Barclays Partner Finance (BPF) was a preferred finance company for a Maltese timeshare company Azure who improperly sold finance to new owners. Barclays agreed to repay the interest element plus another 8% thereon in respect of loans granted between April 2014 and April 2016. Mis-selling of these loans is also evident before and after these dates which has been lodged with the FCA.
A solicitor collaborating with a firm of lawyers M1 Legal based in Spain challenged the decision claiming that the capital element should also be refunded together with the 8% interest.
An appeal was submitted to the Upper Tribunal but before the hearing date, BPF agreed to refund the capital element on a voluntary basis along with the removal of any adverse entries on credit files relating to these loans. The remediation process started on 15 September 2021 (as a pilot scheme sending the refund letters to 200 consumers) and if all goes smoothly they will continue from 14 October to 26 November 2021 with the remaining consumers. It is anticipated that by 25 April 2022 the process should be completed.
We understand that the total refund will be around £48 million pounds which will also include writing off any remaining debts. The timeshare owners were represented by Adriana Stoyanova, a solicitor collaborating with M1 Legal who initiated the argument with the FCA several years ago.
This is not the first time that the banking industry has been called to task for mis selling. The PPI scandal was the single largest claims process involving the industry. The Financial Times reported that the cost could be as high as £50bn, although other financial pundits state the figure could be much higher. Although the Azure case focuses solely on BPF we are in no doubt that other lenders may well be exposed to claims for the same reason as the BPF/Azure scenario.
Internal audit
M1 Legal carried out an internal audit on clients that have finance loans attached to their timeshare purchase this revealed that 46% thereof were arranged by unregulated brokers i.e. the timeshare sales companies or representatives.
This means that other finance providers may also be liable which could lead to a substantial payout for owners in other resorts. TCA estimates that there could be around £2 billion pounds worth of mis-sold loans in this sector.
Our thoughts
The Financial Services and Markets Act 2000 put rules into place to not only govern the industry but strengthen legislation surrounding consumer protection. We are certain that the mal practice uncovered by the BPF/Azure case may only be the tip of an iceberg.
If you have a timeshare with a connected finance contract we are not suggesting that it is illegal, however it must be worth checking with a competent legal advisor. As demonstrated by the current case, the arranging and broking of finance and loan agreements by unauthorised intermediaries is a direct breach of the rules and as confirmed may bring severe action for those found guilty of the offence.
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