Public Service Announcement: Beware of Timeshare Scams

June 12, 2010 at 3:34 am | Posted in But Seriously | 3 Comments

Hi folks. Thought I’d comment on this seeing as how I have had several encounters with people who were scammed by timeshares. This guide can also work for those who bought packages from beauty or spa companies.

First, not all timeshares are scams, but there are a lot out there that are on the shadier side. I’ve been to a few just to get an idea.

Second, this is merely my opinion, and it may not be a perfect one.

The Law Covering You
Consumers are covered by the Consumer Protection (Fair Trading) Act Cap.52A (Singapore Statutes) [You can obtain a hardcopy at Jurong Regional , Tampines Regional or Lee Kong Chian Reference Libraries under the Reference section, especially if you want to see the regulations]

The Second Schedule of the Act lists out many practices that are deemed unfair, but there can be other practices beyond those listed.

Section 4 of the Act states:
It is an unfair practice for a supplier, in relation to a consumer transaction —

(a) to do or say anything, or omit to do or say anything, if as a result a consumer might reasonably be deceived or misled;
(b) to make a false claim;
(c) to take advantage of a consumer if the supplier knows or ought reasonably to know that the consumer —
(i) is not in a position to protect his own interests; or
(ii) is not reasonably able to understand the character, nature, language or effect of the transaction or any matter related to the transaction;

Under the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations 2009 Reg. 4:
(1)   A regulated contract may not be enforced against the consumer at any time earlier than 5 days (excluding Saturdays, Sundays and public holidays) after —

(a)  the day on which the regulated contract is entered into; or
(b)  if the consumer information notice has not been brought to the attention of the consumer before or at the time when the regulated contract is entered into, the day on which the consumer information notice is subsequently brought to the attention of the consumer.

(6)   A consumer information notice shall inform the consumer of his right to cancel the contract under these Regulations and in particular shall contain the information specified in the First Schedule [ Ed: of the Regulation no the Act].

This means you have 5 days from receiving notice to cancel. If you cancel within those 5 days the contract is unenforceable.  I am not clear what it means to “bring to the attention of the consumer” the “consumer information notice.” Making you initial the notice without really explaining may or may not count as notice.

The Notice of Cancellation as laid out in the Regulation:

NOTICE OF CANCELLATION

UNDER THE CONSUMER PROTECTION (FAIR TRADING)
(CANCELLATION OF CONTRACTS) REGULATIONS

Supplier: (Insert name of supplier)
Reference: (Insert supplier’s reference number, code or other details to enable the transaction to be identified.)
I hereby give notice that I wish to cancel my contract referred to above under the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations.
Signature:
Date:
Name:
Address:
Telephone No.(optional):
Fax (optional):
E-mail (optional):

Before Going to Court
You might want to consider going to the Consumer Association of Singapore (CASE) before going to the courts.

  • I know CASE sometimes gets a bad rep, but remember CASE is not a government organisation even though it is in the news a lot. So be patient with them.

You can also consider going to a legal clinic for legal advice:

  • Law Society has a clinic 4 times a week (M to Th); they are not a government department so be nice
  • You can also ask your nearest CC. They sometimes have legal clinics as well, but usually once a month.

If you want to go to court make sure you have all your documents in order, especially the contract that you signed.

The Courts
Going to court costs money, so be prepared to pay

Small Claims Tribunal

  • Best place to go if you don’t want to engage lawyers
  • Court fees are lower
  • However the max. amount you can claim is $10,000 (which should be sufficient in most cases), $20,000 where both parties agree to the dispute
  • The filing process is the simplest and most rules of court are easy
  • All the information you need can be found on the website.

Magistrates’ and District Court

  • Magistrates’ Court Claims Limit is $60,000, District Court Claims Limit is $250,000
  • It is far more complicated process, and even inexperienced lawyers can get it wrong
  • Engaging a lawyer is not necessary, but is almost essential to getting it right
  • You will have to file the various documents yourself, if you don’t have a lawyer, and there are no standard forms.

If the SCT or MC or DC judgment is appealed against, it will almost certainly mean going to the High Court. That will cost even more time and money, and a lawyer will become almost a necessity (unless you have a lot of time on your hands to learn court procedure).

If you don’t have money to get a lawyer you can try the Legal Aid Bureau (Tel: 1800-325-1424), but there are requirement:

  • you have to be a Singapore Citizen or a Singapore Permanent Resident and is present in Singapore;
  • you have to satisfy the “Means Test” [Ed: click the link to find a Means Test]. Your disposable income, that is, your income for the past 12 months before the date of application for legal aid and after deducting prescribed allowances, must not exceed $10,000/-, and your disposable capital must not exceed $10,000/-; and
  • there must be merits in your case (the ”Merits Test”)

If you do not satisfy the Means Test but are facing hardship, the Director of Legal Aid may extend legal aid to you (subject to the requirements of the Merits Test) if:

  1. You satisfy certain statutory provisions; and
  2. It appears to him in his absolute discretion to be reasonable to do so to relieve hardship.

Some things to Note
Just say “No” to timeshare offers. While there are many legitimate timeshare companies who can provide us with discounted holidays, there are many more shady companies out there willing to exploit our greed for cheap holidays. Why go through all the headache to save a couple of bucks. These “investments” are not cheap at all, and even if they are legitimate, you may not use their services much in the end. Being tied to a long term contract that sounds good now, may not be so good 15 years down the road when your situation has changed (e.g. gotten richer, kids all grown up, too ill to travel, etc).

Also, law firms do not solicit for business. There have been so-called “law firm agencies” that claim to represent law firms. They are not representatives of any law firm. Approach them with caution. Find your own lawyers instead. If in doubt, call the Law Society to double check (Tel: 6538 2500).

I hope this guide has been useful. It’s just what I know and is not comprehensive. Hope it helps those who need it.

3 Comments »

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  1. Hi,
    Thanks for the info above! I was wondering if you could provide personal advice for my scenario:

    A few years back I started an acc with Emperor Resort. I only realised my mistakes a few weeks later. I have not paid a single cent after the initial downpayment. They kept calling me at first but I didn’t want to pay up.
    Last year I received a letter from Gurdip & Gill (lawyers) saying they will sue me if I did not pay up. (which I didn’t not bother) I received another one this couple of days and it set me thinking.

    What should I do? Should I respond to the lawyer group? Should I go to CASE? Should I just ignore? I’m getting worried since the amt has swell to 11k.

    For your advice.

    ZY

  2. Hi ZY, to my best knowledge you should approach CASE and see if they have any advice. You might want to speak with a lawyer at a legal clinic as well. Please see the section on “Before You Go to Court” for the links.

    Make sure you have all the documents with you, especially the contract.

  3. The timeshare industry keeps getting a bad reputation, and yet there are many people who still pay thousands of dollars for them. In fact, time shares are one of the top sellers in the hotel industry; however, that doesn’t make them a good purchase.


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