The head of the National Consumer Commission (NCC), Ebrahim Mohamed, will appoint a panel of property and consumer law experts to hold a six-month public inquiry into the holiday club and timeshare industry to address “alleged consumer challenges”.
This announcement comes more than a year after the NCC withdrew its case against Univision, the holding company of Quality Vacation Club, and 18 months after its botched case against Club Leisure Group.
The NCC made much of both cases at the time, claiming that Univision and Club Leisure Group were guilty of numerous serious breaches of the Consumer Protection Act (CPA). These included holding consumers to lifetime contracts and misleading consumers into believing that, because they owned points, they owned timeshare.
In March 2013, the NCC assessed consumer complaints about timeshare. At the time, it had received more than 500 complaints against various entities that sell points. There were no complaints against what the industry calls a “traditional” timeshare scheme.
The assessment revealed that the common complaints were that consumers were:
• Misled into believing that points were an investment;
• Refused the right to cancel their contracts;
• Subjected to unfair contract terms;
• Reported to credit bureaus unfairly;
• Having their property attached for non-payment of membership fees; and
• Unable to make bookings because accommodation was never available.
According to a media release issued by the NCC this week, the three-member panel, which will be chaired by a retired judge, will be appointed by Mohamed before the end of this year.
The panel will form part of a task team that will visit all provinces to engage with affected consumers, as well as parties in the vacation-ownership industry.
The media release says the NCC is of the view that a public inquiry is preferable to an investigation “which is conducted within the confines of the Consumer Protection Act”. An inquiry will unearth all challenges, provide a holistic view of the industry across regulatory boundaries and make recommendations to government.
The release says that, to ensure the inquiry’s success, the NCC has partnered with various regulatory organisations, including the South African Revenue Service, the National Credit Regulator, the Competition Commission, the Companies and Intellectual Property Rights Commission and the Community Schemes Ombud Service.
The NCC will advise on the programme for its public inquiry in due course.