A rise in rogue rental agents is putting the timeshare rental sector at risk of becoming the industry’s ‘Wild West’.
Timeshare owners are at risk of being taken advantage of by unscrupulous agents who do not adhere to an industry Code of Conduct, as done by VOASA members. These so-called ‘agents’ are people without the relevant qualifications, knowledge or understanding of the timeshare rental process and are taking advantage of the increasing demand for rentals by owners trying to sell and/or struggling to pay their annual levies.
To gain a first-hand understanding of the situation, we engaged with the following VOASA members: Paul Edkins at Quality Time Marketing and GoMelo; Peter Pienaar at Southern Sun Resorts; Nicky McCulloch at Cape Escape Resales and Rentals; Peter Edmondson at TravTrust Investments and Tony Forbes at the Beekman Group.
QUESTION: How are rogue agents impacting the reputation of the timeshare industry?
Paul Edkins: We have experienced a myriad of issues from members not receiving their promised rental money, to over promising rental returns as well as fraudulent confirmations being circulated. We have also found that these ‘agents’ copy our resort material and post it on their social media and marketing pages to entice sales without consent. They are devaluing our product, negatively impacting the rental market, making false promises to members, and creating general negativity which results in cancellation requests.
Peter Pienaar: We are very concerned about agents who are not registered, and the list of these agents seems to grow by the week. We do not deal with these ‘agents’ directly and only accept instructions related to re-sales and rental enquiries from the timeshare owners themselves.
Nicky McCulloch: This is a very real problem as any ‘Auntie’ with WhatsApp and a Facebook page can instantly become a timeshare rental ‘specialist’. The problems we have encountered are:
• Paying for the rental upfront and no control of what the owner/other agent does with the week.
• Thinking all resorts are the same and not understanding the resort check-in procedures.
• Not having the correct admin procedures in place, especially if there is a problem, such as a cancellation or double booking.
• Not getting guest certificates issued from the resort/club and instead making their own which creates chaos at the reception for check-in.
• The renting of RCI, SunSwop or Club bookings – which is not permitted.
• Working the reservation systems to their sole advantage, knowing what stock is released when and having multiple profiles to maximise reservation access.
• Having a “friend” on the inside to book the stock they need.
• Thinking its easy money and that they can make a ‘quick buck’.
Peter Edmondson: We mostly come across rogue agents who sell second-hand points. WhatsApp is the ‘enemy’ here as it provides a platform for these operators to bargain emergency rates with their clientele – which undermines our value proposition and mandate.
Tony Forbes: Primarily we are concerned about ‘agents’ who offer deals that are too good to be true. The rental prices seen advertised are well below reasonable market rates, well below membership fee or levy values, and simply leave the client very unhappy that they have been “conned” having given the ‘agent’ access to their online booking passwords. This undermines the value of timeshare. Typically, these rogue ‘agents’ are not registered with EAAB or run any professional system – such as a Trust account – and quite often cause ‘double bookings’ that leave a family at the reception check-in without a booking. Furthermore, the poor online reviews are then leveraged at the resort or Club involved, which once again is detrimental to reputation of our industry.
QUESTION: What is the modus operandi of these ‘agents’?
Paul Edkins: They source their weeks from timeshare/points owners who are possibly unhappy or in financial stress and then promise to rent their bookings to derive income to pay their levies. In some cases, the weeks are rented, but the monies never pass to the timeshare/points owners which creates problems and negativity. In some cases, the portion that passes to the owner is low due to high commissions charged. Some of these agents also get power of attorney on members’ files and then make bookings on their behalf, at times without the owner/member knowing. They also forge/copy confirmation letters of members and then sell them twice to members of the public and then pass the problem onto the resort, club or member in question.
Nicky McCulloch: They get the weeks from Facebook pages, other rental agents, their own or family / friends’ points memberships and contacts within the Clubs. We have noticed that there are large communities who work with these so-called rental agents to support each other. They buy the weeks in and pay upfront for the rentals to secure the stock. The rental prices for ‘freelance agents’ are less than the market average as they don’t have any overheads, so they are happy with a R200 – R500 commission.
QUESTION: What are your thoughts on how to address the problem of rogue agents in order to protect the reputation of the industry?
Paul Edkins: Any rental ‘agent’ wanting to rent out on behalf of members should be mandated to work with that club / entity / rental company to ensure their promises and prices are in line with industry norms. We should also notify our shareholders of known rogue agents. The legitimate agents who work for their members should be members of VOASA or an industry partner that has ‘vetted them’ as such.
Nicky McCulloch: We are very selective who we work with and have strict procedures with our rentals to ensure all parties involved are protected. If they don’t or can’t follow our way of working, we don’t do business with them. The professional agents stick together to protect the industry that we have invested our careers in. We know it’s the long-term relationships we create with our clients, and the expert advice and guidance we offer them, that makes the difference. We encourage clients to do their ‘homework’ and to ask the right questions – such as proof of an FFC, bank accounts in the company name as well as referrals from the managing agents or their resort.
Peter Edmondson: Legislative compliance measures need to be applied, awareness campaigns need to be communicated to owners and the disciplining of industry insiders who are operating as rogue agents need to be undertaken. There are a lot of people trying to develop and grow ‘side hustles’ and I think we are going to see more individuals leaving their ‘lanes’ to dabble in activities that can generate extra income. I fear that this will include competing with their own employers and that we should be looking out for manifestations of this problem.
Peter Pienaar: We do not provide timeshare owners’ information to outside parties without that party presenting a mandate to show that they are acting on behalf of the owner. We’re very aware of the need to protect timeshare owners’ information and the implications of not doing so. We have no problem dealing with EAAB / PPRA accredited agents acting on behalf of our timeshare owners, but they also need to adhere to certain requirements so that we are fulfilling our obligation of protecting information. The definition of a “property practitioner” in the Property Practitioners Act leaves very little room for ‘rogue rental agents’ to manoeuvre and will hopefully close the loophole that allows a person to sell and rent timeshare without an FFC or being a registered agent.