The Consumer Goods and Services Ombudsman (CGSO) recently dealt with a complainant who booked a dream holiday rental in Cape Town over the December holidays at the height of the Western Cape’s water crisis.
The booking was made online, with the advert showing a luxury property – including a dazzling blue pool – at a cost of R135,770 for 10 days.
Uppon arrival at the holiday rental, the complainant found that the property bore very little resemblance to the photographs posted in the advert and was – allegedly – uninhabitable, causing the complainant to seek alternative holiday accommodation.
On lodging a complaint with the booking agent, the complainant was given a 35.5% refund amounting to R48,237.37.
When the rental agent refused to refund the balance, the complainant approached the CGSO office to seek redress for the remaining R87,533.37 on the basis that the advertisement was misleading and that had they known the true state of the property, they would not have booked it.
In response to the complaint, the supplier said that they were unwilling to refund any additional amount as the guests allegedly voluntarily departed without giving them an opportunity to address the issues highlighted.
They also disagreed that the property was uninhabitable and that the complainant had signed a Rentals Reservation Agreement which states that ‘for bookings cancelled less than 30 days from arrival date a cancellation fee of 100% of the rental is charged’.
They further argued that the complainant signed an indemnity clause which states that the owner of the property could not be held responsible for any loss, damage or injury which the tenant may directly or indirectly suffer.
Lastly, the supplier’s attorneys argued that the booking was not cancelled due to any breach, but on the alleged unilateral decision of the guests to relocate. This was done less than 30 days from arrival and they were therefore liable for 100% of the total rental.
What the law says
According to the CGSO, Section 29 of the Consumer Protection Act (CPA) provides consumers with the right to fair and responsible marketing.
“In essence, Section 29 prohibits marketing which is misleading, fraudulent or deceptive, or which is conducted in a manner that is likely to imply a false or misleading representation concerning goods or services,” it said.
Section 29 of the CPA should also be read in conjunction with various other sections of the Act:
- Section 3(1)(d) which states that it is a purpose of the Act to protect consumers from unconscionable, unfair, unreasonable, unjust or otherwise improper trade practices;
- Section 4(5)(b), which contains a general prohibition on engaging in conduct that is unconscionable, misleading or deceptive, or that is reasonably likely to mislead or deceive when dealing with a consumer in the ordinary course of the supplier’s business;
- Section 40, which protects the consumer against unconscionable conduct including in connection with the marketing of goods and services;
- Section 41, which explains what false, misleading or deceptive representations for the purposes of the Act are;
- Section 48(2)(c), which provides that a transaction, an agreement, a term or condition of a transaction or agreement or a notice to which a term and condition is purportedly subject, is unfair, unreasonable or unjust if- the consumer relied on a false, misleading or deceptive representation, as contemplated in Section 41;
- Section 51(1)(a), (b) and (g), which prohibits a supplier from contracting out of the CPA or depriving consumers of their rights in terms of the CPA;
- Section 54, which gives consumers the right to demand quality services.
“Based on the photographs in the marketing material and the actual photographs submitted by the complainant, there is clearly a vast difference as to how the property was represented to the complainant versus what the complainant found upon arrival,” the CGSO said.
“While we take note of the supplier’s efforts to advise customers of the effects the drought may have on pools and gardens, the fact remains that the general up-keep of the property was lacking.
“Further, if one considers the amount paid by the complainant for the accommodation, a reasonable person would have expected the property to be in mint condition (as per the marketing photographs) and not in a state of disrepair, including a peeling fence, a broken pool cover, an unkempt garden and clutter in the house.”
As such, it found that the supplier did not comply with S29 of the CPA.
It also found that:
- Under Section 54 of the CPA, a consumer has a choice between a refund and cancellation. Therefore, a complainant is not obligated to first allow a supplier to remedy the quality issues if they prefer a refund;
- The complainant had a common-law right to cancel.
“Due to the misleading marketing of the property we are of the view that the complainant was entitled to cancel the agreement and obtain a full refund,” the CGSO said.
It recommended that the supplier refund the difference of the amount paid and the amount already refunded – namely R87,532.63.
The complainant however indicated that they would be satisfied with a refund of R55 000, being the difference between the amounts paid for the two sets of accommodations.
After considering the CGSO’s recommendation, the supplier offered to refund 50% of the amount claimed by the complainant – R27,500 – which they accepted taking the total refunded amount to R75,737.37.