Major Problems with Timeshare Identified

A formal inquiry into the VO/Timeshare Industry was established by the Commissioner of the National Consumer Commission (NCC), Mr. Ebrahim Mohamed, during 2017. The inquiry was run in accordance with formal terms of reference which were published on the NCC website. The Commissioner appointed a three-member inquiry panel during May 2017 to undertake the said inquiry and on his behalf.

In addition to extensive research the Inquiry Panel conducted prior to, during and subsequent to the formal inquiry process, it  also conducted, by way of public consultations to which interested parties, including consumers, industry participants, consumer protection bodies and regulators were invited to make their submissions. A few academics, students and researchers with interest in the timeshare industry also attended some sessions. The public consultation sessions were held across the country as follows:

The written and transcripts of the oral submissions formed part of the record of the inquiry. Most complaints raised during the inquiry, amongst others, related to:

  • the inability to cancel contracts with the clubs;
  • forfeiture of points;
  • unavailability of accommodation;
  • unacceptable alternative accommodation offered;
  • misrepresentations made during sales presentations;
  • value of the points that industry sells to consumers;
  • the membership fees linked to membership levels; levies charged and the unpredictable annual increases to these;
  • inaccessibility of the VO clubs’ AGMs as well as inadequate handling of complaints by the clubs.

The types and levels of complaints received during the inquiry, including that of the clubs were roughly the same as those received by the NCC prior to the Inquiry, which led to the Commissioner (of the NCC) instituting the Inquiry.

According to industry sources, the timeshare vacation industry contributes approximately R3.5 billion to South Africa’s Gross Domestic Product (GDP). The industry consists of the following state holders: clubs, developers, resorts, property holding entities (usually trusts), management entities (companies or agents), exchange companies, re-sale agents or companies and travel clubs.

The ‘club’ is the entity which consumers become members of when they purchase points or rights in shared holiday accommodation. The relationship between a club and its members is regulated in terms of the Constitution and Rules of the specific club in question, in addition to applicable laws.

Within the industry, there are various entities orbiting the clubs. Each entity has a role to play in ensuring consumers obtain access to shared holiday accommodation. All the entities surrounding the clubs are for profit. The club, which is the only entity from whose members’ income is generated, is the only not-for-profit entity with its members having no rights to sharing in surpluses.

The developer of a club is not to be confused with a property developer. Developers play a critical role across the shared holiday accommodation ecology. The developer is responsible for marketing, selling, finding and bringing points into the club. The club then develops points for access to the shared holiday accommodation. The developer is also responsible for marketing and selling points to consumers and designing contracts in respect of these points. In addition, the developer handles applications for club membership and further provides vendor financing to consumers. Developers are (or should be) registered credit providers. They could also be the managing agent for the club and represent the club in respect of its rights within resorts. Beyond representing clubs’ shareholding in resorts, many developers own shares in the resorts. The developer for the club is generally a company for profit, incorporated in terms of the South African company laws.

The club may appoint a managing agent, usually for a profit company to manage membership matters. These are matters relating to, among others; membership services; reservations; payments to the resorts for maintenance, special levies; and collection of membership fees, levies and charges. There is also an entity where the club may warehouse the rights to the shared vacation accommodation, generally a ‘Trust’.

The last cog in this wheel is the “resorts” where holiday ownership accommodation is found. Consumers can access accommodation by redeeming their points or exercising their timeshare rights. The resorts can either take the form of sectional title units, share block schemes, or free-standing properties, etc.

There are two main shared vacation accommodation products sold to consumers in this industry. The first is the fixed timeshare and the second would be the points. Consumers purchase either one from developers associated with the respective clubs. The consumers can then redeem the points and exercise their timeshare rights for accommodation through the respective club's reservation system and according to club or timeshare rules.

Working closely in association with the clubs are exchange companies, such as the Resorts Condominium International (RCI) and the Interval International (II), including re-sale companies such as Cape Escape and Travel Clubs. The latter offers discounted travel fares and accommodation to holidaymakers.

The exchange companies make it possible for consumers who own points to exchange them for access to holiday accommodation whenever and wherever they want; provided that they have the required points available, pay the required exchange fee and meet all and/or any other requirements of the exchange companies. Re-sale companies form an important part of the timeshare/vacation ownership set-up, in that they can rent or sell second-hand points on behalf of consumers.

From submissions made, it appears that there has been a major shift in the industry from fixed timeshare products, where a consumer could buy accommodation to access a specific interval at a specific resort, to points. The rationale put forward for this transition is the perceived flexibility of points, considering that the points are not linked to a specific location or time of year but can be redeemed for any holiday accommodation for any interval. The requirements for such redemption is that the member has sufficient points and complies with the rules of the clubs and exchange companies (if a swap is involved).

This having been said, consumers reported that they did not experience the same problems with timeshare as they do with the points system. One definitive change worth mentioning is that towards the end of the inquiry, there was a change from the insistence on keeping consumers on contracts in perpetuity to changing those contracts to term contracts in certain circumstances.

There is a great level of ambiguity and complexity in the VO/timeshare industry about who the actual suppliers of the services are. This is driven mainly by a fundamental misdirection that consumer transactions are concluded with clubs when in fact they contract with developers. Resulting from this, consumers look for redress from the clubs rather than from developers when they experience problems. Consumers’ activities looking to clubs to resolve their problems are based on the premise that the club exists to look after their interests. What further bedevils this is the complex inter-relational structure of the entities within one stable; the differing legal persons adopted by these entities for their operations; as well as their product differentiation.

Regulation of the industry has been evolving over the years. The Property Timesharing Control Act set the foundation in 1983, at a time when South Africa was in the grip of international isolation and antiapartheid resistance. After the advent of a democratic order and nearly 25 years later, the National Credit Act and to an extent the Consumer Protection Act, amongst others have in a convoluted and indirect way, put some fundamentals in place to potentially revolutionise and progress consumer protection in this industry.

Adequate regulation of the industry requires a bold decisive step and calls for a modern industry focussed comprehensive piece of legislation that centralises regulation in South Africa and brings consumer protection in the timeshare industry on par with the rest of the world. There is also a dire need for a new regulator to enforce compliance with existing and future legislation.

The Panel has done extensive research into practices internationally relating to consumer protection measures in the timeshare industry and has drawn on their experiences to enrich the recommendations in this report. The analysis of complaints by consumers led to the Panel identifying certain themes to facilitate the discussion of the relevant legal provisions, where relevant; the gaps in the law and/or their implementation and practices that have led to the development and continuation of serious challenges within the industry. This analysis will be used to explore the options to arrive at recommendations.

Recommendations have been developed according to the themes and laws identified during the Inquiry, as relevant to the subject matter. The focus was on laws that directly impact the business-to-consumer relationships and regulations promulgated in terms of those laws impacting the issues identified. The complete list of recommendations follows immediately after this executive summary.

The Panel was pleased that industry came to the party during the Inquiry and the need never arose for them to utilise subpoenas and similar instruments that the CPA makes provision for. Some of the progressive input and recommendations from industry have been incorporated into various portions of this report, including recommendations.

Attempts to diagnose problems plaguing the industry, including unravelling the architecture and relationships have hitherto been misdirected as a result of several factors. Amongst these is the fact that the clubs have been in the forefront, as the entity transacting with consumers, whereas on closer examination it is clearly not the case. From examining, amongst others, documents submitted, and submissions made, the Panel concluded that it is in fact the developer that fulfils the roles of marketer, advertiser, seller and credit provider, amongst others for the acquisition of points and timeshare. It is therefore submitted that regulatory attention and scrutiny should be turned to them.

Upon conclusion of the Inquiry process and having evaluated the balance of evidence and information before it, the Timeshare Inquiry Panel, made the recommendations below. They are categorised as short-term recommendations, and those which by their nature and intensity, are medium to long-term.

List of Acronyms

AGM=Annual General meeting

PTSCA = Property Time-Sharing Control Act, Act 75 of 1983

NCC = National Consumer Commission

CCSA = Competition Commission of South Africa

CIPC = Companies and Intellectual Property Commission

VO = Vacation Ownership

COI = Conflict of Interest

CGSO = Consumer Goods and Services Ombud, an Ombud’s service accredited in terms of section 82(6) of the Consumer Protection Act, Act 68 of 2008.

TI = Trade Industry

OBSSA = Ombudsman Scheme South Africa

LSSA = Law Society of South Africa

SAICA = South African Institute of Chartered Accountants

IRBA = Independent Board of Auditors

VOASA = Vacation Owners Association of South Africa

w,r,t = with regards to

 

Management of the Clubs.

 

Recommendation regarding the Management of Clubs.

The Clubs should take responsibility to ensure that their members are able to attend meetings, including AGMs;

Given that the Clubs have a national footprint, members in all nine provinces should have equal representation in the management of the Club. There can therefore be provincial structures representing members as this will promote member activism and alleviate possible abuse or excessive use of the proxy system;

Until complaints relating to alienation of consumers from running the affairs of the Clubs are stabilised or quelled, a rotation system on provincial lines, in terms of hosting of AGMs, should be introduced to engender fairness to members in terms of logistics; and

In all dealings between the Clubs and members, provision should be made for customer satisfaction surveys as a way of continuously measuring satisfaction with the products/services they offer. The contents of the surveys should be fed to the proposed industry regulator.

Recommendations w.r.t. annual increases of levies, fees and charges

Once the Minister designates a specific entity/regulator to enforce the PTSCA in terms of the proposed regulations, all complaints constituting transgressions in terms of the PTSCA, must be referred to such an entity or regulator, for action to be taken;

Once created or designated, such an entity/regulator should in consultation with other relevant regulators, investigate the Clubs practices in respect of the following:

Their quorum requirements; and

The use of proxies at general meetings, including Special general meetings and Annual general meetings, to ensure that members rights and interests are protected and safeguarded in relation to the determination of all and any forms of financial contributions to be made by the members.

Recommendation regarding Change of Rules of Clubs

The Panel recommends that the NCC consult with the relevant regulator/s to ensure that the members of the Clubs have access to and are placed in a position to influence decisions affecting their rights, responsibilities and the financial obligations imposed on them.

Recommendation with regard to complaints handling

The Panel recommends that the NCC consults with the relevant industry regulator in order for the relevant Code to be updated: and to include a provision, if it does not have it yet;

To oblige providers of goods and services to set up appropriate internal complaints mechanisms or be penalised in the event where consumers are not able to access complaints mechanisms within the supplier at a set timeframe.

Competition Issues

Recommendations regarding industry definition and make up The NCC should consult with the Competition Commission of South Africa (CCSA) to assess and determine the industry definition, its make-up and competitiveness within the industry.

Recommendation w.r.t competition and consumer protection matter

The NCC should approach the CCSA, the companies and Intellectual Property Commission (CIPC) to investigate the VO/timeshare industry for possible horizontal and vertical restrictive practices (focus areas of possible collusion amongst industry members, in terms and conditions of supply and product offerings, pricing, marketing, terms and conditions of cancellations, etc.).

Attention should also be given to possible conflict of interest (COI) emanating from overlapping club directorships and gate-keeping;

That a working group or committee comprising of the CCSA and the NCC, be established to oversee matters negatively impacting consumer rights and protection affecting the industry and device a plan/programme on how those matters will be addressed.

 

Marketing

 

Recommendations w.r.t invitation of potential members to presentations

 The practice of luring consumers through purported freebies e.g. holiday vouchers, motor vehicles, free flights and similar items should be discontinued.

A fair and automatic question raised with us as the Inquiry Panel which we cannot evade is what should become of the contracts which are either a progeny of, or, were concluded as a sequel to unfair marketing practices. In this regard, we recommend that consumers who allege this wrongdoing, be released from their contracts.

The NCC should belabour the intricacies or modalities of that and facilitate release of this group of consumers;

The technique of hoodwinking consumers using scratch cards as a representation of whether they have won holidays or prizes should also be proscribed/outlawed;

All presentations made to consumers in the course of marketing should be recorded (visual/audio) and copies be kept and archived, in accordance with the Archives Act. In the event of a dispute, the club should be obliged to produce the record;

The practice of requiring consumers to bring along credit cards to venues for marketing presentations should be outlawed and discontinued. Several consumers’ credit cards were swiped, and transactions processed against them under false pretexts.

Recommendation w.r.t. high pressure selling

The practice of inducing consumers into signing contracts under pressure, using the threat that “offers are valid for only today” or “bonus points are only available today” when in fact this is never the case, should be discontinued and outlawed/prohibited;

The NCC and the CGSO, in consultation with the industry should develop and produce a detailed statement of practice outlining the types of behaviour which should be regarded as pressure selling in timeshare;

That the detailed conduct in such a Statement of Practice should be incorporated into the proposed PTSCA regulations as an interim solution and be outlawed. When the proposed industry focused legislation is ultimately passed, the contents of the Statement of Practice should likewise be incorporated therein;

The proposed regulations should contain a prescript to all Clubs, making it compulsory that the entities within the Clubs’ domains should provide training courses to all timeshare marketing and sales personnel to ensure adherence to the law, the ‘Code of Ethics’ that are to be developed and avoid the use of pressure selling. In order to disincentivise the industry from either using unethical selling methods or benefiting from them, the regulations should further provide for a stiff penalty for crossing the ethical line;

Recommendations w.r.t. sales consultants/agents/external marketing companies

The industry, as an interim measure, should develop a ‘Code of Conduct’ for the VO / TI regulating the conduct of Sales Consultants/Agents and the Clubs they represent;

Such a code should be submitted to the NCC and ultimately, the Minister for accreditation;

All industry entities should arrange training courses and avail this to agents in order to promote adherence to law by the marketing and sales personnel;

All Clubs and entities within the Clubs’ domain should ensure that they provide training courses to all timeshare marketing and sales personnel to ensure adherence to the law, the Code of Ethics and to avoid pressure selling;

Projection or representation of holidays/incentives as investments should cease immediately

Recommendations w.r.t. agents

It is recommended that:

The NCC should investigate and act where the CPA had been contravened and refer matters relating to non-disclosure regulated under other laws to the relevant regulators for investigation;

NCC recommends the Minister to prescribe, in terms of section 27(3)(a) of the CPA, the information including the manner and form of delivery of any such information, that an intermediary, or different categories of intermediary must provide in terms of the section;

That as part of the code regulating the industry, a Code of Ethics be developed and prescribed for all agents to adhere to;

That as part of the code regulating the industry, agents undergo compulsory training and obtain accreditation authorising them to sell points and timeshare to consumers.

Recommendation w.r.t. sales to vulnerable groups

It is recommended that where sales have been made to various groups of vulnerable consumers and where the said consumers have allegedly been prejudiced, they should be released from their ensuing contracts. The NCC should facilitate such release.

Credit related complaints/matters

 

Recommendation w.r.t extension of credit/reckless credit to consumers:

 It is recommended that:

The NCC refer these complaints regarding alleged reckless credit to the National Credit Regulator to investigate;

NCC refers complaints relating to refusal to cancel credit agreements to the NCR to investigate;

The NCC does not entertain the cancellation proposal by the industry for credit agreements as it infringes the credit receivers’ statutory rights contained in the National Credit Act.

Recommendations w.r.t. non-disclosures:

It is recommended that:

Where there is alleged non-disclosure relating to a credit agreement, the NCC should refer such complaints to the NCR to investigate.

Recommendations w.r.t. contract management:

It is recommended that:

All timeshare contracts be deemed as Fixed Term Contracts, subject to renewal by agreement between the club/developer and the member. The limit should attach the Purchase of Points and Membership Application Agreements;

The rights accorded to consumers in terms of Section 14 of the CPA should apply automatically, in the event of a consumer cancelling;

It is recommended that by way of a regulation to be promulgated in terms of Section 12 of the PTSC Act, a coordinated, streamlined and simplified disclosure regime be provided for therein, in terms of information clubs/developers must disclose to potential members;

It is recommended that no valid contracts be concluded within a period to be specified on the proposed regulations, from when disclosures are made, in order to allow consumers to consider, digest and assimilate the said disclosures;

It be made obligatory that all consumers are provided with the concluded contract (signed by both parties) on the day of the sale;

The cooling-off period commences only once the last party has appended his/her signature to the contract and the contract has been delivered to the consumer and most importantly, once a consumer has received notification that their membership has been activated and membership number allocated;

Given the general complexity of the contract and due to the added complexity resulting from the incorporation by reference of the Clubs’ Constitution and Rules, and the multitude of prescribed disclosures, careful consideration should be given to the cooling-off period being extended for the consumer contracts.

Recommendations w.r.t cancellation of contracts:

It is recommended that:

The NCC should not entertain the cancellation proposal for both membership and credit agreements made by the industry, as they might constitute collusive behaviour for competitors to agree on contractual arrangements with their customers, such arrangements are a possible contravention of the Competition Act.

Recommendation w.r.t. PTSCA:

In order to address the issues raised in consumer complaints submitted to the NCC and also articulated during the public hearings, it is recommended that: -

The Minister of Trade and Industry (the Minister) considers delegating administration of the PTSCA to a regulatory authority which might include the NCC to administer and implement the PTSCA once the proposed amendments are affected, in order to give effect to its provisions to advance consumer protection;

The Minister promulgates regulations in terms of Section 12 of the PTSCA prescribing the information which should be disclosed in writing by a seller to a purchaser prior to the signature of any contract by a purchaser;

To overcome a game of “hide and seek” and the attempt to prevent consumers who are seeking to give a notice of cancellation within the cooling-off period, a provision ought to be prescribed by the Minister, in terms of section 12 of the PTSCA, for the Club to disclose an email address where notice of cancellation is deemed to be received once proof of remittance is provided;

The Minister promulgates regulations in terms of section 14(4) of the CPA, to specify the Purchase of Points and Membership Application Agreements entered into between consumers and Clubs as fixed term agreements.

Recommendations w.r.t. new piece of legislation:

It is recommended that:

A modern, industry focused, comprehensive piece of legislation that centralises regulation of the timeshare industry in South Africa be passed, in order to bring consumer protection in the timeshare/vacation ownership industry in our country on par with the rest of the world.

Recommendation w.r.t. creation of a new regulator:

It is recommended that:

A new regulator be created and tasked with enforcing compliance with existing and future legislation. The Panel has done extensive research into international practices relating to consumer protection measures in the timeshare industry and there is immense benefit to be obtained from benchmarking in jurisdictions that are trailblazers and purveyors in this regard.

 

Points in the vacation ownership/timeshare industry

 

Recommendations w.r.t. valuation of points:

As the Timeshare Inquiry Panel we recommend that:

At the point of sale, the seller should provide a clear and concise statement as part of its standard disclosures of the points’ value and the calculation behind it;

The disclosure should reflect/entail precisely the number of points required for an interval at the resort’s consumers may access shared holiday accommodation at;

The Clubs provide consumers with an annual valuation certificate for their points relative to the type of accommodation and the time of the year they can access that accommodation with their points.

Recommendation w.r.t. expiry and forfeiture of points:

It is recommended that;

Consumers be notified of the imminent lapse of their points and be refunded the money they paid towards the maintenance of the holiday accommodation the points are associated with;

In instances where a consumer could not secure holiday accommodation during any year, the consumer should pay a reduced levy/management fee;

In instances where a consumer is faced with the potential forfeiture of points due to non-availability of accommodation, those points should be carried forward until the consumer is able to secure holiday accommodation as per their contractual rights.

Recommendations w.r.t. cashing in and re-sale of points:

It is recommended that:

 A platform be created for cashing in, exchange and re-sale of points. Existing entities currently performing this critical role such as the Cape Escape, are tainted by their lack of independence from industry and the absence of known guidelines and methodology for valuation of points, to which consumers are privy;

This can be done in two phases, namely, immediately in terms of the regulations proposed to be passed in terms of Section 12 of the PTSCA and in the longer term, such a platform can be detailed in the proposed industry focused or specific legislation.

Recommendation w.r.t. liability of heirs for timeshare points

It is recommended that:

Where the heirs of a person who owns a timeshare or points are willing to accept the inheritance, the Club should be required to disclose the full terms and conditions of the inheritance. In addition, it should provide a detailed explanation of the obligations that flow from the inheritance, such as the following:

Management fees and/or levies payable;

The fact that there is no guarantee of availability of preferred accommodation upon bookings;

and

These terms and conditions should be written in bold font.

Quality of service/availability of accommodation

Recommendations w.r.t. availability of accommodation

It is recommended that:

The proposed industry regulator conducts periodic audits into holiday accommodation stock available in the South African markets. As well as audit the holiday accommodation that gets converted into points for sale to Club members or consumers and ensure that the Clubs always have the available holiday accommodation to service the points they sell or resell;

Although the scope of the proposed audits will certainly evolve, the current challenges around stock availability for sales vis-a-vis accommodation, requires that the proposed audits should:

Consider all points, sold or available for sale, relative to the movement (purchase and sale/acquisition and relinquishing of rights of access, by the Club, to shared holiday accommodation) in the holiday accommodation inventory;

Seek to ensure that all members are treated fairly in a non-discriminatory fashion and to ensure that Club rules do not operate to infringe consumers’ rights to access holiday accommodation their points and/timeshare entitle them to;

Provide assurance and independent oversight in respect of the Clubs membership, reservation and inventory management systems;

Within existing protocols or mechanisms, the NCC should engage with affected Clubs in order to address specific complaints from consumers and obtain redress.

Recommendations w.r.t. quality of accommodation;

It is recommended that:

As with all commercialised accommodation, the property subject to timeshare should be periodically evaluated and graded in order to ensure value for money. The Grading Council is best placed to perform this function and the NCC should engage with them in this regard;

Where a consumer cannot be accommodated in the facility of choice, the alternative or replacement should be of the same or commensurate standard as the originally booked facility Where specific complaints have already been lodged with the NCC, the latter should engage with the Department of Tourism or the Grading Council and the specific establishments against which complaints have been lodged, in order to identify and address systemic issues and obtain redress for the consumers.

 

Miscellaneous Matters

Recommendation w.r.t. confidential information;

It is recommended that:

The NCC engages with the relevant Ombudsman regarding possible violation of the POPI Act; 26. P

Recommendation w.r.t. debt collections and litigation:

It is recommended that:

Clauses in agreements entered between consumers and Clubs; consumers and developers, where consumers agree to consent to the jurisdiction of courts away from the consumer’s place of residence and employment be outlawed;

The NCC engages the various Clubs with regards to complaints as above described and seek immediate cessation of this conduct as it ostensibly flies in the face of Section 40 of the CPA and other applicable rules or prescripts of the jurisdiction;

Recommendation regarding abuse of bank accounts and debit orders:

The NCC should refer matters of this nature to the OBSSA.

 

Engagement with industry on existing Complaints

Recommendation w.r.t. existing consumer complaints

The NCC prioritises and urgently engages with the industry on a club-to-club basis regarding the commitments and concessions that they (clubs) made, vis-à-vis complaints lodged against them at the hearings that the Inquiry Panel held with them during November 2017 (over two days) and, February 2018 (over two days). This will hopefully ensure speedy recourse for consumers who currently have complaints lodged with the NCC;

Complaints that ideally require urgent intervention/engagement are those where consumers seek cancellation of their contracts, especially when the following occurred:

Questionable marketing/contracting practices used to hoodwink consumers into signing timeshare contracts, including:  

  1. Misrepresentation to consumers prior to conclusion of the contracts;
  2. Non-disclosure;
  3. Manipulation of the running of the cooling-off period;
  4. Failure to conduct affordability assessments.
  5. In the latter, the NCC should collaborate with the NCR. v. Contracts which have been running for more than the three years that industry themselves suggested as maximum tenure of Timeshare Agreements;
  6. Sales that were made to vulnerable groups of consumers with a view to immediately and unconditionally releasing them from the said contracts.

Recommendation w.r.t. consultation with various other regulatory entities

Besides engaging with industry as proposed above, the NCC should consult with the following other regulators depending on the nature of the matters reported against each club, with a view to jointly coming up with ultimate solutions to consumer complaints in the VO/timeshare industry:

Law Society of South Africa (LSSA), regarding alleged misconduct by lawyers/attorneys;

Estate Agency Affairs Board;

 Information Regulator, regarding matters of confidential information of consumers;

Debt Collectors Council, regarding dubious debt collecting methods and actions;

South African Revenue Services regarding the issuance of valuation certificates in respect of points;

Companies and Intellectual Property Commission, regarding the legal form of companies, reporting and compliance requirements in respect of the issues that were raised by consumers, where relevant;

Banking Council of SA and Banking Ombudsman, regarding alleged abuse of debit orders and credit cards;

Provincial Regulators and relevant Ombudsman Schemes with regard to complaints resolution in general;

SAICA and IRBA regarding responsibilities of Chartered Accountants vis-a-vis reporting, disclosure and compliance requirements of the entities they are appointed to as assurance providers; and x. The Competition Commission in respect of possible anti-competitive behaviour in that relevant market.

Recommendations w.r.t. proposed self-regulation mooted by VOASA:

It is recommended that:

An independent arbitrator or Ombudsman be set up for the industry with no ties or links at all to it, to resolve problems faced by consumers. The general view of consumers is that the VOASA driven self-regulation entity is biased and ineffective. This issue has been dealt with more elaborately later in the report.

Recommendations w.r.t. the effective enforcement of the proposed regulations and protection of timeshare industry consumers:

It is recommended that;

Closer interaction between the NCC and the Provincial Consumer Affairs Offices in terms of section 83 of the CPA;

Consumer education campaigns to ensure consumer awareness;

That the NCC should consider encouraging professional and trade associations to develop consumer protection codes to enforce quality standards designed to safeguard the interests of consumers;

That the proposed regulations and ultimately, industry specific legislation should address impediments to consumers’ access to the courts and enable them to approach the courts directly in respect of complaints of prohibited conduct;

Development of clear processes of complaints handling and handover between the NCC and the Ombudsman established in terms of section 82 of the CPA.

Recommendation w.r.t. unresolved complaints:

It is recommended that:

The NCC engages with consumers and update them as to what extent their complaints have in fact been resolved;

The NCC take the actions on board, recommended earlier in this report in connection with the specific issues raised where the complaints have not been resolved.