In September 2020, a client approached us after finding himself in a difficult situation. He attended an introductory weekend at a luxury resort in Limpopo for what he thought was a Share Bock holiday scheme, with the intent to invest. A sales agent enticed him there, painting a picture of a lucrative investment opportunity with the potential for enormous rental income for any potential investor. Our client was initially sceptical and inquired whether this was a timeshare (in which he had no interest), which the sales agent vehemently denied. This sales agent went as far as to tell a personal story of his own success in renting out his units, to the tune of R1.2 million in annual rental income. Misrepresentation at its finest!
Months after signing the agreement (and thus far beyond the five-day cooling-off period provided to consumers under the National Credit Act), our client was contacted by the company in question and soon realized he had been duped into purchasing what was in effect timeshare, which he was not permitted to rent out personally, as he had intended. When our client’s complaints about the misrepresentation fell on deaf ears, he attempted to cancel the agreement, only to be informed that he would be subject to a hefty cancellation penalty in excess of R40 000!
Our client exhausted all options for resolving the issue on his own: he complained to the Consumer Goods and Service Ombud (CGSO), who forwarded his complaint to the Vacation Ownership Association of South Africa (VOASA), which simply returned the complaint to the Timeshare company! Months passed and nothing came of his complaints, necessitating legal action. Our team quickly realized that the pre-sale misrepresentation and contract terms violated several key pieces of legislation, including the Consumer Protection Act, the Share Blocks Control Act, and the National Credit Act.
In our own dealings with the timeshare company, it was apparent that they were intentionally frustrating the process. So we assisted our client in bringing his case before the National Consumer Tribunal. The Timeshare company immediately made a settlement offer to our client in response to our application to the National Consumer Tribunal.
Their legal advisor made the following statement: “we wish to advise that we deny the claims, both in law and on the facts. However, in order to prevent any further unnecessary costs and frustration, we are prepared, strictly in a bona fide endeavour to settle this matter, to offer your client confirmation that his contract is cancelled and a full refund of the monies he has paid, being R24 747.12, together with interest thereon, calculated from the date of his request to cancel.”
In the end, our clients received his money back, including half of his legal fees. As can be expected, he is ecstatic with the outcome and so are we!