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| Subject: TODAYonline, July 7, 2006 - A Timely Act, Timeshare industry needs regulation urgently | |
Author: ccn666 | [ Next Thread |
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] Date Posted: Fri, Jul 07 2006, 15:00:21 TODAYonline.com Voices July 7, 2006 A Timely Act -------------- Timeshare industry needs regulation urgently Letter from Marcus Yap Wern Ching http://www.todayonline.com/articles/129059.asp The timeshare business has been around for some time and, while it's not illegal, it is time its practices are reviewed by the authorities. Timeshare companies usually impose a hefty joining fee (possibly $20,000, or more). Hard-sell tactics and pressure usually result in consumers relenting on the spot and purchasing on impulse, only to regret later. I attended a timeshare sales pitch for almost three hours (as opposed to the promised 80 minutes), and was appalled by the way hard-sell tactics were employed, and the euphoria generated to entice others present to sign on. What was even more disturbing was this: Before an associate of the company started her sales pitch, I asked if it was a timeshare product and was assured that it was not. However, as the product was explained, it became clear that it fell under the definition of "time-share accommodation" under the Consumer Protection (Fair Trading) Act (CPFTA). To test the company's sincerity, I kept insisting that such products should not be bought on the spot - which resulted in them whittling down the product and fee to be paid, so as to induce me to sign a contract on the spot. The manager eventually gave up, saying he was "exhausted". There was no further mention of an option for me to return another day after due consideration to make the purchase. I was escorted to the exit. This has led me to consider the impact of the CPFTA on the timeshare industry. The CPFTA regulations allow for a three-day cooling off period after a purchase. But is this a sufficient level of protection? A lesson can be drawn from the Financial Advisers Act (FAA), which has benefited investors who wish to purchase products regulated under the Act. Guidelines address mandatory disclosure, limitations and disclaimers that must be presented to a potential investor. This has largely prevented a retail investor from parting with hard-earned savings without being able to make an informed decision, and representatives from promoting their products in unethical ways. The CPFTA, however, is not effective in this regard. It defines what amounts to "unfair practice", rather than prevents unfair practices by timeshare companies from the start. According to the Consumers Association of Singapore (Case) website, from March 1, 2004, to Feb 28 last year, complaints filed under the CPFTA pertaining to timeshare topped the list. Breach of contractual obligations or the service provided being not up to scratch only allows for civil remedies, since such breaches are not criminalised. An organisation such as the Commercial Affairs Department is unlikely to afford much recourse against timeshare companies employing undesirable tactics, while Case can only attempt to mitigate the situation through consumer education and dialogue with companies. This has led to some timeshare companies not thinking twice about the way they do business. Forking out $20,000 to buy timeshare rights is tantamount to putting money into a financial investment, so it is time for the timeshare industry to come under essential regulation, like the financial one. A Bill to regulate, among other things, required disclosure, limitations of rights, marketing methods, avenues for recourse and, most importantly, a thorough explanation of the contract to be entered, should be tabled. Alternatively, regulations could be amended or further regulations issued under the CPFTA to require all timeshare companies to sign a Voluntary Compliance Agreement. Penalties should be imposed for companies that attempt to make the cancellation process of contracts difficult (this being a common complaint), and money should be refunded within a stipulated period, and penalties against imposing unreasonable cancellation charges. Only with such measures in place would the timeshare industry operate to the benefit of companies and consumers. Caveat emptor exists, but steps need to be taken when the balance of fairness is unreasonably tilted to one end. [ Next Thread | Previous Thread | Next Message | Previous Message ] |