'R699' car deal implodes

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IOL mot pic jul4 R699 Deal

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Satinsky Group clients were up until last month paid to display this giant sticker on their cars.

Johannesburg - The Satinsky Group has dropped a bombshell on its “New Car from R699 per month” clients - said to number more than 17 000 countrywide - by announcing that the monthly advertising fees they rely on to meet their repayments to the bank have come to an end.

Most were already jittery because in recent months their fees - paid in exchange for the car owners plastering giant advertising stickers on their back windows and doing relatively high mileages every month - have dropped dramatically.

Many Satinsky clients went from being paid more than R1000 a month in fees in February to R570, then R484 and then, this month, not a cent.

On a Facebook page which some 500 “victims” of the scheme have joined, there is talk of taking legal action against Satinsky for breach of contract; some have posted photos of their advertising stickers, with additions such as “scam”; and one man has suggested that they drive their cars to a specific “field” in each province as a form of public protest.

DELUGE OF QUERIES

Faced with a deluge of queries from angry, bewildered clients in the months leading up to this week’s “Game Over” announcement, Satinsky has consistently quoted a clause from the contract which states that “Advertising fees may vary/fluctuate from month to month…” and refused to comment further.

Before they took possession of their shiny new wheels, having paid no deposit, clients were made to sign two contracts: one with a bank, making them solely liable for the full instalment over six years, and a second contract with Blue Lakes Trading & Promotions of Hong Kong, in terms of which they would get paid for turning their cars into mobile billboards.

Satinsky insists that Blue Lakes is a separate company, and that they merely acted as a “managing agent” for Blue Lakes in South Africa.

ALTERNATIVE OFFERING

On Tuesday, the day many Satinsky clients realised they hadn’t been paid a cent for June, Satinsky announced to them that it had dissolved the “management agreement” between itself and Blue Lakes and that it had found “a suitable alternative offering”, having appointed Accelerator Rewards (Pty) Ltd as its “valued partner”.

But all they stand to get from a referral, sent via smartphone, which leads to a car sale are “points and discount vouchers”.

There is little enthusiasm for the new deal, and many have removed their car stickers.

“We don’t need points, or discounts, we need the cash,” said one. “That’s the reason we took the original deal.”

Asked to comment, Satinsky spokesman Siyanda Zulu would only say: “At this stage we are engaging with all stakeholders and clients. As a result, we reserve our right to comment at a later stage.”

Satinsky’s legal adviser, Craig Thompson, said the company would meet face to face with The Star next week to discuss all the issues.

The banks which have financed these cars - Absa, Nedbank’s Motor Finance Corporation and Standard Bank - insist, along with Satinsky, that the applicants’ affordability was assessed based on their income and expenses alone; the anticipated Blue Lakes fee was not taken into account.

‘ADVERTISING SERVICE PROVIDERS’

But many of the car owners - most of whom earn between R6000 and R10 000 a month - claim they cannot afford the full car repayments without the “subsidy” in the form of the advertising fee.

“I’ve had people literally crying on the phone to me today,” said Ayob Mungalee, of the People Seeking Justice Action Group.

Allegations have been made on the Facebook page that applicants’ declared monthly expenses total was lowered in order for the applications to be successful.

Mungalee said he had spoken to about 120 people from poor communities in Mayfair, Eldorado Park and Soweto who had bought these cars, and nobody could afford the repayments without the advertising fee.

National Consumer Commissioner Ebrahim Mohamed said that because those who had signed the Blue Lakes contracts are “advertising service providers”, rather than consumers within the context of the Consumer Protection Act, they don’t benefit from the act’s protections.

The Star


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