Event cancellations are at a high, be wary of advance bookings - Wendy Knowler

Event cancellations are at a high, be wary of advance bookings - Wendy Knowler

Event cancellations often lead to conflict between consumers and service providers, but right now, in the midst of a third wave of Covid-19, the fall-out is particularly devastating, as this week’s Consumerwatch case study reveals..


Cancellations, cancellations everywhere…

The third wave has prompted a fresh crop of cancellations of function bookings - weddings, birthdays and other celebrations. Many of the function venues are refusing to refund at all, when in terms of the Consumer Protection Act they are entitled to charge a “reasonable” cancellation penalty. The shift back to Level 3 last week meant that indoor functions are limited to 50 people, down from 70 before, but it is still possible for functions to go ahead.

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That wasn’t the case in Level 5 last year, when it was illegal for any functions to happen. That meant that technically, full refunds were due if the person who made the booking didn’t want to postpone the event. But now cancellations are voluntary on the part of consumers’, so the CPA’s “reasonable” cancellation penalties apply. 

Priyanka wrote to me about the booking she and her fiancé made with an Umhlanga function venue on June 11 for their wedding on July 15. They paid a deposit of R15 000. They cancelled just four days later, having had a change of heart, given the rapidly increasing Covid numbers, and decided to get married legally, without any form of reception, hence no need for the booking of a venue at any time. She’s been pointed to Section 19 of the company’s Ts and Cs:  "Should a cancellation occur, kindly note that all funds paid will be forfeited. Should the client wish to use the funds for an alternate date or function, 25% of the funds will be deducted as a postponement fee.” That’s illegal.

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There can never be a contract, irrespective of COVID-19, that carries a blanket no-refunds term. There has to be a sliding scale, ranging from a large to full refund if the cancellation happens shortly after being made, as in this case, to zero refund if the cancellation is made at the last minute. 

On Monday, the venue softened and offered to withhold 25% of the deposit as a cancellation fee, and refund the balance over three months. I contacted her and said that under the circumstances a 10% cancellation fee was more appropriate.
Her response revealed the extent to which the pandemic has been to the functions industry, forcing many company owners to choose between staying “alive” and complying with the CPA.

“Wendy, I understand that the lady in this particular case would obviously look at me in a very negative light.

“I just want you to take a few minutes to understand my position.
From March 2020 our entire lives turned upside down.
“We in the hospitality and events industry have been hit very hard. I lost my premises of seven years within seven months of the first lockdown.
“My landlord wanted his rent but eventually allowed us to walk out, owing him half a million Rand in unpaid rent.
“We lost everything - our cars were repossessed.
“At our current premises our landlord also expects his money.
“We have been struggling to even meet the set rentals as people are afraid to do large events.
“And now we are without present income ever since the third wave started. I know you say that the client’s deposit should not be used to keep the business afloat, but what other way do we pay rent , lights and water, month to month?
“The event payments are my only source of income.
“I must embarrassingly tell you that when this particular client paid me, I was in terrible arrears for the light and water accounts and put the money towards those payments.
“I never expected her to cancel her event because she literally came in the middle of the third wave and booked the event.
“It was an unexpected slap in the face when she suddenly cancelled and asked for her money back.
“And therefore I'm in such dire straits because how do I promise client a payment not knowing which day another bride will come in to book?
“I'm going discuss with her a payment arrangement and I'm hoping she will show some understanding.”

This is the reality. Events are a very risky business now, and for the forseeable future, for both consumers and venues. 
No-one has the luxury of being able to organise an event and know that it’s going to go ahead as planned. 
Bear this in mind when making paying any form of advance payment.

Wendy Knowler explains the incident further to Darren, Keri and Sky. 

Take a listen: 

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Tricking consumers into signing up for debt review

On Monday morning I got a call from a woman who said she was calling from Beltic Investments. 
“Do I have accounts and would I like to only pay half my current instalments?” she asked.
“Wow,” I said; “How fabulous! But how?”
“Our program does it,” she said. 
“Really?” I said. “Why would my credit providers agree to that? 

I, like many others, was not asked by that “advisor” if I was battling to pay my debts. When I kept asking what her “program” was all about, she confirmed my name and said her “senior advisor” would call me right away. 

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He didn’t, of course. I knew where that call was headed, as I researched and wrote about this tactic earlier this year - consumers agree to the “reduced” instalments, not realising that they’re actually agreeing to go under debt review, which means all their credit is frozen and they can’t get any new credit until they’ve paid off all the debts placed under their debt review.

To cancel, they have to repay the debt counsellor’s fee of up to R8000. When I contacted Beltic Investments for comment, I was told they are in the business of leads generation.
“We generate leads for various products and services for various stakeholders, including debt counsellors.
“Our employees are not equipped  or trained with the knowledge of a debt counselor or sales agent for debt review in this regard. 
Why then, did that agent tell me several times, in answer to my question about exactly how my installments would be slashed: “Our program does it”?

If your aim is to generate leads for debt counseling firms, or you’re a debt counsellor yourself, your opening question during a telesales call should be: “Are you overindebted/battling to pay all your debts?” or words to that effect.

Not: “Would you like to pay 50% less on your installments?”

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The National Credit Regulator (NCR) told me that it’s received 107 complaints from consumers alleging that they were placed under debt review without their consent. 

“The cases were referred to the National Consumer Tribunal; interdicts were issued and fines imposed.”
“We advise consumers to be vigilant, make use of our portal of register of registrants available on our website and not to trust or engage any company or person advertising debt review as a savings plan,” the NCR warns.
“Debt review is not meant for any other purpose other than to pay all credit providers what is due to them.
“Anyone who holds themselves out to the public to be a debt counsellor should be registered with the NCR. Only deal with debt counsellors who are registered.”
To find out if a person or company is registered with the NCR as a debt counsellor, go to www.ncr.org.za and click on Registrants.

Contact Wendy

Get in touch with Wendy via her website or her Facebook page. Please note that Wendy is not able to personally respond to every email she receives. If she is able to take up your case, she will contact you directly. Here are other avenues for you to consider.

Listen to more podcasts from Wendy Knowler in the Consumerwatch channel below: 

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