husband paid R48 000 and they were also held liable for monthly levies.
The bookings were an ordeal. The booking system was often off-line, unavailable or they were told to lodge another application at the start of the next year.
That created the impression with them that the system had been set up in such a way that it made it impossible to secure a booking.
The marketing was deceptive, and was in breach of various clauses of the Consumer Protection Act. The contract was null and void in terms of the CPA as well as the Property Time-sharing Control Act, said Broekmann.
When Feely attempted to cancel in 2015, she was told that the contract operated in perpetuity and she received black-list threats.
After Broekmann intervened, Feely had to contact the bank manager to terminate the monthly debit order as QVC refused to do so.
Corné Erasmus, a Johannesburg-based business owner, took part in a lucky draw for a luxury vehicle in 2005.
But the competition turned out to be a marketing session of international time-share holiday resorts for which they had to pay R100 000.
There was no talk of levies, nor any cancellation clause offered.
Two years later, the attractive international resorts disappeared from the portfolio.
The offer sounded so good that when QVC offered them permanent membership they accepted.
But QVC never warned them that in terms of the contract they were bound “in perpetuity”, i.e. indefinitely, according to the supplier.
After two years, it was practically impossible to get bookings for any holidays.
When she attempted to terminate the contract, the supplier threw the “in perpetuity” clause at her.
Currently, she pays an annual levy of R144 000 without being able to access any time-share holiday.
She also received black-list threats if she would attempt to cancel the contract, she said.
His battle against the Vacation Group Club started about three years ago when the supplier announced a substantial annual increase of R1900, additional to the almost R4500 per year that he had been paying at that stage, said Terry Moran of Durban.
“Making bookings was really challenging. The increase of R1900 was extraordinary and I told them I want to cancel my contract and would no longer pay monthly levies.
“The past two years they have harassed and threatened me,” Moran said.
“They announce in their marketing sessions that you will receive free access to this romantic resort if you pay a once-off amount of R40 000, but if you study the fine print, you have to pay for everything.”
Press statement issued by Fanie Heyns on behalf of Trudie Broekmann Attorneys.
For an interview on The Money Show see http://www.702.co.za/articles/280685/timeshare-owner-you-may-soon-get-all-your-money-back