'R699' car deal implodes
July 4 2014 at 07:25am
By Wendy Knowler
http://www.iol.co.za/motoring/industry-n...7ay6JSSwhU
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Johannesburg - The Satinsky Group has dropped a bombshell on its “New Car from R699 per month” clients - said to number more than 17 000 countrywide - by announcing that the monthly advertising fees they rely on to meet their repayments to the bank have come to an end.
Most were already jittery because in recent months their fees - paid in exchange for the car owners plastering giant advertising stickers on their back windows and doing relatively high mileages every month - have dropped dramatically.
Many Satinsky clients went from being paid more than R1000 a month in fees in February to R570, then R484 and then, this month, not a cent.
On a Facebook page which some 500 “victims” of the scheme have joined, there is talk of taking legal action against Satinsky for breach of contract; some have posted photos of their advertising stickers, with additions such as “scam”; and one man has suggested that they drive their cars to a specific “field” in each province as a form of public protest.
DELUGE OF QUERIES
Faced with a deluge of queries from angry, bewildered clients in the months leading up to this week’s “Game Over” announcement, Satinsky has consistently quoted a clause from the contract which states that “Advertising fees may vary/fluctuate from month to month…” and refused to comment further.
Before they took possession of their shiny new wheels, having paid no deposit, clients were made to sign two contracts: one with a bank, making them solely liable for the full instalment over six years, and a second contract with Blue Lakes Trading & Promotions of Hong Kong, in terms of which they would get paid for turning their cars into mobile billboards.
Satinsky insists that Blue Lakes is a separate company, and that they merely acted as a “managing agent” for Blue Lakes in South Africa.
ALTERNATIVE OFFERING
On Tuesday, the day many Satinsky clients realised they hadn’t been paid a cent for June, Satinsky announced to them that it had dissolved the “management agreement” between itself and Blue Lakes and that it had found “a suitable alternative offering”, having appointed Accelerator Rewards (Pty) Ltd as its “valued partner”.
But all they stand to get from a referral, sent via smartphone, which leads to a car sale are “points and discount vouchers”.
There is little enthusiasm for the new deal, and many have removed their car stickers.
“We don’t need points, or discounts, we need the cash,” said one. “That’s the reason we took the original deal.”
Asked to comment, Satinsky spokesman Siyanda Zulu would only say: “At this stage we are engaging with all stakeholders and clients. As a result, we reserve our right to comment at a later stage.”
Satinsky’s legal adviser, Craig Thompson, said the company would meet face to face with The Star next week to discuss all the issues.
The banks which have financed these cars - Absa, Nedbank’s Motor Finance Corporation and Standard Bank - insist, along with Satinsky, that the applicants’ affordability was assessed based on their income and expenses alone; the anticipated Blue Lakes fee was not taken into account.
‘ADVERTISING SERVICE PROVIDERS’
But many of the car owners - most of whom earn between R6000 and R10 000 a month - claim they cannot afford the full car repayments without the “subsidy” in the form of the advertising fee.
“I’ve had people literally crying on the phone to me today,” said Ayob Mungalee, of the People Seeking Justice Action Group.
Allegations have been made on the Facebook page that applicants’ declared monthly expenses total was lowered in order for the applications to be successful.
Mungalee said he had spoken to about 120 people from poor communities in Mayfair, Eldorado Park and Soweto who had bought these cars, and nobody could afford the repayments without the advertising fee.
National Consumer Commissioner Ebrahim Mohamed said that because those who had signed the Blue Lakes contracts are “advertising service providers”, rather than consumers within the context of the Consumer Protection Act, they don’t benefit from the act’s protections.
The Star
'R699' car deal owners in despair
June 23 2014 at 08:50am
By Wendy Knowler
http://www.iol.co.za/motoring/industry-n...7azH5SSwhU
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Durban - To thousands of South Africans, the “Drive a new car for R699 a month” deal seemed like the perfect solution to their “want a new car but can’t afford it” dilemma.
You get a new car, with a 100 percent loan from a bank, making you responsible for the full repayment amount every month, but you offset that expense by signing a second contract with Hong Kong-based Blue Lakes Trading and Promotions, in terms of which you get paid a sizeable amount every month in exchange for turning your car’s back window into an in-your-face moving billboard advertisement, mostly for the scheme itself.
The Satinsky group of companies owns Drive Car Sales, the company driving the unique car ownership model throughout South Africa. Satinsky is also the management agent for Blue Lakes Trading and Promotions and operates Blue Lakes’ help desk in the country.
TWO DEALS ON OFFER
Earn While You Own: The car owner, referred to as the “advertising service provider” (ASP) must drive at least 500km a month to earn R570. If a car is sold from the unique code on their car’s back window, they are rewarded with R3000.
Earn While You Drive: The ASP is compensated on a sliding scale, linked to the kilometres they drive in a particular month, with the advertising fee being calculated as a percentage of the repayment amount for the car. If they drive more than 2000km in a month, they get 100 percent of the repayment for that month.
Both options require owners to submit photos of their vehicles, taken at specific angles and at specific times of the month.
There are third party advertisers, who are said to pay the advertising fee, but most of the cars seem to advertise only the scheme.
HARD TO BUDGET
While the monthly repayment that goes to the financing bank is fixed – subject to interest rate fluctuations, of course – the amount they can expect from Blue Lakes, via Satinsky, is not.
This makes it hard for a person on a fixed budget to meet their financial commitments.
Because of this, many opted for the second option, as they have more control over their monthly mileage than whether or not someone will respond to the advert on their car.
On its own, R570 isn’t much of a subsidy when it comes to a car repayment. And there are other risks.
The contract states that the payment will stop altogether should the car be in for repair or “overhauled at any stage” during the period of agreement.
Plus, there’s this: “Payment will be suspended while there is any pending Advertising Services Authority or dispute between the company and/or any associate company as (sic) the ASP.”
I presume by “Advertising Services Authority” they are referring to the “Advertising Standards Authority”, and the last bit should read “dispute between the company and/or any associate company and the ASP”.
So, raise a dispute with the company, and your payment could just stop.
And there’s more. Clause 4.10 reads: “This agreement will terminate in the event that the ASP places any derogatory statement in the media and/or on the vehicle and/or in any social network system regarding the company and/or any company associated with the company.”
Well, either the many people, from students to pensioners, who’ve spoken to journalists, commented online, or posted on Facebook recently haven’t read that clause of the contracts, or are willing to take the risk.
Perhaps that risk hasn’t paid off for some of them.
Moneyweb reported in April that: “Other complaints centre on contracts being cancelled for no reason and without warning.”
While some claim to be doing well out of their contracts, they are vastly outnumbered by those who have reported to be bitterly disappointed, and suffering terribly financially.
THE BIGGEST COMPLAINT
They’ve complained of many things, but it would seem that the common thread among many who opted for Option 2 – Earn While You Drive – is that while it worked well for them initially, they have since been unilaterally switched from Option 2 to 1.
From March or April – and even earlier in some cases, they suddenly got paid R570, instead of an amount double or triple that, depending on their mileage for the month.
And when they complain in the only way they can – via an e-mail to the Blue Lakes SA help desk (run by Satinsky) – they all appear to be getting the identical cut-and-paste response, often only weeks later, which goes: “Please note that all payments effected are done so in terms of the terms and conditions of your advertising agreement. Kindly refer to the terms and conditions as set out on the Blue Lakes/Just Group website and your advertising contract on clause 7,3. Payment will be effected by any means deemed fit by the company.
“Please note that advertising fees may vary/fluctuate from month to month dependent on the campaign and advertising partner at any given stage during this agreement.”
In May, many saw that R570 drop even further to R484, which prompted a deluge of complaints, responded to by the “help desk” in the same way.
Many of them had received calls from Blue Lakes before the sudden drop in their fees, trying to convince them to switch to the Earn While You Own option, but they had declined.
One posted on HelloPeter: “End of March and April I was only paid R570, after I drove over 1 500km. I was supposed to receive about R1 400.
“I opened a support ticket and the person who replied, two weeks later, said that advertising fees may vary/fluctuate from month to month dependent on the campaign and advertising partner at any given stage during this agreement, which is just plain nonsense.
“I have a set advertising fee and the more kilometres I drive, the bigger the percentage of the advertising fee I receive.
“When I drive between 1500 and 2000km, which I did, then I am supposed to receive 95 percent of the advertising fee.
SUDDEN CHANGE OF CONTRACT
“They’ve been trying to convince me for months to move to the EWYO contract, where you get paid for every car sold through your unique code and when no cars are sold for a month, you get paid R570, but I refuse to move to that contract.
“It looks like they moved me to that contract without my consent.”
That account echoes those of several “ASPs” who have contacted me in desperation, among them a medical receptionist in Durban who drives a Renault Sandero (she asked not to be named, for fear of retribution), Marie van Antwerp, a pensioner in Port Elizabeth who drives a Tata Indica and a part-time student, Zaakirah Rossier of Athlone, Cape Town, who also has a Sandero.
The receptionist has seen her fee reduced by about half in recent months and is beside herself.
Like the others, she cannot get anything apart from that standard e-mail response as an official explanation.
Van Antwerp said: “I am in a total panic at the end of every month. What was supposed to be an enjoyable event is a total nightmare.”
Rossier is equally desperate: “I am not able to pay the instalment because of all my other debts,” she said. “I am now trying to find a job as an online journalist with higher earning potential in order for me to survive.”
SATINSKY GROUP RESPONDS
I brought all three complaints to the attention of the Satinsky group, querying the lack of meaningful response they’d got from the help desk and whether their contracts had been switched.
This is the response I got from Siyanda Zuma, media liaison manager for the Satinsky group.
“The Satinsky Group of companies consists of a number of divisions including Drive Car Sales and Just Group Africa.
“Blue Lakes Trading & Promotions is a separate company with no ties to our company. It is based in Hong Kong and is a trading, promotions & advertising company.
“The Satinsky Group of companies is not responsible for any payments to clients who purchased vehicles from ourselves.
“Please note that when customers purchase vehicles from our group of companies they enter into two separate transactions – a vehicle finance agreement with the bank, in which they are responsible for the full monthly payment, and they have the option to enter into a advertising agreement with a third party Blue Lakes Trading and Promotions in which they become service providers to the principal Blue Lakes Trading and Promotions.
“Blue Lakes is responsible for payments of advertising fees which vary and fluctuate.
“No contracts are changed unilaterally and advertising fees vary from time to time dependent on the campaign which is available.”
Zuma refused to explain why so many Option 2 “ASPs” are complaining of receiving fees which do not correspond with the amounts they are entitled to – and were getting previously – in terms of their mileage.
All he would say was: “The Satinsky Group manages the help desk in South Africa and does so on instruction from Blue Lakes Trading and Promotions.
“We are aware that certain clients are unhappy with Blue Lakes Trading and Promotions and are in the process of addressing these complaints.
“We are in the process of launching a new rewards programme and will update you as soon as it is officially launched.”
So, essentially, Satinsky is distancing itself from the deals, in the face of complaints, saying it is only the “managing agent” for Blue Lakes.
Hence I asked Zuma: “Consumers are contracting with Blue Lakes, but who do they turn to when unhappy with the deal? A help desk run by Satinsky.
“But you say Satinsky is not party to the agreement, so who is the responsible party at Blue Lakes?
“And how does a disgruntled client get further than a help desk run by a company which takes no responsibility for the contract?”
His response?
“Please note that all details regarding the parties to the Advertising Service Providers Agreement are contained within the agreement given to the relevant Advertising Service Providers.”
I haven’t been able to find those contact details in any of the contracts and other documentation I have seen, and nor have the “ASPs”, or they’d surely be directing their complaints accordingly.
As for recourse, well, cancelling the contract will leave them paying the full instalment on their cars.
And complaining to the Advertising Standards Authority about misleading advertising could have the same effect, thanks to the wording of the contract, under Suspension of Payment.
A most unsatisfactory state of affairs, to say the least. -The Star
. when they read the key there was a lot of errors that they attributed to it being because I used the spare key(how true is that?). Please advise
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Car is 335I F30
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