Caution needed again over holiday vouchers

Caution needed again over holiday vouchers

Consumers should exercise caution when approached by telemarketers selling vouchers for discounted or free holidays, hotels and flights, the Commerce Commission warned today.

“These types of schemes have been marketed in New Zealand for some years now. In our experience some are legitimate and others are not. We hope that highlighting these schemes will help educate consumers so that they can know the difference and avoid being taken in,”said Greg Allan, Commerce Commission Enforcement Manager, Wellington. “Once you have purchased vouchers, it can be very difficult to get your money back if they don’t deliver the benefits you expected.”

“The Commission is aware that some consumers have been recently contacted over the phone by businesses claiming to be selling vouchers or schemes for discounted accommodation in New Zealand and Australia,” said Mr Allan. “Some consumers have found that the vouchers cannot be used in all the places promised, while others are concerned that they have signed up for an ongoing membership that will be automatically renewed annually.”

“While there are legitimate companies offering vouchers that provide genuine discounts, any company selling vouchers that are not redeemable for the services that they claim risks breaching the Fair Trading Act,” said Mr Allan.

“It is understandable that people are attracted by offers that appear to make their holiday dollars go further, but before committing to any offers or giving credit card or bank account numbers it is worth taking the time to check that the vouchers will deliver what is promised,” said Mr Allan.

“While telemarketers can be persuasive and persistent, don’t feel pressured to make a decision straight away. Ask for details like which providers are involved in the voucher scheme and check independently before making any commitment to purchase. This can be as simple as finding out the names of hotels who are supposed to be involved and calling them to check if they will honour the vouchers.”

The Commission has previously warned consumers about telemarketed holiday and accommodation vouchers. The Commission has also taken successful court action against a group of Australian companies marketing a voucher programme in New Zealand.

If you have purchased vouchers for discounted hotels and believe that you have been misled, you can register your complaint via the Commission’s online form on www.comcom.govt.nz, by email contact@comcom.govt.nz or phone 0800 943 600. Background Discount Premium Holidays

In November 2007, the High Court issued an injunction prohibiting Discount Premium Holidays Limited (a New Zealand registered company that operated from Australia selling holiday vouchers in New Zealand), its director, and associated companies from making certain false and/or misleading representations about the cost and validity of their holiday voucher programme. The Court also required Discount Premium Holidays Limited to positively disclose certain facts to consumers, including the price of their vouchers in New Zealand dollars.

In December 2009, following a prosecution by the Commerce Commission, Discount Premium Holidays Limited pleaded guilty to 38 charges of breaching the Fair Trading Act. It was subsequently fined $209,000 in the Auckland District Court.

See www.comcom.govt.nz/media-releases/detail/2009/holiday-voucher-company-plea ds-guilty-to-fair-trading-act-breaches/

Only the courts can give an authoritative ruling as to whether conduct breaches the Fair Trading Act and award appropriate penalties. Criminal court action may result in fines of up to $60,000 per offence for an individual and $200,000 per offence for a company. Both a company and the individuals involved in a breach can be prosecuted by the Commerce Commission.

The Commerce Commission’s advice for consumers

Don’t be pressured into making a decision straight away. A legitimate company should not mind you taking the time to check. Make sure you know the name of the company that you are dealing with. Ask for contact details such as physical address and phone number. Write down the details of the businesses who are involved in the scheme. Before making a decision, ring and check that you can redeem vouchers with the named businesses.

Check whether there are any special terms and conditions you need to be aware of, for example, do you need to spend a certain amount or stay for a certain number of nights before you can redeem the vouchers.

Check what currency the payment amount is in – some charges have been in Australian dollars which means a higher cost than a payment in New Zealand dollars.

Check whether the payment is a one-off or whether you are signing up for an annual cost.

Don’t give your bank account details or credit card number unless you intend to purchase the vouchers.

If you don’t want to purchase the vouchers and the salesperson is being persistent – just hang up.

ENDS

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