Customers scammed by timeshare-like contracts again?

PHOTO: Customers scammed by timeshare-like contracts again?

The employee promised to "save" customers stuck in timeshare-like contracts, for a fee.

But it seems that that promise was just bait to hook customers into spending more money on the company.

Customers forked out between $200 and $14,000 more, but said they ended up being stuck with bigger problems.

At least 11 people have complained to the Consumers Association of Singapore (Case) about the company, The Discovery Group, between February last year , when it was set up, and June.

Consultant Mark Lau, 31, was one of them. His headache started in 2008, when he filled in a survey while shopping at Orchard Road.

A phone call followed, then he sat through a sales pitch for "good deals" on airfare and hotels abroad, and forked out $5,000 in membership fees to a company called Discovery VIII, all on the same day.

"They urged me to sign up on the spot and said I would get a free trip to Krabi," Mr Lau said about the five-year membership.

"It was the complete package, including airfare, hotel, tour. I was swayed."

$1,000 e-voucher

But he did not get to claim the free trip, via a $1,000 e-voucher, because the prices of redemption items listed on the website "were just too exorbitant", said Mr Lau, who could not remember the exact pricing.

Headache number two followed in 2010, when he tried to book hotel rooms in Hong Kong.

The membership entitled him to a 70 per cent discount, but Discovery VIII staff quoted $300 for one night's stay.

"It was a crazy sum," Mr Lau said. He was so fed up, he did his own booking instead - for $150.

More headaches and heartache followed last June, when someone from The Discovery Group called him about "corporate restructuring".

Mr Lau went to the office, determined to end the agreement.

But staff persuaded him to transfer his membership to the parent firm and he inked a new agreement, worth $9,000. The bait this time: His membership would be rented to others, so Mr Lau would get his money back.

Mr Lau, who is single, jumped at what he thought would be a lifeline for recouping his investment.

"They said there would be three payments in all and promised it would cover all the money I had paid so far," he said.

He paid $4,000 upfront. The balance would be deducted over the next two years.

Regretting the move later that day, Mr Lau went to Case and found, to his horror, that there was little redress.

Since The Discovery Group is considered a "long-term holiday product" company rather than a timeshare one, it is not regulated under the Consumer Protection (Fair Trading) Act, Case told him.

Its executive director Seah Seng Choon said: "Case has urged authorities to include long-term holiday products under the Consumer Protection (Fair Trading)(Cancellation of Contracts) Regulations 2009, as they have operations similar to that of a timeshare company... This will further enhance protection for consumers under the law."

But for the layman, it can be difficult telling timeshare companies from "long-term holiday products" as they operate similarly.

Lawyer Luke Lee of Luke Lee & Co. said that for long-term holiday products, the difference lies in the customer selling his or her agreement to the parent company "so his interest is no longer in a timeshare contract, and therefore, he is out of the protection of the Act".

Mr Lee added: "I believe this is a way for old timeshare companies to exploit the loophole and get back in the business."

Mr Lau is resigned to his $9,000 loss - the equivalent of two months' pay. The third of four children is keeping mum over the matter, so his elderly parents will not fret.

Hoping his experience will prevent potential victims being snared, Mr Lau added: "It's been a very expensive lesson. There should be tighter controls over such companies. It'll be even better if timeshare-related firms can be phased out completely."

The New Paper also understands that more than 100 complaints were made against The Discovery Group - and predecessors like Discovery VIII - from as early as 2002.

Case sent out two alerts about the firm last June and October.

It also negotiated with the company to include a five-day cooling-off period for new customers.

But this did not apply to Mr Lau because he had signed up just before this was agreed upon.

A check with the Accounting and Corporate Regulatory Authority (Acra) showed Mr Lee Song Teck to be The Discovery Group's director.

Gold Guarantee

He is also the man behind defunct gold trading firm Gold Guarantee.

When TNP visited The Discovery Group's Boat Quay office address, the second-storey shop was shut. There was a sign with the name Gold Guarantee fixed to the wall. The place looked deserted, with dead leaves outside the glass door.

od restaurant said the office has been shut for more than two months.

When asked if Case was taking any action against the company director, Mr Seah said that Case was unable to do so as Mr Lee Song Teck has been uncontactable.

Lawyer Luke Lee recalled only one case when a timeshare company director was successfully prosecuted, in 2005.

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