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  1. #1
    Diamond Member Blurock's Avatar
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    'R699' car deal owners in despair

    Read this article on IOL Motoring http://www.iol.co.za/motoring/indust...ers-in-despair


    Independent Newspapers June 23 2014 at 08:50am By Wendy Knowler

    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.
    Is this still news? What, you didn't know? This has been a scam from day one. A perfect scam to exploit the stupid and seekers of short cuts.
    Excellence is not a skill; its an attitude...

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    When things look to good to be true then they most likely are, yet lots of people fall for this sort of nonsense daily.

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    Gold Member irneb's Avatar
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    OK, this might help: http://mybroadband.co.za/news/busine...le-online.html

    But I won't hod my breath.
    Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves. - Norm Franz
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    Site Caretaker Dave A's Avatar
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    The Blue Lakes deal was questioned here a year ago, I see. Seems not much has changed since - the income that comes in from the scheme is far from a sure thing, and if you want to pursue the matter, you would seem to need a lawyer in Hong Kong.

    However, applying the principle that when things seem murky, just follow the money -

    The money being used for pay outs (even if less than expected) has to come from somewhere.
    The contract talks of advertisers, and everyone seems to perceive Blue Lakes SA as the primary advertiser being referred to in the contract (as all the adverts are for the scheme).
    But what are they actually promoting?

    The scheme, yes. But that scheme in essence is promoting the sale of cars.
    The car dealership(s) selling the cars just has to be paying Blue Lakes SA a slice of the car sale. It's the only place that the money can be coming from!
    The car dealership just has to be the actual advertiser referred to.

    So let's go back to the Wendy Knowler article, and particularly this quoted response from the Satinsky Group representative:
    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.
    Now if a company in the Satinsky Group is selling the cars, and a company in the Satinsky Group is contracted to operate the local help desk for Blue Lakes (whatever), the claim of "no ties" seems a little less than entirely truthful. What seems more likely is that there is actually a significant, mutually beneficial relationship between Blue Lakes and the Satinsky Group, and one could postulate that Blue Lakes has intentionally been positioned as the cut-out in an elaborate scheme ultimately designed to help a member of the Satinsky Group sell cars.

    Of course that doesn't in itself make the scheme illegal, or a scam, or a pyramid etc. It would just help someone argue why a case might be pursued here in SA against the Satinsky Group rather than in Hong Kong against Blue Lakes - if there is a case to be answered.

    The other possible angle worth exploring is the reports of folk where the instalments become patently unaffordable without the expected income. Is this (apparently unreliable) income stream perhaps influencing the affordability testing used for the granting of credit? If yes, that might open the door to folk seeking relief under the reckless credit provision of the National Credit Act.

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    Gold Member irneb's Avatar
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    Unfortunately there's just so many who'd fall for these things. I actually felt the same about those cheap car-loans where there's still a 30% residual (or more) at the end. It works reasonably if nothing goes wrong, like an accident or you've driven slightly to far or haven't traded it in exactly at the optimal time.

    The point is, there's no free lunches and very few cheap lunches (unless they're poisonous). My rule: if something surprises me I get VERY suspicious, if I can't see myself offering such a deal (placing myself in their shoes) then I "know" it's a scam.
    Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves. - Norm Franz
    And central banks are the slave clearing houses

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    Site Caretaker Dave A's Avatar
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    From the link above -
    Clients fear they will lose their cars because they cannot afford to pay for them. Satinsky did not provide clients with copies of their signed contracts. Satinsky made applications to the bank on behalf of the clients, raising questions of possible misrepresentation in contracts.


    Might be worth a shot at claiming reckless credit protection, then.

    And if the banks stand to lose out due to misrepresentation, they certainly should have the funds and motivation to pursue the matter with the Satinsky Group with some vigour.

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    R699pm car business falls apart: report


    http://businesstech.co.za/news/gener...-apart-report/

    its come to a gravely end!

  11. #9
    Gold Member irneb's Avatar
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    The other less likely source of income is from the ads themselves. You SMS to the number written on the car, it costs you R3 per SMS. Just how much they get from that, how much their overheads for the line, and how much they pay back to the driver of the car is not clear. Obviously that would be a numbers game, it depends how many people SMS them and how many then take up the deal.

    It seems they didn't make enough profits from the ad's sms payments. Thus they're now looking at avoiding having to pay back the drivers. I.e. the terms changing from how far / how long you've driven the car, rather to how many sms's received due to the stickers on the car you're driving. So they're trying to remove some of the risk involved by passing it along to the drivers. I.e. if you get (say) R1 out of each SMS then you need around 2000 people to SMS because they saw your car for each month in order for you to only pay R700 on a R2700 repayment.

    See why this is untenable (at least in the long run)? And also a pyramid scheme? The more people driving around with these cars the less chance you have of someone actually SMS-ing due to seeing YOUR car. So the first few get reasonable payments, but the last guys receive nearly nothing - i.e. the very principle behind a pyramid scheme. If designed so or not is immaterial, the effect is the same, and the effect is what makes people poorer not the intention to defraud.
    Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves. - Norm Franz
    And central banks are the slave clearing houses

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    Diamond Member Blurock's Avatar
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    Last edited by Dave A; 05-Jul-14 at 07:35 AM. Reason: fixed link
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