The court investigates a multimillion euro tourist scam in southern Tenerife as claimed by CLA
- The amount defrauded exceeds 12 million euros, according to the law firm representing the 233 families who have joined the lawsuit against a ‘timeshare’ company.
- From the 20 people indicted the magistrate in court number 3 in Arona has already called two of them to testify.
- Customers invested substantial amounts of money with the promise of a future lucrative resale “that never came to fruition”
Following the filing of a lawsuit in April 2011 The Court of Instruction No. 3 of Arona in the south of Tenerife, is investigating an alleged tourist scam involving the selling of timeshare rentals “timesharing” against the British Resort Properties Group and their Spanish subsidiary Silverpoint Vacations SL. According to Canarian Legal Alliance, the law firm representing the 233 families who have joined the lawsuit and claiming to be victims of fraud, the amount defrauded exceeds 12 million euros
So far 20 people have been indicted, including managers, sales managers and sales representatives. On Thursday two were called to testify: Mark Cushway, who was executive director of Resort Properties and is currently CEO of Silverpoint Vacations, and Francisco Alonso Andújar, a representative of the same company. However, the appearance of the first has been suspended until the 14th of November because it has been established that he is out of the country.
According to the complaint, the Resort Properties Group sold tourists accommodation weeks as a high yield investment, with the promise of a lucrative resale.
Customers invested substantial amounts of money in the hope of obtaining revenue from a future resale of the week. However, when the clients came to inquire about the status of their investment, according to their testimony, Resort Properties informed them that there were no resales and that the only solution was a new investment. “In no case were resales performed as promised,” say those involved, who in the meantime have to deal with the high maintenance fees (up to 600 euros per week).
For the plaintiffs, the practice of the company corresponds to a preconceived plan: “Whilst they inform one client that their investment package is worth nothing and they cannot sell it, they are still selling investment products to other clients”, According to the law firm Canarian Legal Alliance, they used their membership of an alleged consumer protection association “that reinforced the appearance of reality and truth” taking advantage of the “trust and good faith” of the purchasers.
The solicitors emphasize that the business has been practicing this trade for decades and that they are “well aware that there is no resale market.” Knowing this fact, “their sales techniques were based entirely on the alleged lucrative resale of weeks.”
The claim sets out a series of clues which, in the opinion of those affected, show that the company did not sell the packages of weeks for the use and enjoyment of the tourists, but as an investment product. First, the object of purchase: sales occurred in non-consecutive weeks and did not match neither the season, nor the size of the apartments and the resort.
In addition, as part of the same, the company gave as a gift a week of accommodation in another timeshare club in Tenerife of the same group. “If you consider that customers had just bought many weeks, the gift is meaningless, since the holiday enjoyment should be guaranteed”, prosecutors allege.
Moreover, the company used to guarantee in the first year of use the expected rental of their weeks which amounted to several thousands of pounds, “which reinforced the impression of the value that these weeks supposedly had.” However, after this period, the lease “would not happen again”.
Finally, pointing out that five of the fourteen clauses of the declaration of conformity of contracts talk about the resale of weeks and that the period in which it was done is not guaranteed.
The firm representing British tourist victims of the alleged scam also argues that this plot has some aggravating elements, as most of the customers were pensioners and that several of them had deposited all their life savings in these products.
“The promises and false expectations are repeated verbally, but never reflected in contracts. The defendants knew beforehand that they would not be able to fulfil their part of the business: the lucrative resale of those weeks,” says the brief submitted to judge.
Formal letter of request to the UK
At the request of the complainants the head of the magistrate 3 Arona, Roi Lopez Encinas, raised a formal letter of request to the British courts to request information from Barclays bank regarding contracts with Resort Properties and Silverpoint that facilitate loans to customers of the company.
The claimants suspect that the bank could have benefited from these financial transactions with customers in timesharing. So far, they have asked Barclays for 919,000 euros as a bail corresponding to the amount of interest paid by the alleged victims of the scam under the loans taken to pay those weeks. .
Cristina Batista
Cristina@canarianlegalalliance.com
Canarian Legal Alliance SL
C. Ángel Guimera n.14 Bajo
35120 Arguineguin / Mogan
Gran Canaria Spain
Tel: 0034 928 18 50 28
Fax: 0034 928 152842
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk