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The Legal Ins and Outs of Holiday Timeshare Schemes

After months of hard work and dealing with life’s frustrations, you finally decide to take some time out and plan a holiday. While considering your options, you remember that not too long ago, a person in a mall stopped you and asked if you would like to visit a beautiful destination like the one pictured in the brochure he handed you.  After a convincing discussion about membership fees and the accumulation of points, before you know it, you’ve signed up for a flexi-club or holiday timeshare scheme in South Africa.   And so, you decide to follow up with hopes of cashing in on your points and taking a trip to that stunning stretch of beach in that brochure, only to find out that you are unable to make a booking , despite consistently paying your fee. You consider cancelling your membership, but you are told that you signed a lifetime contract- what now?

At the very least, you can take comfort in knowing that you are not the only South African who has struggled with a dodgy contract in the timeshare industry. According to the Consumer Goods and Services Ombud (CGSO), in 2018, the CGSO “had 427 timeshare-related complaints”. LAW FOR ALL takes a closer look at how to handle cancelling these so-called lifetime contracts and how to spot a timeshare scam.

Let’s take a step back- what exactly is a points-based timeshare holiday?

As Getaway Magazine puts it: “With a points-based system you’d join a club […], pay an annual membership fee and buy points to swap for nights at resorts. This model gives you more flexibility over when and where to go, but if you don’t book in advance your first choice may not be available”.

This sounds fairly straightforward- what seems to be the problem with these holiday time share schemes?

While there certainly have been many consumers who have reaped the rewards of their timeshare membership, far too many people seem to be running into various problems when trying to book a holiday or cancel their memberships.  Cape Town-based commercial, corporate and consumer lawyer, Trudie Broekmann highlighted a few of consumers’ biggest concerns:

Members often struggle to make a booking

Over a period of 4 years, Broekmann says only one of her clients managed to successfully book one holiday, despite many attempts and having points worth approximately R150 000. Broekmann believes that this non-delivery of services is likely due to the fact that the providers do not have enough accommodation available and, thus, design their booking systems to discourage members from continually trying to make a booking.

The marketing is often misleading

Remember that image you saw in that brochure? Well visiting that spot might just be an empty promise. Consumers, through marketing activations etc, are told they can book accommodation at any time of the year at any resort, only to find out that is not the case once they have signed the contract and try to actually go through with planning their trip. The “verbal contracts” from sales people are simply a way to sweeten the deal.

Overly complicated contracts

With almost illegible fine print, complicate languages and sections that do not follow on from one another, many timeshare contracts seem to be designed to frustrate potential members and rush them into signing and “binding” them to unreasonable conditions.

“Lifetime” contracts

Many of the timeshare contracts are in “perpetuity”, which means the consumers is bound its terms and conditions until they pass away. Often, these contracts are automatically assigned to a member’s family. What’s more, members are told that it’s not possible to cancel their contracts.

Surely, it’s the consumer’s problem if they have signed and agreed to the terms and conditions of the contract?

“The problem with the complicated contracts and misleading marketing lies in the fact that it’s not in compliance with the law, particularly The Property Time-Sharing Control and The Consumer Protection Acts,” clarifies Adv. Jackie Nagtegaal, LAW FOR ALL’s Managing Director.  In terms of South African law, there is also no such thing as a lifetime contract. “ In our country, the maximum period for a fixed-term contract is 24 months. Additionally, before signing a contract, the supplier must inform you of the cancellation policy. Should you want to cancel a contract, you must give a business 20 business days’ notice and be prepared to pay a reasonable cancellation fee,” maintains Nagtegaal.

How do these timeshare companies in South Africa get away with this? Is the law clamping down on the industry?

After receiving numerous complaints, the National Consumer Commission (NCC), the primary regulator of consumer-business interaction in South Africa, launched an inquiry into the timeshare industry in 2018. The idea was to review and amend the regulatory framework in order to protect consumers from dodgy schemes. Unsurprisingly, most the consumer concerns were regarding points-based timeshare or vacation club companies that didn’t deliver on what was promised.   Some of the most disturbing complaints the inquiry panel heard included pensioners being taken advantage of and a woman who took her own life after she was drowning in debt and couldn’t get out of her “lifetime contract”.

One of the most impactful revisions that was recommended was the Purchase of Points and Membership Applications Agreement to defined as “ fixed term contracts, running for a fixed, shorter period, subject to renewal by agreement between the club / developer and the member”.  The NCC also maintained that is was a prime opportunity revise sections of The Property Time-Sharing Act, particularly that certain information must be disclosed- in writing- to the consumer before a contract is signed.

What legal options do consumers stuck in a lifetime timeshare contract have at the moment?

It’s best to approach the Consumer Goods and Services Ombud (CGSO), which is set up to uphold the Consumer Protection Act.  You can have a look at the complaints process, for more information. Of course, it’s always advisable to seek legal assistance as well, whether it’s to check the merits of your case and/or to represent you in court or mediation.

How to spot a timeshare scheme scam in South Africa

 Another big problem that seems to be prevalent in the travel industry is the rise of fraudulent timeshare companies.  As a result, the Vacation Ownership Association of Southern Africa (VOASA) highlighted some red flags that you should take notice of:

  • Unsolicited correspondence (calls and/or emails) gauging your interest in possibly selling your timeshare points or eliminating your membership maintenance fee
  • A deal or offer that sounds way too good to be true
  • An offer to transfer your paid-off timeshare ownership to another company
  • A call from someone claiming to be from VOASA trying to make a sale (VOASA does not offer sale or resale services)

For further information, visit www.voasa.co.za or call 021 975-9607

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Cancelling Your Cellphone Contract: What You Need to Know

Signing a cellphone contract and getting the latest device in your hands is a fairly straightforward process, but things get a little more complicated when you try to cancel it. Let’s take a look at what you need to know and, more importantly, what the law says about cancelling your cellphone contract.

What kind of contract is it?

Cellphone contracts are usually fixed-term contracts, which means the agreement between you and the service provider lasts for a legally binding amount of time. The most common cellphone contract period is 24 months.

Can I cancel a fixed-contract before the stipulated expiry date?

Absolutely. As a consumer, your rights are protected by the Consumer Protection Act (CPA), specifically Section 14, which deals with the expiry, renewal and cancellation of fixed-term agreements.

You are allowed to cancel the agreement any time before the date on the contract, but you have to give 20 business days’ notice in writing. What’s more, you also don’t have to give a reason.

Will I be penalised for early cancellation of my cellphone contract?

There will be consequences for early cancellation, but, as the law states, it “may not exceed a reasonable amount”. When it comes to determining what a reasonable amount is, the CPA sets out specific criteria. Factors include:

  • The amount which the consumer is still liable for up to the date of cancellation;
  • The value of the transaction up to cancellation;
  • The cost of the goods which will remain in possession of the consumer after cancellation;
  • The value of the products that are returned to the supplier;
  • The duration of the consumer agreement as initially agreed;
  • Losses suffered or benefits accrued by the consumer as a result of the consumer entering into the contract;
  • The length of notice of cancellation provided by the consumer; and
  • The general practice of the relevant industry. For example, you will be liable to pay all amounts owed up to the date of cancellation. This will include airtime, SMS and data bundles already used.

What if I am having issues with the cancellation?

If you receive pushback from a service provider regarding an early cancellation, think the “reasonable penalty” isn’t reasonable at all or realise that you are still being charged a monthly fee despite the cancellation, and it cannot be resolved with the actual mobile company, then you can approach the National Consumer Commission (NCC) for assistance. To do this, just download and complete a complaints form, which can be found on the website, and mail it back to the address stipulated.

The NCC is the primary regulator of consumer-business interaction in South Africa, and registers and assesses complaints, investigates alleged misconduct by businesses, refers individual complaints to Alternate Dispute Resolution (ADR) agencies (i.e. Provincial Consumer Affairs Authorities and relevant ombudsman schemes) for resolution, and represent consumers in the Consumer Tribunal amongst other things. There is no charge for the NCC’s services.

Make sure you have any necessary documents and relevant correspondence on hand to help strengthen your case.

We’ve Got Your Back!

If you have questions about cancelling your cellphone contract, feel free to get in touch with LAW FOR ALL’s legal professionals who can give you sound legal advice and guidance. If a service provider is giving you the runaround and you have trouble cancelling your contract, our lawyers can intervene. If you don’t have legal insurance cover, join today!

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How to Stop Those Annoying Spam Calls

It a source of frustration and irritation for many South Africans: an annoying marketing phone call from a “private number” trying to sell you an upgraded cell phone plan or insurance package. And even after declining the offer politely, a persistent agent forces you to hang up, leaving you to wonder how on earth they got your number in the first place.

Well, this is the world of telemarketing, where companies make it their business to compile databases containing the personal information of hundreds and thousands of people. This information is then shared with other companies that, in turn, make cold calls to potential new customers. According to Swedish app Truecaller (more on this later), South Africa ranks fifth in the world as far as spam calls are concerned, and the average South African receives about 15 unsolicited calls a month.

Read the Fine Print when Signing Forms.

There are various ways in which your personal information is captured and, ultimately, distributed. For example, consumers who shop online often inadvertently give the company’s marketing team permission to contact them about other products and offers. Another prominent method used to compile databases is loyalty cards or other similar schemes- like free Wi-Fi or social media competitions that require customers to sign up or opt-in. Additionally, many insurance companies team up with other businesses and client information is shared between the two parties.

It is essential to read the fine print and be cautious when providing your contact information as there are sections that allow you to opt out of receiving marketing notifications.

Know Your Legal Rights.

On the legal side, the Consumer Protection Act (CPA) makes it illegal for companies to direct unsolicited marketing messages to consumers who have “opted out”. Direct marketing is seen as:

• A form of either personal or electronic communication;
• To promote any goods or services, or;
• Requesting a consumer to donate something.

The CPA is strict about the specific time of day consumers may be contacted for purposes of direct marketing. As it stands, direct marketers cannot reach consumers at home on Sundays and public holidays. Or on Saturdays before 9 am and after 1 pm, and on weekdays between 8 pm and 8 am the following morning.

The Protection of Personal Information Act (POPI) also prohibits unsolicited direct marketing. It specifies that “the processing of personal information for direct marketing using SMS or e-mail is prohibited unless consent is given”.

Opt-out from direct marketing through the National Opt-Out Register

If the calls are coming from a telemarketing company, registering on the national opt-out database can enable you to opt out of all direct marketing communication. The National Opt-Out Register is run by the Direct Marketing Association of South Africa (DMASA). The register documents your contact information and ensures that it’s not available to any marketing-related companies.

Do note: the register does require some personal details, i.e. your ID number, as well. Not to mention, it is only useful if the companies you are trying to block are registered with the DMASA.

If you are still contacted after registering, you can lay a complaint with the National Consumer Commission on 012 428 7000 or complaints@thencc.org.za.

Download Truecaller on your Smartphone

If you have a smartphone, you can also block spam calls by downloading and using an app like Truecaller. In a nutshell, the app is a global telephone directory that allows its users to have caller ID service despite not having the caller’s telephone number in their phone’s address book. It’s most popular feature is the call blocking one. This service allows a user to block calls from specific telephone numbers they don’t want to receive or ones that have been labelled as spam by other users of the service.

If all of the above fails, stand up for your rights and contact the SAPS

Essentially, you could open a harassment case and get the SAPS involved. The police will take a statement, jot down your details and start an investigation. Thanks to the Regulation of Interception of Communications Act (RICA), the police have access to every cell phone user’s details and can use this information to track down the perpetrator. Once they do this, they will contact you and ask how you wish to proceed.

Need legal advice or assistance with harassing phone calls?

LAW FOR ALL provides expert legal advice to all Policyholders, so if you want a caring friend in the law on your side, feel free to get in touch.


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The Point of Return: Dealing with Returning Unwanted or Faulty Goods

We’ve all heard the phrase, “The customer is always right”, which is used by disgruntled shoppers to embolden themselves when returning goods.  However, being right and having the right to take back that vacuum cleaner that sucks in all the wrong ways are two very different things.  This is where the Consumer Protection Act (CPA) comes in, and we will break down and eliminate most of the jarring jargon to give you some insights on when you will have a better chance of getting refunded because there is no general right of return. 

For instance, if you get a serious case of buyer’s remorse and can’t believe that you spent so much of your well-earned cash on an unnecessary appliance you can’t really return it simply because you regret it.  Sure, some retailers, for the sake of good customer service, usually allow the return or an exchange of sorts, but it’s not within your legal right to do so.

And ’tis the season to fill the trolley, so you might want to take note of the following:

4 EXAMPLES OF WHEN YOU CAN RETURN GOODS UNDER THE CONSUMER PROTECTION ACT.

  1. There is a “cooling-off” time after a purchase was made through direct marketing.
    If you bought an item online or through a tele-sale, you are legally entitled to a no-questions-asked return for a period of 5 days after receiving it.  You won’t be penalised for breaking the “contract” and you will get all of your cash back. There is a slight catch though; you are usually responsible for the actual cost of returning the product.
  2. If you haven’t actually seen nor had the chance to inspect the item before you clicked “Buy” and checked out, then it is within your rights to give the appliance a closer squiz on delivery. If the product does not reflect the quality that was advertised or if a special custom order was not adhered to, then you can refuse delivery and expect a full refund.  What’s more, the supplier is responsible for the cost to return the product.
  3. If a supplier informs you that the product is more than capable of fulfilling a particular purpose that you enquired about, and it subsequently does not live up to this, then the Consumer Protection Act is your friend. Basically, if the supplier tells you that, for example, an appliance do can exactly what has been advertised in a particular time as per your particular purpose, and the machine simply can’t do this, then you can get your bucks back.  You have 10 days after receiving the goods to secure your refund, and, once again, the supplier has to foot the return bill.  DO NOTE: if you’ve tampered with or altered the product in any way, the CPA won’t be on your side.
  4. You have the right to receive a defect-free, effective product that is usable for a substantial period of time. If your item doesn’t pass of any these above-mentioned requirements, then you have up to 6 months after receiving the appliance to return or replace it.   The supplier is also responsible for any repairs.

At the end of the day, also remember to spend wisely over the festive season.  South Africa is the most indebted country in the world, so don’t start the new year on the wrong foot.


For more details, feel free get stuck into the full Consumer Protection Act of South Africa.

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