The FF Plus today heard from the consumer protection commission in the portfolio committee on trade and industry that serious steps will be taken to address the problems in the holiday club industry.
This follows after the FF Plus had submitted complaints to the committee last year regarding holiday clubs and these complaints were then referred to the consumer commission for investigation.
The consumer commission decided, amongst others, that the following aspects of the industry will be referred to the consumer tribunal for a final decision:
- The perpetual nature of these contracts. The consumer commission wants the tribunal to find that all contracts which have a perpetual effect should be regarded as unconscionable and should have no legal standing. The implication will then be that any member who is bound to such a contract will be able to decide whether to withdraw from the contract or whether to continue with it, but on a more equitable basis as approved of by the consumer commission;
- Marketing practices such as aggressive marketing, undertakings and promises which are not fulfilled and any other undertakings that are not in agreement with the reality of he contracts and the products, will be stopped by having it declared as an unacceptable practice;
- Thirdly, the tribunal has to make a finding if members could withdraw from a valid contract in a fair manner. The consumer commission views the five day cooling-off period following the conclusion of a contract as insufficient and therefore wants the tribunal to make a finding with regards to a reasonable basis on which members could give notice of the cancellation of a contract, taking into account a reasonable cancellation fee as it is currently the practice with fixed term cellular phone contracts.
- The consumer commission, following talks with the industry last week, instructed the holiday club industry to draw up a code of conduct and submit it to the consumer commission by the end of October 2014. The code of conduct will then be published for public comments. After consideration of the public inputs and an audit of the code in line with the Consumer Protection Act, it will be gazetted as a regulation by the minister. This means that the code will have legal standing with consequences should any holiday club contravene it.
The FF Plus is happy that these steps were taken and it will have real legal power at the completion of the process. It will have a profound and fair effect on holiday club members who are suffering due to unfair contracts and practices.
Contact no.: 082 391 3117 / 083 419 5403