S'pore clamps down on dodgy timeshare projects
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Singapore is tightening its rules on timeshare businesses, which are still among the worst offenders when it comes to consumer complaints.
Proposed changes to the Consumer Protection (Fair Trading) Act will prevent such companies from collecting money from buyers during the mandatory five-day cooling-off period.
The law could also be extended to cover long-term holiday club memberships – products offered recently by timeshare operators to dodge regulations.
These were among the changes put forward in a public consultation paper issued yesterday by the Ministry of Trade and Industry (MTI), which also amended the law in 2009 to protect timeshare consumers.
Then, the cooling-off period for consumers to cancel their timeshare contracts was extended from three to five days. Sellers were also required to refund customers within 60 days of such cancellations.
In timesharing, customers pay between 5,000 and 25,000 Singapore dollars (about Bt120,600 and Bt600,000) up front, in return for a fixed number of holiday stays over several years.
But the industry has continued to draw flak for its hard-sell tactics and broken promises. In some instances, buyers were unable to make bookings due to overselling by companies. In other cases, the resort simply did not exist.
Between 2004 and 2009, timeshare companies accounted for over 2,000 complaints each year, the highest number received by the Consumers Association of Singapore (Case) from any industry.
This dropped to 2,001 (second highest) in 2010 and 1,458 (third highest) in 2011, only to rise again to 1,870 (fourth highest) last year.
Case executive director Seah Seng Choon puts the recent rise down to timeshare operators changing their business models to sell “holiday club memberships”.
“We hope the amendment will close this loophole,” he said, adding that holiday clubs collect pre-payments for memberships that give buyers discounted accommodation and airfares.
Businesses have also been side-stepping the rules by being uncontactable during the cooling-off period, delaying refunds or simply shutting down.
Under the latest proposed amendments, timeshare and holiday club sellers are required to give consumers the necessary tools to make an informed decision on the first day.
This could include log-in passwords for online platforms that tell buyers how many other people have signed up for the same deal, or how much holiday time has been sold.
The changes will also make it compulsory for timeshare and holiday club sellers to hand product information documents (PIDs) to buyers before contracts are signed. These will cover details like additional costs and cancellation rights.
The original five-day cooling-off period will be extended by a further three months if a PID is not issued.
But the proposed changes are cold comfort to Julie Peh, 51, who has lost S$13,000 so far in two timeshare deals that promised stays at five-star hotels and travel discounts.
In both cases, the companies involved closed down without giving her refunds or the stays that she paid for.
“All these companies keep coming up with new tactics,” she said. “If customers don’t know their rights, then these laws won’t work.”
Feedback and views on the amendments can be sent to the MTI from now till March 1.
