Consumer Alert

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 one of the banks, 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 this 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 South Africa.

There are two deals on offer.

The first is the Earn While You Own deal. Here, 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 R3 000.

Then, there’s the Earn While You Drive deal. The ASP is compensated on a sliding scale, linked to how many kilometres they drive in a particular month, with the advertising fee being calculated as a percentage of the repayment amount of the car. If they drive more than 2 000km in a month, they get 100 percent of the repayment for that month.

Both options require the car owners to submit photos of their vehicles, taken at specific angles and at specific times of the month.

There are apparently third- party advertisers, who are said to pay the advertising fee, but most of the cars seem to advertise only the scheme itself.

The monthly repayment, which goes to the financing bank, is fixed – subject to interest rate fluctuations, of course – but the amount they can expect from Blue Lakes, via Satinsky, is not.

That makes it very hard for a person on a fixed budget to make sure they can meet their financial commitments.

Because of this, many opted for the second option, as they could then have more control over their monthly mileage than whether or not someone responds 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 they 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 very well out of their contracts, they are vastly outnumbered by those who have reported to be bitterly disappointed and suffering terribly financially.

They’ve complained of many things, but it would seem the common thread among many who opted for the second option is that while it worked well for them initially, they have since been unilaterally switched from the second option to the first.

Since 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 like this: “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.”

Last month, 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 prior to the sudden drop in 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, so I was supposed to receive about R1 400.

“I opened a support ticket and the person who replied, two weeks later, said 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 1 500 and 2 000km, which I did, I am supposed to receive 95 percent of the advertising fee.

“They’ve been trying to convince me for months to move to the other 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 R 570, but I refuse to move.

“It looks like they just 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 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 can’t 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 nightmare.”

Rossier is equally desperate: “I am not able to pay the instalment because of all my other debt,” she said. “I am now trying to find a job as an online journalist with higher earning potential, to survive.”

I brought all three complaints to the attention of the Satinsky group, querying the lack of meaningful response they’d received from the help desk and whether or not 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 and 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 an 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 second option “ASPs” were complaining of receiving fees that did not correspond with the amounts they were entitled to – and were getting previously – in terms of their mileage.

All he would say is: “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 launch-ed.”

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 they’re 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 that 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 would 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.