Another setback to regulator’s case against holiday clubs

Thousands of holiday club members have again been left hanging following the decision by the National Consumer Commission (NCC) on Monday to withdraw its case against the Univision holiday club group on technical grounds.

It is unclear what the knock-on effect will be on the matter involving Flexi Club and other holiday clubs in the Club Leisure Group. The NCC was unable to respond to queries before this publication went to press.

The withdrawal came shortly before the National Consumer Tribunal was due to hear the matter. It was reportedly based on the advice of the commission’s senior counsel following a pre-trial meeting with the group’s legal representatives about a month ago.

That the case was to be heard by the tribunal had given some solace to consumers, because it meant they might get relief. A decision by the tribunal has the same status as one made by the High Court.

More than 4 000 complaints have been lodged with the NCC against holiday clubs, according to Advocate Anton Alberts, a Member of Parliament for the Freedom Front Plus. For the past two years, the party has been helping consumers who own points to lodge complaints with the commission.

The commission brought the Univision case before the tribunal following an investigation into holiday points schemes that lasted about two years. It alleged that Univision had mis-sold its products and there were illegal in-perpetuity contracts. It also alleged there was oversubscription for the holiday resorts, which did not have enough accommodation to meet demand.

It was reported that the NCC said it had a substantively strong case against Univision that could be brought before the High Court.

RED TAPE

Similarly, the case involving Club Leisure Group is entangled in red tape, with the tribunal saying the NCC’s papers were not filed in accordance with its new rules, which changed in March this year. The NCC has subsequently applied to the tribunal for condonation (for non-compliance with the rules).

It was expected that the Club Leisure Group case would be heard at the beginning of next year, Alberts said in a statement issued on September 30. But in light of the withdrawal of the Univision case, this may also turn out to be a disappointment to consumers.

In the meantime, Alberts said, club members who are experiencing problems with their membership, because they are not receiving the services for which they are paying, or because of the perpetual nature of their contracts, may still apply individually to the NCC to adjudicate their case.

Flexi Club released a statement recently saying that it does offer its members a cancellation option, as well as alternative contract solutions.

It also announced that it was extending its cooling-off period from five days to 30 days, “during which the consumer is able to cancel and receive a full refund”.

“Members, outside of the 30-day cooling-off period, who would like to cancel their contract are required to submit a cancellation request in writing to Flexi Club. The terms of the cancellation require that any arrears are brought up to date and that the financed amount for the purchase of the points be paid in full. In the event that a member is unable to bring their arrears up to date or settle the financed amount, these contracts will then be dealt with on case-by-case basis and a cancellation fee may be charged. Once the cancellation request has been processed, the member has until the end of the year to make use of any accumulated points and holiday savings.”

As an alternative to cancellation, Flexi Club says members can convert their existing in-perpetuity points into term-based points.