{"id":62203,"date":"2014-07-09T01:02:55","date_gmt":"2014-07-08T23:02:55","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=62203"},"modified":"2014-07-09T08:43:30","modified_gmt":"2014-07-09T06:43:30","slug":"the-inside-story-of-the-r699-car-scheme","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/62203\/the-inside-story-of-the-r699-car-scheme\/","title":{"rendered":"The inside story of the R699 car scheme"},"content":{"rendered":"<p>Warning signs about the imminent collapse of the R699 per month car deals were present months before the scheme reached breaking point.<\/p>\n<p>This is according to a number of scheme members who told MyBroadband that the Satinsky Group &#8211; the company behind the deals &#8211; had been calling them up trying to get them to move onto the group&#8217;s commission-based plan amid declining monthly earnings.<\/p>\n<p>The deal offered by Satinsky saw the group act as a motor dealership, offering branded cars with finance underwritten by South African banks, while subsidising monthly repayments through an advertising contract with Hong Kong based Blue Lakes Trading &amp; Promotions.<\/p>\n<p>Through these arrangements, buyers could effectively drive new cars from as little as R699 per month, depending on the model and contract signed.<\/p>\n<p>However, the business model for the deal exists in two packages:<\/p>\n<p>A mileage-based earn while you drive (EWYD) model, where scheme clients had to drive a certain amount of kilometers, and got paid monthly advertising fees accordingly; or<\/p>\n<p>A commission-based earn while you own (EWYO) model, where scheme clients would get paid R3,000 for every other person who signed up to the scheme using their unique code.<\/p>\n<p>At the start of July, Satinsky&#8217;s scheme with Blue Lakes as a partner broke down, leaving a lot of confused and angry clients on the EWYD drive model without their monthly earnings.<\/p>\n<p>The EWYO model, however, remains largely unaffected, still being available as an option from the group.<\/p>\n<h3 class=\"my-4\">Warning signs<\/h3>\n<p>Piecing the saga together retrospectively, it has become evident that the earn while you drive model was facing issues &#8211; even beyond those <a title=\"http:\/\/businesstech.co.za\/news\/general\/62271\/r699-cars-a-ponzi-scheme\/\" href=\"http:\/\/businesstech.co.za\/news\/general\/62271\/r699-cars-a-ponzi-scheme\/\">listed by vehicle and asset financer, WesBank<\/a>.<\/p>\n<p>A number of clients have also reported a consistent decline in earnings from the ad scheme over the past few months.<\/p>\n<p>From figures supplied by one user, it&#8217;s evident that the scheme had a lot of ups and downs (despite consistent kilometer levels traveled), with a sharp drop off since the start of the year.<\/p>\n<div id=\"attachment_62245\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><a  data-lightbox=\"post-image\" href=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/07\/Satinsky-earnings.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-62245\" class=\"wp-image-62245\" src=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/07\/Satinsky-earnings.png\" alt=\"Satinsky earnings\" width=\"600\" height=\"329\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/07\/Satinsky-earnings.png 868w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/07\/Satinsky-earnings-300x164.png 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><p id=\"caption-attachment-62245\" class=\"wp-caption-text\">Monthly earnings for one EWYD user travelling between 500-1000km a month<\/p><\/div>\n<p>Speaking to the Independent Group&#8217;s Consumer Watch, Satisnky CEO Albert Venter <a title=\"http:\/\/www.iol.co.za\/motoring\/industry-news\/r699-man-responds-late-in-the-day-1.1715255#.U7uS0rHlZ_Q\" href=\"http:\/\/www.iol.co.za\/motoring\/industry-news\/r699-man-responds-late-in-the-day-1.1715255#.U7uS0rHlZ_Q\" target=\"_blank\">effectively confirmed the issues<\/a>, responding to queries about the decline in advertising fees since the start of the year.<\/p>\n<p>However, the CEO blamed the declining fees on bad publicity and client fraud.<\/p>\n<p>\u201cA lot of bad publicity started happening,\u201d Venter told Consumer Watch. \u201cPeople started pulling their stickers off, and then sending us pre-dated photos to keep getting their fees, so we got fewer and fewer advertisers on board.\u201d<\/p>\n<p>More telling, however, was the group&#8217;s aggressive push to get clients off of the mileage-based contract &#8211; which started in 2013 already.<\/p>\n<p>A number of Satinsky clients told MyBroadband that the group played out an aggressive marketing push since late 2013 to get users to change from a EWYD contract to the EWYO contract.<\/p>\n<p>This push included SMSes, email marketing and phone calls &#8220;every other week&#8221; trying to convince clients that they were missing out on potential commission on the EWYO model.<\/p>\n<p>The marketing pitch involved clients being told they&#8217;re missing out on commission as an x-number of people had signed up to the scheme using their unique code.<\/p>\n<p>However, after querying details about possibly moving contracts, one client was told the transfer of contract to a EWYO model was one-way, with no option to transfer back to EWYD.<\/p>\n<h3 class=\"my-4\">Current options<\/h3>\n<p>According to Venter, the commission-based option of R3,000 per month per new client signed up still exists &#8211; something which was not communicated to existing clients at all.<br \/>\nThe new scheme would also see members punting other products like insurance.<\/p>\n<p>However, user accounts of this scheme are also not positive.<\/p>\n<p>According to another user, at least 3 people to his knowledge signed up for the scheme using his unique code as early as February &#8211; one SMSed in 4 times in a week &#8211; yet none of them received call backs on the deal.<\/p>\n<p>No call backs, no signing up, no commission. Similar reports have also surfaced elsewhere.<\/p>\n<div id=\"attachment_62241\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><a  data-lightbox=\"post-image\" href=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/07\/Accelerator-rewards-option.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-62241\" class=\"wp-image-62241\" src=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/07\/Accelerator-rewards-option.png\" alt=\"Accelerator rewards option\" width=\"600\" height=\"264\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/07\/Accelerator-rewards-option.png 717w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2014\/07\/Accelerator-rewards-option-300x132.png 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><p id=\"caption-attachment-62241\" class=\"wp-caption-text\">Accelerator rewards option<\/p><\/div>\n<p>The other option is the rewards scheme &#8211; a Satinsky-owned scheme called Accelerator Rewards &#8211; which offers discounts and vouchers.<\/p>\n<p>According to Venter, over 4,000 people have signed up to the Accelerator Rewards scheme.<\/p>\n<p>\u201cIf we can get 7,000 people signed up for this rewards programme, we\u2019ll have the biggest car sales force in the country,\u201d Venter reportedly said.<\/p>\n<p>&#8220;We should have engaged more effectively with our customers,&#8221; Venter told Consumer Watch. &#8220;Lack of communication was the one mistake I made.\u201d<\/p>\n<h3 class=\"my-4\">More on consumers<\/h3>\n<p><strong><a title=\"Permalink to R699pm car business falls apart: report\" href=\"http:\/\/businesstech.co.za\/news\/general\/61895\/r699pm-car-business-falls-apart-report\/\" rel=\"bookmark\">R699pm car business falls apart: report<\/a><\/strong><\/p>\n<p><strong><a title=\"Permalink to SA consumers brace for July price shock\" href=\"http:\/\/businesstech.co.za\/news\/general\/61729\/sa-consumers-brace-for-july-price-shock\/\" rel=\"bookmark\">SA consumers brace for July price shock<\/a><\/strong><\/p>\n<p><strong><a title=\"Permalink to More petrol pain for consumers\" href=\"http:\/\/businesstech.co.za\/news\/general\/55021\/more-petrol-pain-for-consumers\/\" rel=\"bookmark\">More petrol pain for consumers<\/a><\/strong><\/p>\n<p><strong><a title=\"Permalink to E-tolls pushing consumers over the edge\" href=\"http:\/\/businesstech.co.za\/news\/general\/54982\/e-tolls-pushing-consumers-over-the-edge\/\" rel=\"bookmark\">E-tolls pushing consumers over the edge<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Warning signs about the imminent collapse of the R699 per month car deals were present months before the scheme reached breaking point.<\/p>\n","protected":false},"author":14,"featured_media":61897,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[26,8335,8337],"class_list":["post-62203","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trending","tag-headline","tag-r699-car","tag-satinsky"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/62203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=62203"}],"version-history":[{"count":10,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/62203\/revisions"}],"predecessor-version":[{"id":62329,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/62203\/revisions\/62329"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/61897"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=62203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=62203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=62203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}