In the past week both the Daily Mirror and the Telegraph have published articles relating to timeshare fraud, specifically fraudulent companies offering exit and claims services. In the case of the Daily Mirror they championed the plight of Adrian and Ruby Davies who had been cold called by a company called Carl James Associates with a promise that they would relinquish their ownership at Club la Costa for a fee of £4,200.
Later Dr Davies decided to change his mind as he was not satisfied with the advice given to stop paying their maintenance fees. Apart from his dislike of this advice Dr Davies had submitted no paperwork and had not signed any contract. Carl James Associates refuted the refund stating Dr & Mrs Davies had a “contract in kind”. Thus far we are unaware if an amicable result of this grievance has been forthcoming.
Similarly, the Telegraph cites a number of cases where timeshare owners have been duped into paying thousands to rogue companies, the upshot of which is that whatever they paid has been lost and they still have ownership of their timeshare.
The Telegraph however does raise a valid point and we quote:
“Despite the dangers, legitimate claims can succeed. In Spain, where many timeshares are located, the Supreme Court ruled that contracts must not be open-ended or exceed 50 years. Many Britons have been able to recover money under these rules. Since new EU laws were introduced in 2009, buyers must also be allowed a 14-day cooling-off period. This; along with a number of other legal arguments relating to Spanish law, have offered further avenues for claims.”
It is refreshing that the Telegraph has pointed out that certain Spanish timeshares may be proved illegal. Hundreds of thousands have been paid in compensation to date with many hundreds more in the court process. We have previously explained the background to these claims and the court process, in case you missed the publication, here is the link:
In the interests of taking a balanced view of the industry we think it is also it is worth pointing out that part of the blame and responsibility for the plethora of fraudulent companies lies with the resorts, developers and management companies. The hard sales techniques employed at resorts that tie owners into extremely long term contracts with ever increasing annual maintenance fees that either no ability to exit or considerable penalties to pay if exits are allowed. This forces owners to seek other means of disposal, which in turn leaves them at the mercy of the scammers.
As a whole, the global timeshare industry is, for the most part, totally unregulated with the exception of certain legislation which in the case of the European Union was enacted by Directive 2008/122/EC. The problem with this legislation is that it has been phrased to protect consumers at the point of sale and offers little protection to existing owners.
Whilst in Europe there is a trade body, the Resort Development Organisation (RDO), its sole raison d’être is to further develop the timeshare industry and whose members number the major resorts and developers. As such their main focus is to grow the timeshare industry whilst at the same time generally ignoring the plight of owners. In both articles the Mirror and the Telegraph quote Kwikchex. As an organisation Kwikchex make no secret of the fact that they are sponsored by the RDO, so it begs the question whether advice offered is weighted in favour of the industry rather than the consumer. Kwikchex is also responsible for a number of related websites being Timeshare Task Force, Timeshare Business Check and a new entry being Timeshare Exit Concerns.
In the USA, again, there is a trade body called the American Resort Development Association (ARDA). Much similar to the RDO they act on behalf of resorts and developers. The USA has no national timeshare legislation but leave this to each individual state. Once again the legislation that does exist is generally for protection at the point of sale.
Given the lack of meaningful legislation to put rules in place once and for all to protect not only the sales aspect of timeshare but the freedom to cancel or exit without strings attached, we fear it will be a long time before owners can rest easily in the knowledge that, if necessary, they can simply walk away.
RDO Suggested Exit Strategy
We recently had cause to contact Belton Woods who are part of Seasons Holidays PLC. They kindly supplied us with their current rules in relation to exiting ownership as suggested by the RDO.
Apart from being extremely restrictive, you may note that maintenance must be up to date; this must be followed up by FIVE years further maintenance payments as a settlement fee! So look at an imaginary scenario. A husband is diagnosed with a terminal illness; imagine the family strain taking in such news together with the associated arrangements they will have to embark on. Then to top it off and settle the timeshare ownership prior to the husband’s demise they have to pay what is effectively a huge sum by any stretch of the imagination.
Some resorts that have been guilty of issuing illegal contracts in Spain for breaching law 42/98 are willing to allow a free exit. First it is important to be aware that in the event that a member decides to exit their membership according to “this policy”, the resort requires them to sign a disclaimer waiving their rights to claim against them or any associated companies including lenders.
This means that if these member later wish to pursue a claim against their resort, they are unable to do so.
Moving forward, it must be argued that if the majority of developers, resorts and management companies allowed for simply walking away rather than charging exorbitant penalties or worse still not allowing exits at all then this would put a nail in the coffin of the rogue traders.
Until then bona fide exit and claims companies will still have an important role in fighting for the rights of timeshare owners.
Click here to read our recent article on an old scam doing the rounds again.
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