Holiday clubbed?

I’m on holiday as I write this. Away from home for a few days, enjoying the silence of the bush, enhanced only by the sound of kids playing and the occasional cork being removed from a bottle of wine.

But not everyone has such a positive experience on holiday. In fact some holiday ideas can turn out to be nightmares.

We’ve reported several times in the past on various holiday club schemes that have plagued consumers, causing them emotional trauma and significant financial hardship.

Most holiday clubs are effectively mobile timeshare schemes. You buy points that you can later spend on holidays at the locations they offer. Superficially this is a perfectly acceptable concept. There’s nothing wrong, in principle, with a timeshare concept. It’s just a shame that almost always it turns out to be oversold, a con or a scam.

The information timeshare salespeople provide is full of pictures of glamorous locations, sandy beaches and glorious sunsets being watched by happy, beautiful people. It’s very seductive. Very often you’ll meet the salespeople when you’re already on holiday in the place of your dreams, knowing in the back of your mind how expensive it all is. You’ll be sitting there with a fancy cool drink with a little umbrella with your loved one, fantasising about spending more time in such a beautiful place. That’s then the creepy salesman creeps out from beneath his creepy rock.

How would you like to come here more often he’ll ask? All you need do is sign up for our scheme and pay a simple annual fee you can choose from a range of beautiful places like this and come as often as you choose. After another of those fancy drinks you’re in a presentation surrounded by other happy smiling people who all want a bit of the holiday action as well. Before you know it you’ve signed on the dotted line and they’ve got you.

That’s when the victims often begin to realise that they’ve been suckered.

Where to start?

To begin with these holiday club schemes are based on a false premise. They’re not a cheap way of taking a holiday. When we’ve actually looked at the details we’ve almost always found that they’re no cheaper than going to your friendly local travel agents and asking what last-minute specials they have on offer. You’d be surprised at the bargains they’ll offer at the last minute. They’re certainly cheaper than the financial commitment demanded by holiday clubs.

Even the initial sales job is often deceptive. I’ve heard of cases when everyone else in that presentation was in the pay of the timeshare scheme, just there to help catch one victim. They certainly make enough money to pay everyone some commission.

Even the holidays they actually offer you are disappointing. Very often the locations you want aren’t available at the times you need. Public and school holidays are either not available, require you to spend more points than other times of the year or they’re simply booked way ahead of schedule by other people. There was a case in the USA that finally reached the courts some years ago when it emerged that all the prime slots in the calendar were reserved as bonuses for the sales team. The victims, sorry, members never stood a chance of getting them.

Then there are the contracts you sign with these schemes. A few years ago we received a series of silly legal threats from The Holiday Club promising us legal action when we reported on their “irrevocable” contracts. These contracts, the victims were told, were for life. There was no way to cancel them, not once a 5-day “cooling off” period had expired. Of course a 5-day opportunity to change your mind is next to useless. That 5-day period almost certainly expires before you get home and let reality sink in. I saw one contract that required any change of mind to be submitted, in writing, to an address in KwaZulu Natal within the 5-day period. Effectively the cooling off period was impossible to use.

Even when customers wanted to cancel their membership at a later date and even when they were prepared to waive the membership fees they had paid, all the annual fees and the points they earned, they were told they could only cancel the contract with the permission of the Club. Needless to say this permission was remarkably slow to arrive.

Of course the threats we received came to nothing because we’d only reported the facts. Yet again bullying tactics didn’t work.

Since then we’ve reported on a variety of similar schemes but the problems were often the same. Just last week we heard from a reader who had a problem with a company called Holiday Access. It began with problem actually paying them but when things became so complicated and he decided to cancel his membership he was apparently told that he’d signed a 3-year contract and there was no way to cancel it. He was warned that if he stopped paying they’d set their lawyers on him. This is despite him having had absolutely no benefit from the scheme since he joined.

I think it’s simple. The benefits of these clubs are either non-existent or marginal. The contractual conditions are often incredibly one-sided and exploitative. The costs are often excessive. Why would you want to burden yourself with such an obligation?

If you want a decent holiday I think the last thing you want is a holiday timeshare scheme.

This week’s stars

• Korabo at Orange at the Bus Rank in Gaborone who our reader says is a “shining star who went above and beyond the call of duty to keep me as a customer”.

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

[These are the highlights of a very long email we received.]

I bought a bed at a furniture store in Molepolole in 2010 October. After 3 weeks when I was asleep the bed made a funny noise when I turned and it sinks in the middle. Everyday I wake up I am tired with backaches because I have to sleep in the middle and it is sunken.

I reported the problem to the shop before December and they promised to exchange it. Even though I have paid for delivery initially they expected me to transport the two beds for myself (the one from my house and the exchange one). We discussed the issue but later the manager promised to deliver for me but only after a week as their delivering van is elsewhere. Weeks passed with no delivery. In December I called them I asked them to let me transport the bed for myself and the manager agreed but she later called me to tell me that their boss has ordered them to wait and not let me transport it for myself as she will be coming the following Monday.

On the Christmas week I called them reminding them that I am still waiting and to my surprise they told me that they aren’t offering exchanges as they have limited stock.

[This is where the email gets very long. The store gave her a range of excuses about having no stock, the manager explaining that so many beds have “gone wrong” that they don’t have any replacements.]

In April I learnt from a friend who also has the same problem that the shop is now closed and it’s advertised for rent. She told me she called the manager and she told her that they have closed the Molepolole branch and only left with Gaborone and Kanye branches. I tried to call the manager but didn’t pick the phone.

I called the store owner and we had a long chat and she explained her problems with suppliers, the shortage of replacement beds she was facing and also that she had tried to fix the problem on several occasions but that there had been some communication problems between them and the customer.

I suggested that she and the customer have a quick chat on the phone and within minutes I was receiving messages saying the problem has been resolved, a new bed will be with her the following day.

The lesson is that sometimes communications break down, misunderstandings develop and then people become angry. That’s when it’s sometimes useful to turn to us as a neutral outsider. Despite what people often think we don’t always take sides. Although I sometimes love a good fight I much prefer it when a consumer and a supplier sort out a problem on good terms.

Holiday club woes

We’ve heard from another consumer who has had problems with holiday clubs. This time it’s another South African one calling itself Holiday Access. He says:

“Last year May I went for a conference in Durban where I was approached by the Holiday Access Sales Agents (I think). Because I had always wanted to sign up for a holiday club package I went to listen to the Holiday Access presentation and I was quite impressed with it. To that effect, I signed up for a 3 year membership package amounting to R6,500. I then made an initial payment of R1,000 through swiping a debit card. From then I signed a debit order of R229 for the next 24 months.”

That’s when it started to go wrong. To begin with there were endless problems trying to set up a direct debit across the border. He started to pay them the fees in cash over the counter but that incurred enormous additional bank charges. Eventually he decided that enough was enough and he wanted out. That’s when they insisted he had signed a 3-year contract and that there was no way out of it. He says that the last person at Holiday Access he spoke to said that:

“if I terminate she will have to hand over the process to her bosses who will hand over to their lawyers to take legal action against me.”

We’ve heard of this so often with holiday clubs and it seems like this bunch are no different to the others. They trap you in to a contract they claim you can’t escape and they really, really want your money.

So what’s our advice regarding holiday clubs?

Steer clear of them. They’re not even a very good way of taking holidays. They give you little flexibility, there are huge restrictions on when you can go on holiday, where you can go and, most importantly, they only provide accommodation. They don’t pay for your transport, food, drink or entertainment. You are much better off going to your local travel agent and finding what amazing special deals they have on offer.

If you do a quick search of other consumer web sites (Holiday Access, Flexi Club, Holiday Club) you’ll see that we’re not the only ones warning people about holiday clubs. If you fancy some amusement you can also see some of the threatening letters we got last time as well as our very polite letters back to them suggesting where they could stick their silly threats.

Who can help?

Who can you turn to for help when things go wrong, when you’ve been abused, when you’re unhappy or when you think your rights have been ignored?

Well, there’s good news and there’s bad news. You can have the bad news first.

You can’t rely on the Government to help you. In fact it’s the Public Service you can’t rely on. Government are very good at debating things at length, concluding that action is required and finally passing laws but that’s all they can do. It’s the Public Service who are then tasked with enforcing the law. It’s the Police that are meant to stop us from driving like lunatics with a death-wish, it’s the Ministry of Health who are meant to stop charlatans from claiming that they are doctors who practice a form of so-called traditional medicine and it’s the Consumer Protection Unit who are meant to protect consumers from the more flagrant breaches of the Consumer Protection Regulations.

It’s just a shame that none of these bodies seem to do any of these things. For once I don’t think we need to see statistics to show that they are failing us. Think about it. If the Police were actually serious about doing something about the dreadful quality of driving we simply wouldn’t see combi and BX drivers driving like homicidal maniacs because they were be too afraid to do so. If there was a real risk of being stopped and hassled by the cops if they went through a red light then they wouldn’t do it.

If the regulators of health claims were serious then you simply wouldn’t see advertisements from crooked so-called “traditional doctor” charlatans because they would be too afraid to advertise their illegal and dangerous concoctions.

If the Consumer Protection Unit was a real threat to stores that held Batswana in complete contempt then we wouldn’t see furniture stores being supremely arrogant and ignoring the laws relating to store credit and attempting to deceive consumers about their charges. We wouldn’t see holiday clubs forcing people to continue their membership until their dying day because they have them trapped in lifetime contracts. Contracts that are, in my humble, non-legally-trained, but well-advised opinion, illegal, immoral and an insult to their victims.

If our regulators were worth their cost then we would see them actually doing something rather than just reading the Daily News and surfing the web all day.

A quick bit of good news is that we do now have a regulator that isn’t afraid to regulate. The admittedly horribly named Non-Bank Financial Industry Regulatory Authority appears to be a regulator that isn’t afraid to regulate. It seems that every week there’s a notice in the newspapers from NBFIRA warning us that some disreputable insurance broker is no longer registered and that we shouldn’t use their services. That’s what regulators are there for. A regulator that doesn’t regulate is a waste of space and money. Regulators that don’t actually regulate should be closed down and the money should be saved and instead given to me to spend on wine, women and song. At least I’d be happy with the spending, I’m not at the moment.

The good news is that there ARE people you can call on when you feel wronged or abused.

No, for once I’m not going to praise us at Consumer Watchdog. No, while I think we can offer support and solutions (and all entirely for free), this time I mean someone else.

I mean you.

The consumer him or herself is the most powerful enforcer of rights. You might not have legal powers to enforce the law but you have something much more useful, a very effective weapon for controlling the behaviour of suppliers. Our money. Those suppliers desperately need our money. Particularly these days when the international economy is in decline, they are going to be even more desperate to part us from our money.

Of course in hard times the sensible suppliers will offer us discounts, easier repayment terms or perhaps even a free something extra to tempt us to buy from them rather than the store next door.

The less scrupulous scumbags will be the ones that try sneakier ways of getting our cash. No, let me correct that. Some of them are that sneaky already. The stores that refuse to obey the law and disclose the full cost of buying an item on credit before you buy, as the law requires, don’t need to get any sneakier, they are sneaky enough already. The clubs that don’t tell you that it’s a lifetime contract before you sign it are crooked enough. The cellphone stores that claim they don’t offer a warranty just because they feel like it are abusing us already. None of these groups of thugs needs to get any worse in order to classify as “sneaky”.

I think that the next couple of years might be some of the best times for consumers. Sure, we’re all going to need to tighten our belts a bit, be a little more prudent and do as our parents told us when we were growing up but the balance of power is going to shift slightly. It’s going to shift in our favour. Suppliers are going to have to try a lot harder to attract us.

We consumers might soon have the power to put a couple of the sneakier companies out of business. We might be able to get our own back on the suppliers that have abused us. Wouldn’t that be fun?

This week’s stars

• Tapiwa and Tirelo, both from Aon Botswana for service above and beyond the call of duty and for “proving that it can be done”.

Be a skeptic

There has never been a better time to be a skeptic. With an avalanche of scam artists, some very shady stores selling on credit, the usual dodgy loan sharks and the looming financial crisis this is a time to start using our brains rather than just our emotions.

This is a time to use our critical thinking skills and not believe things just because someone says they’re true. This is a time to be a skeptic. There’s certainly no shortage of things to be skeptical about.

Holiday Clubs

No, not necessarily The Holiday Club, I mean ANY holiday club. I mean any so-called club that has a clause in the contract that says you can never leave the club. Any club that requires a lifetime membership and annual fees for the rest of your existence is not to be trusted, particularly if they don’t tell you about it BEFORE you sign the contract.

Why would they do this? Well, it might be a mistake of course but isn’t it more likely that it’s a plan to hook you in and then not let you go?

Holiday clubs are also not even worth the money most of the time. There are suggestions that it’s not even a particularly cheap way to take holidays. The last-minute deals offered by travel agents are often much cheaper. Couple that with the massive restrictions holiday clubs place on when you can take your holidays and you have to wonder why anyone would join.

Pyramid self-improvement schemes

Success University is the obvious example of this. They claim to be a mechanism for helping you get your hands on miraculous self-improvement DVDs, tapes and the like. In fact they’re a pyramid-selling scheme. What they really want you to do is join their pyramid and to start hiring people beneath you. With promises of vast riches it’s no wonder people find the idea appealing.

But it’s all nonsense. Nobody is ever going to make a fortune in a pyramid scheme other than the crooks at the top. Their money-making scheme is based entirely on the gullibility of the people beneath them in the pyramid.

I’m not the only one who think Success University is a pyramid selling scheme. In Namibia they’ve been outlawed because of the way they do their business.

And finally, why on earth do they call themselves a university when they’re not a university? Isn’t that a big clue that they are not what they claim?

They aren’t the only ones of course. Just last week I came across another scheme called “Be Motivated Today”. This is based in South Africa and also promises “wealth and financial freedom”, all from “passive income”, “earning money without having to work for it”. They are curiously vague about how exactly you are meant to do this but once you do some digging you quickly find out that they are a Success University clone. To make the mythical sums they mention you have to start recruiting other victims.

Pyramid selling schemes don’t work and you should avoid them.

Dodgy churches

It’s not just the so-called Church of Scientology that is primarily interested in money rather than salvation. We’ve all read the stories of often foreign-run independent little churches that have started in Botswana and have very quickly awarded their preachers top of the range 4x4s, flashy suits and jewellery. Just like a pyramid scheme they offer the impossible, demand cash up front and more often than not end up leaving the country in a hurry, often persued by their creditors, their “customers” and the Police.

Micro-lenders

Consumer Watchdog went to the recent workshop where the Non-Bank Financial Industry Regulatory Authority launched their new proposed rules governing micro-lenders. Unbelievably during a questions session a micro-lender stood up and attempted to defend the practice of taking customer’s ATM cards and PIN numbers so they could be sure to get their money back. Staggering I know, but at least the authorities put him in his place. In case anyone doesn’t know where I stand on the matter let me make it clear. Loan sharks who take ATM cards and PIN numbers from customers are crooks and scumbags. Simple enough?

Customer service gurus

A couple of weeks ago I was rather scathing about the travelling customer service experts who travel the world, telling us how we can deliver the very best service, how they know best and how much we should pay them for dispensing their wisdom.

Well, I’m told that the latest visiting expert at his big function repeatedly used the phrase “here in Tanzania” throughout his presentations. This is the same guy who on his web site proudly announces his work in “Bostwana”.

How much more evidence do we need to conclude that these travelling gurus offer nothing new? In fact I don’t think they offer anything old either. All they offer is words, the same words we’ve all heard before, the same as in their overpriced books.

Did you go to hear this guy speak? Did you hear him get confused about the country who was hosting his royal visit? Let me know what you thought!

This week’s stars

• Piet in the pharmacy at the Gaborone Private Hospital for outstanding service. Our reader says he is committed, always friendly and very helpful.
• Greg and the team at the Walmont Ambassador (yeah, I know we all think of it as the Grand Palm Hotel) for looking after visitors

A holiday from abuse?

We all need a holiday occasionally, but perhaps what we need more is a holiday from being abused by holiday clubs.

Yes, we’ve had another problem reported to us about holiday clubs. Before a certain company gets angry and threatens us with all sorts of legal nastiness again, I don’t mean “The Holiday Club” specifically, I mean holiday clubs in general.

Just to refresh your memory, in 2007 we reported on the problems various consumers had reported to us regarding a company called Suntide, who trade as "The Holiday Club". The problem they had was that once they had joined they weren’t permitted to leave. The contract they signed was “irrevocable”, something they could never cancel. We reported on the facts that were reported to us and commented that we felt it was unfair never to allow consumers to terminate a contract, even when they had paid everything they owed. That is just unreasonable. You can close a bank account, you can terminate a lease, you can even end your marriage if you follow some basic procedures and settle your debts. So why couldn’t you terminate a contract with The Holiday Club, that’s what we wanted to know.

So what was their reaction? They instructed their lawyers to send us a variety of threatening letters saying we had defamed them, interfered with their freedom to operate and that we had accused them of being cruel to cute, furry little animals.

Of course we hadn’t done any of these things. We wrote back to them on various occasions and told them to get a grip and leave us alone. Which they did, we didn’t hear from them again.

Now we’ve had another complaint, this time about another holiday club. This time it’s a company called Flexi-Club. The problem goes like this. While on holiday in South Africa a few months ago a couple, presumably after a few of those brightly-coloured drinks with the little umbrellas, were sweet-talked into signing a Flexi-Club membership application. In fact, they signed a 1-year credit agreement to buy the initial membership.

Remember how these clubs work. You pay an initial membership fee that includes a number of points that dictates the value of the holidays you can take. You then pay an annual fee that is dictated by the club for the on-going maintenance of your membership.

The problem that this consumer faced was that once they got back home from their holiday they realised that that had hopelessly over-extended themselves. Along with bond repayments, food, school fees and everything else they simply couldn’t afford the membership. They phoned Flexi-Club, emailed them, wrote to them and faxed them, sent them blood and other bodily fluid samples, pleading with Flexi-Club to let them change their minds. No such luck.

Of course it’s true that they DID voluntarily sign a contract. Nobody held a gun to their heads, they weren’t in fear for their lives. What’s more the credit agreement they signed to pay the initial membership fee did, in fact, have a cancellation clause. OK, a perfectly useless cancellation clause. It says that they can change their minds but only within 5 business days and only if they did so in writing. Which of course was useless because they were on holiday at the time. The cancellation clause also doesn’t count if they signed the agreement at Flexi-Club’s office.

So the problem is that once you sign the contract you’re committed and there’s little chance you can get out of it. However, then there is the other problem. Nowhere in the contract and regulations that the consumer was given does it describe how they can change their minds after they’ve paid the membership fee. There’s no obvious way they can terminate their membership of this “Club”. That’s the problem with holiday clubs in general. They all appear to be lifetime commitments and that’s wrong. It’s particularly wrong as they rarely, if ever, tell you this before you sign the contract. You only find this out when you change your mind later.

That was the problem with The Holiday Club and it seems to be the same with Flexi-Club. It’s very easy to get caught but very difficult, if not impossible, to escape.

We contacted Flexi-Club to ask about how members can leave but they have treated us the same way they treated the consumer who contacted us. We’ve been ignored.

So what’s our advice regarding holiday clubs?

Steer clear of them. They’re not even a very good way of taking holidays. They give you little flexibility, there are huge restrictions on when you can go on holiday, where you can go and, most importantly, they only provide accommodation. They don’t pay for your transport, food, drink or entertainment. You are much better off going to your local travel agent and finding what amazing special deals they have on offer.

If you do a quick search of other consumer advocacy web site you’ll see that we are not the only ones warning people about holiday clubs in general and certain clubs in particular. You can see some links to these reports on our web site. If you fancy some amusement you can also see some of the threatening letters we got last time as well as our very polite letters back to them suggesting where they could stick their silly threats.

This week’s stars

• Khumo at Air Botswana yet again for outstanding customer care, for energy and dedication.
• Willem and the entire team at Cafe Dijo for running an incredibly friendly restaurant.