SINGAPORE: The government is tightening safeguards and plugging loopholes in the law to better protect consumers in timeshare deals.
The Ministry of Trade and Industry (MTI) said on Monday that it is making the changes because timeshare businesses continue to account for the most number of consumer complaints.
The number of timeshare cases totalled 389 in 2010 and 358 in 2011, according to the Consumers Association of Singapore.
MTI said an increasing number of businesses has moved from selling conventional timeshare —— which is the right to use a timeshare accommodation for a specified period —— to selling holiday club memberships.
These club memberships involve an advance payment for the right to obtain holiday benefits, such as discounted accommodation and airfares.
MTI said such holiday clubs essentially offer a similar product to timeshare, but they are not subject to the cooling—off period under the law as they do not fall under the current definition of "regulated contract".
Consumers are not given the opportunity to assess whether a holiday club can offer the purported discounts.
There is also a lack of transparency about important features in timeshare and holiday club contracts, including the rights of the consumer and the obligations of the timeshare seller.
Thus MTI is proposing changes to the Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations.
A key change is in the definition of "regulated contract". This will be expanded to include "long—term holiday product contracts" to close the current loophole where certain timeshare operators deliberately modify their business model to escape the requirements under the law.
This will also give consumers of holiday clubs the same protection as timeshare contracts, such as a five—day cooling—off period.
No money is to be collected during the cooling—off period. MTI said this will increase the protection and reduce the incentives for errant businesses to force a sale.
It will also remove the risk of losing, as well as the inconvenience of recovering the money paid, when consumers decide to cancel the deal during the cooling—off period.
Executive Director of Consumers Association of Singapore, Seah Seng Choon explained why there is a need to act on timeshare businesses.
Mr Seah said: "When they want to get out of the contract during the cooling—off period, they have great difficulty getting their money back and there’s always a delay in recovering the payment made. During the course of the time, some of these timeshare may just disappear or close and consumers may not be able to get their money back."
MTI wants to hear from the public and welcomes feedback and views over the next five weeks till March 1.
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