Last year, disgruntled consumers lodged a record 21,591 complaints with the Consumers Association of Singapore - and timeshare schemes were the No. 1 culprit. Lorna Tan highlights some of the cases involved.

EARLY last year, Singapore's consumer watchdog argued that tougher laws should be imposed on timeshare firms, whose clients pay big money for memberships that allow them to use holiday resorts around the globe.

Extend the cooling-off period during which consumers can back out of these deals from three to 10 days, the Consumers Association of Singapore (Case) said.

One year on, complaints against these firms have again grabbed the spotlight. Timeshare schemes topped the list of grievances cited by consumers last year. Of the 21,591 complaints received by Case last year, 2,456 were related to these firms.

Next on the list were deals related to motor vehicles, with 1,700 complaints.

Case says timeshare disputes are usually resolved when consumers are able to get total or partial refunds or to terminate their contracts.

Grievance No. 1: Timeshare deals

Most common traps

UNDER these deals, members pay $10,000 to $50,000 to enjoy lifetime memberships at holiday resorts around the world. A typical membership allows the member to enjoy a week's stay at a resort of his or her choice in return for a small administrative fee.

But many people who sign up for such deals end up quickly regretting the decision. Some sign up in haste only to realise that they do not really need the service.

Others are like information technology professional James Low, 41, who discovered too late that there were nasty strings attached to the deal - like an annual maintenance fee. When he tried to get out of the contract, he was told that there was no termination clause.

'I was upset when I realised that I could not terminate the contract. Worse still, the contract did not stipulate a cap on the annual maintenance fee,' he said.

He paid $17,000 for his timeshare in 1999 and another $7,000 to upgrade his membership in 2003. The annual fee came to about A$400 (S$499.80).

In the end, he never made use of his membership at all because he realised that the minimum one-week stay did not fit his vacation needs.

'I wasn't keen as I prefer shorter getaways,' he said.

Escape hatch

To make matters worse, many consumers do not know about the three-day cooling-off period, so they do not even realise they can back out of the timeshare deal if they change their minds within that period.

During this time, firms are supposed to give consumers a refund if they wish to cancel the contract.

Most disgruntled timeshare owners simply want to end their contracts and stop paying.

New soft-sell tactics

Case executive director Seah Seng Choon said: 'Consumers' main grouses against timeshare peddlers arise from the hard-sell tactics and misleading claims that the companies resort to when pushing their products.'

However, these days, soft-sell tactics seem to be popular as well.

The plot has thickened with the emergence of timeshare-related firms that claim they can sell, lease or terminate existing timeshare deals, and even provide a money-back guarantee.

Some offer a 'free off-loading service' where they find someone else to take over the deal, if customers purchase a privilege card, which can cost thousands of dollars. They also claim to have lawyers who can assist the customers in terminating timeshare agreements.

In the case of Mr Low, he paid $17,000 last year to timeshare firm ABC - not its real name - which claimed it would engage legal aid to organise a class action suit to terminate his timeshare and get a refund for him.

When he realised that ABC's contract did not have a termination clause, he contacted Case, which managed to recover $14,000 for him. Still disgruntled, he approached the Small Claims Tribunal and managed to recover another $1,500.

But he is still stuck with his timeshare membership and having to pay annual fees.

It is no wonder that, for the past six years, complaints against these firms have headed the list compiled by Singapore's consumer watchdog. And these complaints show no signs of easing.

In another case, Madam Diana Chan, 52, received a call from XYZ, which offered to terminate or offload her timeshare membership for a fee.

'It sounded appealing as I thought I would be able to recover the cost and terminate the timeshare since the membership was of no use to me.'

She had paid a $24,000 membership fee.

She then entered into an agreement that would cost her $10,000. She paid an initial $3,000 and arranged to pay the balance in regular instalments.

However, she later found out that she was actually purchasing XYZ's privilege card, which comes with dining privileges, rather than paying for the termination of her timeshare.

She wanted to end this second agreement and demanded a $3,000 refund. To date, that has not been forthcoming.

Grievance No. 2: Car-related deals

Most common traps

THE number of motor vehicle related complaints has shot up dramatically, rising from 1,227 in 2006 to 1,700 last year.

Most of these involved misrepresentation and unsatisfactory service.

In the excitement of buying a new car, some customers willingly sign blank loan application forms, only to discover later that their interests have not been safeguarded.

Take, for instance, technician Daryl Poh - not his real name - who signed an agreement with a distributor to buy a Toyota Corolla worth $14,000. The firm claimed there would be no hidden costs.

Mr Poh was asked to sign on a blank loan application form.

When he received the hire purchase agreement, he found that it was for a $14,800 loan.

The firm then explained that an extra $2,200 was payable for loan processing and administrative fees. However, this had not been highlighted to him upfront.

The manager proposed paying $1,675 on Mr Poh's behalf for the 44th to 48th instalments, in a bid to offset the processing fees. Mr Poh refused and wanted the company to offset the fees during the first five instalments instead.

How to protect yourself

Said Mr Seah: 'Consumers must learn to protect their own interests by not signing blank forms as such actions open up opportunities for shady dealers to fill in figures that are not agreed on upfront.

'Such practices should not be encouraged as they allow dealers to take advantage of consumers. Consumers should insist that the forms be filled up before they sign them. Always retain a copy for your own reference if at all possible.'

Mr Seah also suggested that customers should insist on writing into the contract any verbal agreements or concessions - for example, if a refund was promised, what delivery date was agreed on and what parts or accessories were offered to sweeten the deal.

Overall, the number of consumer complaints lodged with Case has increased, by 1,416 or about 7 per cent between 2006 and last year.

» Tips on buying into timeshare schemes

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