Timeshare legal shake-up proposed

Consumer commission releases report on findings of inquiry

THE National Consumer Commission has proposed a wide-ranging shake-up of legislation to enhance consumer protection and clean up the local holiday ownership and timeshare industry.

This will include the appointment of an ombudsman to rule on future complaints and possible banning of marketing practices long used to lure consumers.

The NCC released a 135-page report yesterday on the findings of its inquiry into the timeshare industry, which started in May 2017.

Commissioner Ebrahim Mohamed said the report was the outcome of efforts to understand the complexities of the industry, assess the extent of consumer challenges, conduct research and make recommendations to improve consumer protection within the timeshare industry.

“The holiday ownership industry in its current state has been a source of frustration and anger for many consumers. The NCC witnessed this when consumers made oral submissions at public hearings. It was disturbing and sad to see elderly, vulnerable, pensioners sob and plead for help and relief.”

The report’s recommendations covered a range of issues, from club management to marketing and credit-related and quality-of-service complaints. He said consumers had mostly experienced problems with the points system within the industry and not with conventional timeshare, and most recommendations concerned legal reforms.

The NCC accepted proposals to pass “a modern, industry-focused, comprehensive piece of legislation that centralises regulation of the timeshare industry” to “bring consumer protection in the industry on a par with the rest of the world”.

This would include the appointment of a new regulator or ombudsman tasked with enforcing compliance with existing and future legislation.

He said the report recommended the minister of Trade and Industry prescribe, in terms of the Consumer Protection Act (CPA), information consumers must receive before transactions with clubs can be concluded.

Another recommendation was all timeshare contracts, points purchases and membership application agreements be defined as “fixed-term contracts subject to renewal by agreement between the club/developer and the member” and that consumers enjoy rights under the CPA, including the right to cancel a contract.

The report recommended amendments to the Property Time Sharing Control Act to prescribe information that must be disclosed to consumers before buying timeshare and that a regulatory authority enforce the legislation, and stiff penalties be imposed on firms for “crossing the ethical line”.

The report also recommended that to help consumers who want to cancel purchases within the cooling-off period, the minister prescribe a provision for the club to disclose an email address where notice of cancellation is deemed to be received once proof of remittance is provided.

It recommended the commission resolve complaints about cancellations and complaints of alleged reckless credit be referred to the National Credit Regulator.

Vacation Ownership Association of Southern Africa (Voasa) chief operating officer Alex Bosch, welcomed the report. “Voasa has at all times fully participated in and co-operated with the NCC inquiry and has made extensive submissions and representations. Voasa remains committed to ensuring 100% of timeshare owners and holiday club members are happy with products and levels of service received.”