He said, she said: Wendy on verbal assurances

They almost always arise from one simple issue - an assurance that’s given verbally only, so when a dispute arises down the line, the consumer can’t prove what they were told.

I’m talking about the used car salesman who says the car’s a 2013 model, you sign the paperwork without checking, and only later discover it’s actually a 2012 model, and you can’t prove that you were misled.

Or you get talked into signing a gym contract by a salesman who says “and you can cancel your contract at any time”, and when you want out you’re referred to a fine print clause of your contract, which makes you liable for a very hefty cancellation fee.

Shane Emanuel's investment

According to Shane Emanuel of Isipingo, his verbal assurance was around the purchase of a set of investment coins.

Back in 2011, he and his wife used the pension she got after being retrenched to buy a R49 000 set of five gold and silver coins called the Mandela/de Klerk Protea set from the Scoin shop in the Pavilion.

The shop is one of 25 Scoin shops operated by the South African Gold Coin Exchange, which claims to be the only coin and medallion retail chain store in the world.

Having investigated other investments, the Emanuels came to the conclusion that the return promised on the coins made them the best option.

Here’s the thing - the company did not give them an official assurance that they’d buy the coins back at a certain date.

But it’s a natural thing for a potential investor to ask about their ability to sell their investment in the future, and Shane is adamant that two salespeople in Scoin’s Pavilion store gave them an assurance about a buy-back.

“We were advised to keep the set in their vault for three years and after that we could cash it in, either selling back to Scoin or selling it privately,” he said.

Clearly, that is Shane’s recollection of what was said. It could be that he misinterpreted what was said, or what was said was vague and he assumed the rest. Whatever - the point is, verbal undertakings are dangerous, because they leave no evidence trail.

Recently, when Shane asked Scoin about the current value of the coins, he was given the figure of R65 000. 

And then he said he’d like Scoin to buy back the coins.

The salesman said he’d have to log the request with head office in Jo’burg, and got back to him to say that since they currently have plenty of those Protea sets in stock, they weren’t buying them back, and he needed to keep the coins longer.

Shane says the salesman undertook to make a second request and get head office but he never heard back.

I’ve received similar complaints about Scoin in the past, and consumer complaints website HelloPeter has quite a few, too.

In July “Koos1962” wrote: “I bought Mandela coins as a investment five years ago. I need cash now, and tried to cash in on the buy back policy from Scoin. Just to hear ..” sorry we have no need to buy back "

“What is an investment if there is no market to sell to, and cash in on the investment. I shall never buy any coins from them again..”

Demand in the marketplace

Responding, Chantelle Burrows, the SA Gold Coin Exchange’s general manager of marketing, began by saying that the biggest advantage of coins and medallions was that they hedge against the Rand. 

“The nature of this asset class requires that a longer term view is taken and that there needs to be demand in the marketplace for that specific product in order for a buyer to be found,” she said.

“The Scoin Shop does offer an excellent trade exchange platform where we attempt to find a buyer for the coin/medallion. We have managed to successfully sell many coins/medallions over the years through this platform, and we will continue to do so. 

“However, if the economy is slow or there is not enough demand for that specific product in the marketplace, then the exchange between buyer and seller is unable to take place.”

She said the company recommended to its customers that they buy coins for the purpose of wealth preservation and not speculation, and that they held on to them for a long time. 

As for claims that its sales people made buy back promises, Burrows said the company had never offered a guaranteed buy-back to its customers, and added that this was clearly stated on the company’s website.

“We support transparency with customers and encourage honesty and integrity from our sales division,” she said.

And Scoin store staff are trained to not mention guaranteed buy-back periods in the sales pitch, she said, "as we never offer that”.

"We offer an exchange facility should a customer need it, however, there is no time linked to this platform."

It’s been a very a steep learning curve for Shane.

“In future, I’m going to insist that everything I’m told is put down in writing,” he said. 

There’s a good reason why the contracts of companies which employ commission-driven sales people often include a clause which goes something like: “Verbal undertakings made by company representatives do not form part of this contract”.

So, if you are given a verbal undertaking which is key to your decision to accept a deal, make sure it’s reflected in the contract you are signing, or at least that you have some form of record of it.

I recommended asking them to repeat into your cellphone, on voice memo mode. If they refuse, well, then you know all you need to know.

Talk is cheap, so they say. Unless you can record it or the words appear in a written contract.