Complaint FF Plus laid about holiday clubs now producing dividends

2015-09-30
Adv Anton Alberts

The complaint which the FF Plus had laid a couple of years ago with the parliamentary portfolio committee on trade and industry and the National Consumer Commission (NCC) is now rendering dividends and has a much bigger effect than was expected, Adv. Anton Alberts, the FF Plus’ parliamentary spokesperson on trade and industry says.

The complaint was submitted after the FF Plus had received numerous allegations of irregularities and unethical action by the industry. Thousands of dissatisfied club members from across the country approached the FF Plus for assistance and all of the complaints formed part of the investigation.

An in-depth investigation has since been undertaken into, amongst others, the state of the points system in the holiday club industry and according to the NCC their investigation gradually revealed much larger problems.

The following was found during the investigation:

  • The perpetual nature of holiday club contracts is illegal and members should be allowed to withdraw from the contracts;
  • The points system, in contrast with systems based on time-share and sectional title basis which are both regulated through legislation, is an illegal scheme in terms of the Consumer Protection Act.

The NCC has brought two applications to the Consumer Tribunal (CT) against two club groups and requested the following remedies:

  • That the point system be declared an illegal scheme in terms of the Consumer Protection Act with the consequence of all such contracts being declared illegal;
  • If the first application is denied, the contracts with perpetual clauses be declared illegal.

The effect of success in any of these two applications will be that the majority, if not all, point system contracts will be illegal and unenforceable. This means that people who are struggling to pay the charges of these contracts will no longer be bound by it.

If it is found that the point system in its entirety is illegal, the FF Plus will ask for intervention by the department of trade and industry to see to it that all members and previous members receive value for their money which had been paid over years and again link their membership to the assets and especially the numerous holiday properties which exist in the clubs.

It will boil down to members and previous members obtaining a legal economic interest in the assets through, for example, shares in the company where the assets are found. Those shares will be sold easier due to the underlying assets with its value based on fixed property.

The two clubs against which the application has been brought are:

  • The Union Group which consists of Vacation Recreational Services, Quality Time Marketing, Quality Vacation Club, African Club Innovations, Multi Destination Club, Lifestyle Vacation Club and African Vacation Club;
  • The Club Leisure group consisting of; Eagle Trust, Hibiscus Trust, Club Leisure Holding, Club Leisure Group, Club Leisure Sales, Club Leisure Development, Club Leisure Management, First Resorts Management, Flexi Club Property Holdings, Flexi Holiday Club, Flexi Club Management Services, Off Beat Holiday Club, Rainbow Vacation Club, Golf Resorts Club, Holiday Access, Interchange Vacation Club and Club Resorts International.

The decision that the CT will be making will have general application and all clubs which had not been included in the abovementioned applications will therefore also be bound by it.

The applications were submitted at the beginning of the year and the Univision case will be heard in November 2015. It is expected that the Club Leisure Group case will be heard at the beginning of next year.

In the mean time, it is of great importance that club members who experience problems with their membership on the basis of the fact that they are not receiving the services for which they are paying and/or the perpetual nature of the contract, may still apply individually to the NCC to adjudicate their case.

Many applicants have already had their contracts cancelled and received other solutions. This can be done by sending an e-mail to the FF Plus at help@vfplus.org.za following which a NCC application form will be forwarded.

Complete the form and sent it back to the FF Plus along with all the supporting documentation. The party will then be delivering the application by hand to the NCC’s head office and the NCC will be in direct contact with the applicants and provide them with a reference number.

“It appears that the work of the FF Plus in this regard has reaped fruit and is proof that the party acts in favour of consumers and taxpayers in South Africa,” Adv. Alberts says.

 

Contact no.: 082 391 3117 / 083 419 5403