To anyone who works in the consumer protection field in SA, the words Vacation Hub International (VHI) will be all too familiar.
The Somerset West-based “membership-based wholesale travel club” sells its product – a contract involving an upfront sum of several thousand followed by a monthly fee for two years – at presentations held around the country.
They invite people to attend by contacting them personally, which makes their business model a direct marketing one.
The best thing about agreeing to buy something that is a result of direct marketing is that the Consumer Protection Act (CPA) gives you a five-business-day cooling off period in which to cancel – for no particular reason – and get a full refund within 15 business days.
In theory anyway.
Sadly, many companies go to great lengths to deprive you of that right to cancel, and VHI is one of them.
The two main allegations are that VHI makes misleading claims at their presentations to get people to sign up, and then denies them their right to cancel within the five-day cooling off period.
“The company insists that the cancellation should be in writing and delivered within the five-day cooling off period to the address as stated in the contract,” consumer goods and services ombudsman Magauta Mphahlele told me earlier this year.
“So they are creating a situation which makes it near impossible to cancel agreements, because if you decide on day four that you want to cancel, it will be impossible to get your written cancellation to them within a day.
“If you send it by registered post it takes a few days to deliver, so their defence is always they did not receive the cancellation in time, even though the complainant submitted proof that he posted the cancellation within the required period.
“They do not accept e-mail as proof of cancellation, as they are of the opinion that the complainant could have fabricated the date on the e-mail, and they deny ever receiving the e-mail.”
At the time, the ombud’s office was able to provide some redress to the VHI complainants who complained to its office in just less than half the cases, some of which included cancellations.
Muriel Uys, who contacted me earlier this month about her inability to cancel her VHI contract without paying a hefty penalty, is a typical case.
She attended a VHI presentation at the Glenvista Country Club in late September, having been invited to receive a free holiday.
She was persuaded to part with R9,199 to join the club, with about R1,600 payable monthly for 24 months, mainly because of VHI’s promise to sell her Holiday Club points for her.
But when she discovered that was not true, she decided to cancel, being well within the CPA’s cooling off period.
And then she experienced the “cancel if you can” game that VHI has played with so many others.
“First I called them; they said I couldn’t cancel yet as they hadn’t received my signed contract from the agent who signed me up.”
That’s a stalling tactic that has been used on many others who have tried to cancel within the cooling off period.
Uys found two e-mail addresses online, and e-mailed her cancellation request to both of them, but received no acknowledgement.
Then she sent a registered letter, having discovered that VHI didn’t acknowledge cancellation notifications that weren’t delivered to its headquarters.
But VHI still insisted she could only cancel if she paid a hefty cancellation fee – 50% of the outstanding balance of the remainder of the 24-month fixed-term period.
Trudie Broekmann Attorneys of Cape Town have sent cancellation letters on behalf of seven disgruntled clients to VHI due to their misleading direct marketing and refusal to accept cancellation of the contracts.
On its website, VHI says it offers its members discounts on holiday accommodation, and its contract puts those savings on rack rates at between 10% and 65%.
“But this has not been the case for my clients,” Broekmann said.
One of them has paid VHI just more than R39,000, but to date has saved less than R2,400 in discounts.
As for VHI’s highly prescriptive cancellation policies, Broekmann said in terms of the CPA’s Section 16, a consumer was simply required to notify the supplier of cancellation of the contract in writing or another recorded manner and form.
“That includes e-mail, a hand-delivered letter, SMS, fax, WhatsApp message, voice note, or by phone where the phone call is being recorded as a sound file.”
In the case of one of her clients, VHI refused to cancel the contract without penalty because his registered letter was only collected from the post office by VHI six days after the contract was signed, thus a day after the five-day cooling-off period had expired.
In response to the letters Broekmann has sent to VHI on behalf of her clients, VHI’s legal representatives, Onyx Group Holdings, have responded by simply denying any breach of the CPA and insisting her clients pay cancellation penalties ranging from more than R5,000 to just under R75,000.
Broekmann intends helping her clients submit a complaint to the NCC, requesting the maximum fine under the CPA – R1m or 10 % of VHI’s turnover – as well as seeking relief via the courts.
Early this year, Hannelie Jacobs, VHI’s member services manager, told me the company had “thousands of employees, hundreds of departments and 35,000 active, satisfied members”.
I invited those members to contact me and tell me just how active and satisfied they are, but so far, not one has done so.
The offer stands.
The good news is that the National Consumer Commission recently completed its extensive investigation into the company’s activities.
“We’ve forwarded the report to our prosecutor for further investigation,” NCC spokesperson Trevor Hattingh told me last week...