Pressure mounts on Vacation Hub International
WATCH how to exit with your money from your VHI membership as authorities close in
The Somerset-West-based "travel club" faces a class action and possible prosecution from the national consumer authorities.
A firm of attorneys specialising in consumer law is seeking to bring a case against Vacation Hub International (VHI) on behalf of clients who have been refused refunds after cancelling contracts within the cooling-off period.
This comes as the National Consumer Commission (NCC) plans to prosecute VHI following its investigation into the privately owned Somerset West-based company, which has been the subject of 219 complaints to the NCC over the past two years.
The commission is finalising its application to file with the National Consumer Tribunal, NCC spokesperson Trevor Hattingh told Money.
VHI is mentioned in a report released by the NCC late last year on the misdeeds of the holiday ownership and timeshare industry.
The report was commissioned after years of abuse of consumers who complained mostly of their inability to cancel contracts with holiday clubs; the unavailability of accommodation; unacceptable alternative accommodation; and misrepresentations made during sales presentations, among other things.
Though VHI does not sell timeshare or points, complainants on Hello Peter claim that its agents use some of the same unsavoury sales tactics as those employed by the timeshare industry's worst elements.
Describing VHI as "more of a travel club", Trudie Broekmann of Trudie Broekmann Attorneys says one of her clients reported to her that he was charged an upfront fee of R14,399, as well as a monthly service fee of R2,333 payable for 24 months and a monthly "reliance benefit contribution" of R710 payable for 120 months. "The reliance benefit contribution is supposed to give you the right to cash-back rewards after 10 years," she says.
VHI contracts are unlawful, so consumers who have signed with VHI can rely on this even if they missed the cooling-off deadline.Attorney Trudie Broekmann
Several clients have engaged Broekmann, alleging illegal practices by VHI, including the refusal to honour the applicable cooling-off period, and the refusal to refund clients who have exercised their right to cancel in the cooling-off period.
Trudie Broekmann Attorneys has released a video aimed at helping aggrieved VHI clients enforce their rights.
How to exit with your money from your Vacation Hub International membership.
"We will apply to the tribunal for the maximum fine under the Consumer Protection Act to be imposed on VHI on account of their illegal practices. The maximum fine is R1m or 10% of turnover for the past financial year, whichever is higher," says Trudie Broekmann.
"We sent VHI cancellation letters on behalf of eight clients. Initially we received no response, but after putting out a press release in November, we received an offer of cancellation but without a refund for these clients."
VHI's Esti Forbes told Money that Broekmann's clients' matters had each been dealt with on their merits and in terms of the agreements they signed. "These matters are currently the subject of litigation and we will therefore not discuss individual cases in the press," said Forbes.
In terms of the Consumer Protection Act, if you have entered into a contract as a result of direct marketing you're entitled to cancel the contract without any penalty provided you cancel it within a cooling-off period.
"Let's say the supplier approaches you in person, telephonically or using an electronic method of communication, such as e-mail, and markets their product or service. As a result, you sign a contract with them. But before five business days have passed after you signed the contract, or received the goods you bought, you cancel the contract by notifying the supplier," says Broekmann.
"Your cancellation has to be in some recorded form. In other words, by e-mail, fax, letter, SMS, WhatsApp or a recorded phone call. It need not be by registered mail.
"The cancellation notice must clearly state that you are cancelling the contract with the supplier and must reach the supplier before the five business days is up."
The supplier must, within 15 business days, pay you back whatever you've paid. If you received goods from the supplier, you must return them at your own cost.
You do not need to pay a cancellation penalty in such an instance.
Broekmann says she already has two other law firms who want their clients to join her group of VHI claimants. "Consumers who are keen to join the group claiming back money they paid VHI are encouraged to contact us. The more claimants, the less it will cost each individual in legal fees."
Broekmann says she has discovered that the VHI contracts are unlawful and consequently invalid, so consumers who have signed with VHI can rely on this even if they missed the cooling-off period's deadline.
Misleading marketing has been reported to her by her clients, including the promise that discounts on flights are available.
"Consumers need to know that that is specifically excluded in the contract," she says.