Whilst carrying out some research we once again came across a 62 page report carried out by the Competition and Markets Authority (CMA). For those not familiar with the CMA it is the UK’s principal authority responsible for competition and consumer protection. It enforces competition and market regulation by investigating cases, providing rulings, issuing penalties and supporting government and other market regulators.
The report we refer to was published in October 2015 and entitled:
Disposal of Timeshares and Other Long-term Holiday Products – a Report for BIS and the European Commission
Condensing the content, it reinforces points the TCA have been making for many years. The major areas covered are:
- Industry lack of coherent exit strategies
- The issues surrounding ownership contracts in perpetuity
- Developers who have published exit strategies criticised for draconian terms
- Increasing age and non use
- Escalating maintenance bills
There are many other smaller criticisms but all in all the report is damming of the timeshare product.
The report quotes both the Resort Development Organisation (RDO) and the now defunct TATOC. The RDO acknowledged that exiting timeshare did present problems and subsequently suggested that RDO members adopt a proposed exit strategy, however, as a non regulatory organisation, the RDO cannot legally force members to adopt any suggestions made.
By way of example, the RDO put forward an exit penalty of three years maintenance fees but on documentation in our possession, RDO member, Seasons Holidays have published the exit rules from their resort, Belton Woods which states five years maintenance.
Timeshare and Government intervention
Put simply, there isn’t any. The UK has in the past had its own timeshare legislation but this was replaced with the EU Timeshare Directive of 2008. This Directive in itself is a tiger without teeth and although offers elements of protection to consumers at the point of sale, does little to protect existing owners of timeshare.
The point needs to be made that there are approximately 650,000 timeshare owners in the UK, this figure represents less than one percent of the population. Being realistic, does the UK Government have any desire to use Parliamentary time to construct any form of protective legislation that represents such a small fraction of the population?
Factor in that only around 20% of UK owners own a timeshare with a UK based company 80% would not benefit from any form of legislation. Nearly 50% of UK owners own in Spain and at the time of the UK being a member of the EU, maybe cross border legislation may have applied, albeit unlikely, but of course, those days are gone.
TCA comment
With sales of new timeshare across Europe being at an extremely low volume and the same for sales in the UK, the need for developers to hold onto existing owners is greater than ever. There is a much higher reliance on collecting annual maintenance fees than ever before. In the heady days, developers would be only too pleased to take back weeks as they could immediately be sold again thus creating profit, now allowing exits creates a deficit in annual income with little chance of selling spare capacity.
Is it not bad enough that those who want to exit have to walk away from their initial investment, also years of maintenance payments dutifully paid and suffer the loss, then to be told that there is no exit or a requirement to stump up multiples of maintenance fees to simply walk away must be wrong?
Whilst we commend both the CMA and Lorraine Conway who tenaciously publishes a distilled version of the report every year in the Parliament Library, it would be foolhardy to believe that there will be any change at state or legislative level. The current energy crisis and inflationary pressure affect 100% of the population, who in their right mind would believe that legislation would be enacted for a maximum of 1% of the population?
As a timeshare owner you are at the mercy of the developers, if they won’t let you out, tough. If they increase maintenance fees well in excess of inflation, tough. If they want to charge you as much money as they demand to exit, tough. If you can’t find availability, tough. And so the list goes on.
Maybe one day when the Government have fried all the big fish they may get round to frying the smaller ones, our suggestion would be don’t hold your breath waiting for that to happen.
Below are links to download the documents referred to in this article.
DOWNLOAD – CMA REPORT
DOWNLOAD – PARLIAMENT PAPER
DOWNLOAD – BELTON WOODS LODGES
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