Holiday sharks warning
Holiday club "sharks" love beaches. People on the beach are generally on holiday or chilling out. They are easy prey. The beach is the last place you would expect to encounter a cunning salesperson.
While they prey on all sorts of people, holiday club sharks favour couples and flatter their prey. They use lines like: "You two look like you're in love. Are you newly weds?" This is a sales tactic called soft-soaping. Once they've disarmed you, you will be invited to take part in a lucky draw or a competition. This should set off alarm bells.
You will win something big - a day at a spa, a holiday at a local destination or even an international holiday.
While you battle to believe your luck, you will be lured into the shark's offices so they can get your personal details, ostensibly to enable you to redeem your "prize". And then comes the Big Sell - the mother of all sales pitches.
You will be led to believe that you are getting the offer of a lifetime: pay a lump sum now - presented as a modest "investment" - and enjoy holidays for the rest of your life. This sum, discounted for today only, buys you points you can use to take holidays all over the country and/or the world.
Anni Feely, a Johannesburg lawyer, is one of thousands of consumers who has fallen for this kind of sales pitch. So too did a Zimbabwean couple, Mr and Mrs B, who live in Cape Town. He's an architect and she's doing her master's degree in philosophy. They are so embarrassed they fell for the con, they don't want to be named.
Mr and Mrs B were taking a stroll on Camps Bay beach in August when they were ambushed.
Mrs B "won" a day at a spa and Mr B scooped the "big prize": an all-expenses-paid holiday in SA as well as a holiday in either Mauritius or Thailand. Before they knew it, they were in the holiday club shark's offices nearby, being offered lifetime holidays if they bought points worth R58000. To close the deal they were told for that day only the points were discounted to R50000. All they needed to do was pay a R5000 deposit. "It was really very convincing. And it happened so fast, we decided to buy into the deal."
The couple paid the deposit by credit card and then signed forms. "We didn't even read what we were signing," said Mrs B. "You think you're signing because you've made a purchase, but it's a contract."
About a week or two later, Mr and Mrs B were feeling uneasy about it and asked to get out of the deal. "They said 'No, the contract is legally binding. You owe the club R45000 and club fees. You will need to pay this to get out of the club'."
Mrs B said the club has offered to help them sell their points for R42000.
The club offered Mr and Mrs B credit so they can pay off their points by debit order, with interest. However, it did not carry out an affordability assessment. "We weren't asked for bank statements or for salary slips; there was no checking our worthiness for credit," said Mrs B.
In terms of the National Credit Act, a credit agreement is reckless if, at the time it was made, the credit provider failed to conduct an affordability assessment. One of the remedies for reckless credit is setting aside the agreement, which only a magistrate can do.
Ditch that holiday contract
Consumers who find themselves trapped in a contract with a holiday club often feel like there is no way out, and some have even been given legal advice to this effect.
But Trudie Broekmann, an attorney who specialises in the Consumer Protection Act (CPA), says there are many ways of getting out of a contract. If you've been a victim of misleading marketing, the CPA says that the resulting contract is void.
Broekmann, who is representing almost 100 consumers who are trying to cancel their contracts with holiday clubs, says that misleading marketing is a dominant theme among her clients.
"The CPA prohibits misleading marketing. Many of my clients ... have said key things they ought to have been told were not disclosed to them - the cancellation of policy being one of them. This is usually because it's a contract "in perpetuity" or a "lifetime" contract.
"Most people say they either weren't told or didn't understand that they were entering into a lifetime contract."
She says the CPA also says failing to disclose a material fact amounts to misleading a consumer. "If you lose your job or retire and have less income or less of an interest in holidays, it's not explained to you that you are bound in all circumstances. That is very clearly misleading marketing."
The levy or potential dramatic increases in the levy are typically also not disclosed, Broekmann says. The unavailability of accommodation is also never disclosed, she says. "The booking system of all holiday clubs is set up in such a clever way to make it impossible for all members to obtain a booking."
The CPA gives you the right to cancel any fixed-term contract, but the clubs argue that this section of the Act doesn't apply to them because their contracts are lifetime contracts. However, "lifetime" contracts do not exist in common law.