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post #1 of 9 Old 11-18-2006 Thread Starter
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Cool Non Refundable Security Deposit

As some one who sails alot in the Med and the Carribean, I am alarmed at a new trend developing with Greek Bare boat companies. The Non refundable security deposit..... I refer you to MG Yachts web page and there blantant scale of Non refundable deposit charges
scroll to the bottom of the page to see there charge schedule....

In an industry that is little regulated in Greece, we now have a new quirk to deal with. It seems that MG Yachts wants to keep a portion of your security deposit money, regardless wheather you damaged anything or not !!!
and I quote direct from the web site....

"On the non refundable security deposits, we refund the half of the amount,
in case of no damages or losses at all."

I guess MG Yachts has to make up the difference of there cheap prices by offsetting that by keeping your security deposit.... I have not checked other Greek Charter company security deposit polices yet... but fully plan too, becasue if this is the new trend/scam with Greek Bare boat companies, then they should be taken to court becasue amounts to an illegal practice.

A security deposit is meant to be that, a deposit against damage/accidents, if there is damage that needs to be fixed above normal wear and tear then the charges should be taken from the deposit and the remainder returned to the client. Keeping a portion of the deposit regardless as MG Yachts states they do is illegal .... perhaps there slogan should be "send us your money and stay home"...

At a time where private captained yachts are growing in Greek waters, much like the carribean. It seems to me the better option rather than run the risk of losing money with unsurplus Greek charter companies who make up scams and policies designed to lighten your wallet and ruin your vacation. Private captained yachts do'nt even charge security deposits, and I still get to steer the yacht and choose where I want to go. I fore see the small greek charter broker slipping into the mire and private operations slowly taking over, again much like has happened in the Carribean.

I invite comments and enlightenment, of which MG yachts will have a few choice words to say I am sure

Last edited by Britsailor; 11-18-2006 at 12:30 PM.
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post #2 of 9 Old 11-18-2006
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Hmmm... a security deposit that isn't returned, even in the case of no damage... sounds like theft to me... I don't see how it can be considered much other than theft.


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post #3 of 9 Old 11-18-2006
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Yust looking at the site I would understand the "Non Refundable Security Deposit" is in fact a sort of damage waiver.
You either pay (for example) deposit of 1,500 EUR and take full risk (loosing from 0 to 1,500 EUR) or pay 450 EUR of which you never get back 225, but only pay 450 in case of damage (loosing from 225 to 450 EUR.

So does anyone have first had experience or is all just spaculation ?
Did you Britsailor check if perhaps it is not a scam afterall - and you said it is a trend - how many companies?
Not that I say we should blindly trust them - but let us give them a chance.
By the way - I chartered a lot in Med (mostly Adriatic), but never in Greek waters, so I have no experiance with Greek charter companies.
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post #4 of 9 Old 11-18-2006
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Talking Are they biting the hand that feeds them?

Ok, who knows if other companies are also joining this pernicious trend?

On the other hand, when you visit their web site it is obvious that they don't speak and understand English very well--this may be something lost in translation.

I would view this as a business opportunity for competitors to tout the fact that said policy doesn't apply at "Gil's Yacht Chartering" or some other.

I don't see how it could be illegal as it is laid out for everyone before the contract is signed. If I tell you I am going to take your money, you have no recourse when I do just that :-)
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post #5 of 9 Old 11-18-2006
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Beware of Greeks bearing contracts!
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post #6 of 9 Old 11-19-2006
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I think that much of this could be in interpetaion of of contract. Could be a language issue, could be a great con, who knows without first hand experience. Unfortunately, when we get into things Greek on this site it usually feels like competing Greek captains/charter companies taking shots accross the bow of each other.

In my experience, mostly Great Lakes based, there are two options available.

1. A security deposit of from $600-$1000 that is fully refundable. Also in my experience a full refund is usually the case. Surprisingly, little abnormal damage is done to most yachts. However, just as in a car rental, if you break it, or total it, you are responsible for fixing it unless you do the following.

2. Add damage "insurance" for a cost of $25-$50 a day. This is non -refundable in all cases. That gives you protection if you do major damage to the boat. For instance, if on the second day of your charter you put the boat on the beach doing $50,000 damage, your liablity as a charterer is the loss of your security deposit, the loss of the balance of your charter time (which you paid for up front), and whatever costs are associated with the time that you must now fill because of your accident.
Not a bad deal if you consider the cost of the yacht compared to the average cost of a rental car and then compare these rates to what Hertz would charge you if you elected to go with their insurance.
"Insurance" above is in quotes because in most cases a insurance policy is not purchased with those dollars. They go into a fund, which can add up over the course of a year, to cover the expenses when and if they do happen.
If you look at the "insurance" as a percentage of the total charter it is silly not to get it. Your risk is lowered and you walk away...sometimes from things caused by your own stupidity.

Again, not sure what our Greek friend is doing, but it sounds like a version of the above. Costs do have to be covered in the end. A !000-2000 Euro deposit might sound like a lot of money to some, but as soon as you have to pull a boat off a reef, replace the keel and rudder, and lose 2 months of revenue, it looks like a paltry sum. You can get insurance for most of the above, however the loss of revenue is not normally covered in a yacht policy.
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post #7 of 9 Old 11-19-2006
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To stop people wasting their time building scenarios about presumed unfair charter clauses, I assure you that the common and only practice among boat chartering companies in Greece is the option for the customer to pay a fully refundable security deposit (equal to about 1/2 to 1/3 the weekly charter fee) or a non refundable damage waiver charge (typically equal to 1/6 the weekly charter fee). Upon return, a diver checks the hull underwater and a quick control is carried out that nothing is missing.

PS: What I have seen in Greek waters makes me think that charterers are particularly prone to causing physical damage by commiting silly mistakes.
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post #8 of 9 Old 01-02-2007
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The Moorings has a refundable security deposit at all of their bases; some do a more thorough inspection than others. Generally, if you rip a sail or some of the sunbrella material on the dodger/bimini they don't bother with your security deposit because they would like you to return.

They have 2 methods of payment for damages. No deposit just your credit card for the deductible around $7,000US or $450US for insurance to cover the $7000US deductible. If no damage they don't put the $7grand through the credit card; if you do damage or not you paid $450 for the insurance against the possible deductible you would liable for.

We are Moorings owners and depending on where we charter sometimes we don't take out the $450 insurance against damages; we just give them the credit card for the $7grand.

Charterers all over the world should be taking out the lower amount against the insurance deductable. They are in unfamilar waters, the GPS isn't always accurate and sometimes they become careless or distracted.

Two occasions I would like to mention that I have first hand knowledge:

We were in a recip charter in Tahiti and saw a Sunsail vessel try to enter through the reef, when returning from Bora Bora, where there was no passage, and when we were schedule for a recip charteri n Split, Croatia, the vessel we were to use had been broadside when both vessels were on auto pilot and no one was on deck; both vessels were having lunch below.


Last edited by S/VNirvana; 01-02-2007 at 04:18 PM.
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post #9 of 9 Old 01-07-2007
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Been watching this thread for a while, and thought that perhaps it was time to add my 2 cents worth. Security deposits are a touchy subject. It all revolves around what can be consturd as damage or normal wear and tear.
No one is comfortable with letting a sizeable amount of money out of there hands, only to be told you can have it back if you can get around the sailing course without breaking any thing !! In my mind that is just plain stupid. However you effectively do that every time you pay a security deposit.
So is insurance a better option ? More importantly is the MG Yacht policy legal or illegal ? To understand a little better what is going on here in Greece one has to look at what brokers and owners are doing to each other.
MG Yachts owns a few yachts but mostly uses other peoples yachts or privately run charter yachts. The terms of the contract require a security deposit against damage, which in fact is the insurance policy deductable of the yachts insurance policy, plus a few extra hundred for emergencys.

In most cases brokers will refund the full amount unless you banged the keel, dropped the rig, or some other disastorus event.
What the broker has though is some unaccountable expenses that he has to cover, for example the diver to check the keel and prop, possible transfer costs, and of course the extra promises made to the client to smooth things along, these can be simple things like a trip to a grocery store, or having extra towels or giving a free out board or such like. To recover these costs the security deposit is the scape goat. So small insignicant damages can be use to recover lost revenue.

In some ways MG Yachts policy makes sense, keep a portion of the security money to pay for these added expenses. I guess the probelm then goes on to the owners and broker relationship. After extra costs have been paid for should the balance of the with held secuirty deposit go to the owner or should the broker keep it all ?

ALL VERY COMPLICATED......................... So why not just buy a short term insurance policy from an insurance company to cover the cost of the trip much like 'Travel insurance' and avoid paying anything to these brokers. Let the insurance company deal with them !
Alternatively you could take a Captained yacht charter on a private yacht and avoid all insurance or security costs. Beware of taking a charter company rent a captian as they are still at risk, and believe me when they park the yacht on the rocks, you will still pay. In most cases Greek company rent a captains hardly ever have there own insurance.

It seems to me that MG Yachts policy, while questionable, is a convienent way to get around an increasing sticky problem here in Greece. Perhaps better legislation is required, certainly better policing......
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