When trying to cancel a timeshare agreement, it is often a lengthy, complicated and/or expensive process resulting in members who are bound to the agreement indefinitely. Since the inception of the Consumer Protection Act (CPA), the status of timeshare agreements has been a bone of contention and 3 years later remains unresolved.
As early as 2015, the National Consumer Commission (NCC) lodged an application with the National Consumer Tribunal against major role players in the timeshare industry, but these cases were withdrawn due to the deficiencies therein.
However, relief may be in sight as the National Consumer Commissioner Ebrahim Mohamed advised that his department would be launching an inquiry into the practices of the timeshare industry during a media briefing held on 18 May 2017. A 3 member panel will, over a 6 month period, conduct the inquiry and upon its conclusion furnish a written report the NCC for consideration. The inquiry stems from consumer bodies receiving an immense number of complaints against holiday clubs, whose complaints the NCC views to have merit. The nature of complaints includes, but is not limited to, allegations of misrepresentation, overbooking and/or the inability to cancel the agreements.
Taking the aforementioned complaints into consideration, suppliers must heed:
- Section 41 of the CPA which regulates that a supplier may not market any goods in a manner, by word or conduct, which is likely to mislead a consumer. Therefore, if the member enters into the timeshare agreement based on any false or misleading representation made by the supplier or his representative, the member could cancel the agreement as a result thereof.
- Section 47 of the CPA which stipulates that if a supplier accepts a reservation it must provide same said reservation or furnish the consumer with an alternative accommodation of equal or comparable quality. If the supplier is unable to do so, the supplier must refund the consumer any money paid, together with interest from the date of payment until the date of refund. The consumer may further claim any cost incidental to the cancellation such as the cost of flights and vehicle hire.
- Section 48 of the CPA which stipulates that a supplier may not require a consumer to assume any obligation which is unfair, unjust or unreasonable. By implementing lengthy and often difficult cancellation policies, the aforementioned can be viewed to be excessively one-sided in favour of the supplier and therefore in conflict with the aforementioned section. The consequence of which would render the term/s pro non scripto (void).
Based on the number of complaints referred to in Mohamed’s briefing, it is apparent that there is a large percentage of consumers who feel that their rights, afforded in terms of the CPA, have been infringed. It is therefore clear that the timeshare industry requires stricter regulation in respect of consumer protection. The outcome of the inquiry is therefore of great importance as it will potentially establish set standards/norms for the various models of timeshare products in relation to consumer protection.
ABOUT THE AUTHOR
Mariam Allie graduated with a BA(Law) LLB from the University of the Western Cape. She is a registered Attorney, Notary and Conveyancer and currently practices as a legal advisor in the SEESA Consumer Protection & POPI legal department at the Cape Town office.