The National Consumer Commission (NCC) spokesperson, Trevor Hattingh, says the NCC will fight the holiday club matter “until the end”, after it withdrew its case against the Univision Group earlier this month on the basis of “administrative holes”.
According to Hattingh, the NCC’s legal counsel identified certain technical defects with the NCC’s application that were potentially harmful to its case. For example, because the NCC wanted the order to have bearing on all holiday clubs selling timeshare points in South Africa – and not only the Univision and Club Leisure Groups, against which it has brought specific applications – the Tribunal insisted that its application must list every single participant in this industry.
Another problem was that some of the timeshare contracts included in the application were entered into before the Consumer Protection Act (CPA) was promulgated and the Act is material to the NCC’s submission.
Holiday club membership, via the ownership of points, has to a large extent replaced traditional timeshare ownership in South Africa on the basis that it gives members access to a wide range of accommodation, as opposed to the exclusive use of one share block.
Hattingh said its application against Club Leisure Group, which earlier this year it declared a “fraudulent scheme”, would also be withdrawn before the end of the month for resubmission.
In a press release published earlier this month, the Univision Group said the Commission withdrew its application “after acknowledging insurmountable problems with its application”. Univision spokesperson, John Meyer, labelled the NCC’s application “ill-founded, devoid of substance” and “vexatious and frivolous in nature”.
NCC head, Ebrahim Mohamed has voiced concern over the “misleading and crafty media and consumer responses” from the Univision Group.
Univision brought an application for costs against the NCC after it withdrew its application, but the Tribunal dismissed this.
“The Clubs are also considering their damages, and other options as a result of the action of the Commission and the negative publicity flowing from ill-founded and reckless comments and statements by members of the Commission,” Meyer said.
Are points legal?
Together with legal counsel, the NCC is compiling a new application to submit either to the High Court or Tribunal, says Hattingh.
He said that while the Tribunal has jurisdiction over the CPA and National Credit Act (NCA), it does not have jurisdiction over the Property Timesharing Control Act or the Share Blocks Control Act, which also have bearing on the matter.
“In terms of the allegations that have been made, there have been contraventions of all the acts,” he said.
These allegations have been made both by consumers and the NCC itself, through an industry-wide investigation it launched into the vacational ownership industry in 2013.
Ultimately, the NCC will go the route that is likely to yield better outcomes for consumers, says Hattingh, who notes that the NCC received more than 350 individual consumer complaints last year.
This year, it received 242 new complaints between April and October. “The evidence is overwhelming, consumers are coming forward daily, which is enough to show that there is a serious problem in this industry,” he tells Moneyweb.
The majority of complaints, says Hattingh, relate to the points system. “People are not happy with the points system. They are paying levies towards accommodation that they don’t have title deeds for,” Hattingh explains.
He says that neither the Share Blocks Control Act nor the Property Timesharing Control Act specify that you have to pay levies for something you don’t own.
“We have to find out whether the points system has legal standing in South Africa,” he says. “It is not over until a court has ruled on this matter and if the Commission is not satisfied with that ruling we will take it to the highest court in the country.”
Mohamed believes the Commission has a strong case against these companies and advises consumers to exercise caution when engaging in timeshare-related transactions. “Consumers with new timeshare complaints must continue lodging them with the NCC until this timeshare issue is brought to finality,” Mohamed says.
Club Leisure Group (CLG), meanwhile, announced in September that it had registered itself with the Consumer Goods and Services Ombud (CGSO) “as an added means to resolving queries and disputes as quickly and amicably as possible”.
Together with legal counsel and companies such as Univision, Holiday Club and Tsogo Sun, CLG has drafted an industry Code of Conduct, which is currently under review by the NCC.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk