Normally TCA focus in the main timesharing ownership areas being Europe and the USA, however we often overlook other areas, possibly because little news or problems are forthcoming from. Recently we did however pick up on some timeshare litigation news from India.
According to All India Resort Development Association (AIRDA) there are currently over 500,000 households owning timeshare in India and the report we picked up on echoed similar problems in India as those experienced in Europe and the USA.
The court case
The Bombay High Court imposed a cost of 25,000 Rupees (£250) on the petitioner and dismissed a Public Interest Litigation case (PIL) seeking direction to the Respondents to regulate timeshare companies as Collective Investment Schemes (CIS) under Securities & Exchange Board of India Act, 1992 (as amended in 2014) and the Collective Investment Schemes Regulations. The basis on which the petition was presented was that the rights of several million residents of India had been adversely affected due to malfunctioning, fraud, misrepresentation and other wrongful and/or illegal activities of various timeshare companies, sounds familiar doesn’t it.
Put simply, the plaintiffs asked that the Securities & Exchange Board of India (SEBI) to regulate timeshare companies because it was felt that the timeshare product should be classified as a collective investment, much like the UK Unit Trust market. The Court however clarified that it was not in any way held that all timeshare companies offer Collective Investment Schemes and it is for the SEBI to consider on the facts of each case.
The court agreed that it’s true that the innocent and gullible investors need to be protected against the abuse in timeshares. SEBI – the Regulator being fully empowered to do so, it would therefore not be necessary for us to give any such directions to the Regulator, the Court held.
So from what we gather, there is a complaints mechanism directly to SEBI on an individual basis but neither SEBI or the court were in agreement to extend regulation to the entire industry.
TCA comment
For a “class action” to be presented to the courts confirms that many Indian timeshare owners are, or have experienced problems with ownership. TCA are not intimately familiar with the Indian timeshare market but we are of no doubt that the sales methods applied mirror those of Europe and the USA. No doubt increasing maintenance fees are also a burden as commonly experienced by timeshare owners globally.
Certainly in Europe, the EU Timeshare Directive of 2008 prohibited timeshare to be sold as an investment, the very mention of investment is unlawful, in India it would appear that selling on the investment pitch must be quite common as why would a challenge be launched to have the product regulated by the equivalent of the UK Financial Conduct Authority (FCA).
What this failed case does highlight is the fact that certain timeshare owners in India have come to realise the timeshare concept is flawed but once more we see the authorities shying away from strengthening consumer protection.
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