Timeshare Compensation and Your Legal Rights as a Timeshare Owner

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If you own a timeshare or are considering buying one, it is good to be able to understand your legal rights. Several timeshare laws are in place, particularly within the UK and EU that provide protection over a broad spectrum, including timeshare purchase, timeshare resale, what are described as ‘Long Term Holiday Products’ (LTHPs), and timeshare compensation and exit services, in order to help you avoid timeshare fraud.

The following provides basic details about timeshare laws, rights, and how, when necessary, actions might be taken. Laws and regulations are often complex and if you feel you may have a case to complain or make a claim or just want to have more detailed information, you can contact official consumer advice organisations – see details at the end of this article or alternatively seek assistance from an expert lawyer.

EU Timeshare-Specific Laws

The EU Timeshare Directive is the current core legislation that governs timeshare within the EU. It is referred to in a number of ways, including The Timeshare, Long Term Holiday Products, Resale & Exchange Directive and Directive 2008/122/EC. Principal features include the following

Key Information must be provided by traders

Traders must provide detailed information to consumers in good time before signing the contract, including information on the price, a description of the product and the exact period and length of stay that the consumer is entitled to. This information should be provided in the consumer’s own language if they so choose.

Consumers are provided with a ‘cooling off’ period – the right of withdrawal from contract

The directive ensures that consumers can withdraw from a contract within a “cooling-off” period of 14 calendar days and that traders can never ask them for any form of advance payments or deposit during that period.

‘Holiday Members Clubs’ problems and laws

The EU laws were also revised to include products which may sometimes be referred to as ‘Holiday Clubs or what are described under the law as ‘Long Term Holiday Products’.  This was considered necessary as rogue businesses were attempting to circumvent timeshare laws. Several such schemes (which were also often sold as ‘Concierge Services’) were sold extensively – often with false promises of taking an existing timeshare off the hands of owners and a supposed new and better alternative to timeshare. In reality, none of these promises were kept and several criminal prosecutions, arrests and other actions followed. Such schemes included Club Class Concierge, EZE Group and Monster Travel, all sold out of the UK and Spain. A similar product was sold by Voyager Travel / Lifestyle Vacations based in Gran Canaria.

Consumer Protection Regulations (CPRs)

A number of broader laws help protect consumers throughout the EU (and UK).These are generally known as CPRs and cover a wide spectrum, including unfair contract and unfair commercial practices, including misrepresentation in many forms, from misleading statements in the sales process to not disclosing important information.

A brief summary of this and links to additional help can be found on this link to official EU information.

Financial Product Protection

In the UK in particular, there are additional laws that apply to loans that are taken out to pay for timeshare purchases and also extra protection when consumers use a credit card to pay. These normally fall under the Consumer Credit Act and cover aspects such as breach of contract, misrepresentation and ‘unfair relationships’.  The consumer organisation Which? Provides one of the most straightforward general guides on this – read more

Additional National Laws

Other timeshare laws may apply in specific countries. One notable example is Spanish Law 42/98 which came to prominence in 2015, following a Spanish Supreme Court decision. This decision principally dealt with timeshare contracts between January 1999 and August 2012 that had a duration of over 50 years (or where the contract appears to have no end date.) There are several other elements covered in rulings by the Supreme Court, including the issuing of deeds naming specific properties and specification of what is actually owned.  Many cases have been brought before the courts in Spain and there have been many rulings in favour of consumers. These can be complex matters and in nearly all cases, require legal action to be taken in the courts of Spain. Many rogues have exploited the Supreme Court rulings, resulting in substantial losses and distress to consumers. In this case in particular, it is vital that consumers are on their guard and do substantial due diligence.

See the Key Facts page on this website and insist on a full written viability report before entering into a contract or paying monies – and to be on the safe side, seek a second opinion once you have the viability report.

Laws applying to related services, including Timeshare Compensation and Exit

Many timeshare owners that have sought to find information on their options have fallen into the hands of rogue businesses that have in many cases fraudulently charged thousands in timeshare exit scams, and have failed to provide any meaningful service. Within the EU, it is generally the Consumer Protection Regulations (CPRs) that apply to these services – but there are also other laws and regulations, including fraud, regulations that apply to certain types of business and because of nuisance cold-calling activities, Data Protection laws are also relevant.

Misrepresentation

The most common breaches of law concerning timeshare exit and timeshare compensation services concern misrepresentation. These include examples such as

  • Telling timeshare owners that their heirs will be forced to inherit their timeshares.
  • Stating that no timeshare companies will allow their owners to exit (many have clear exit options).
  • Misdirecting consumers on points of timeshare law, including quoting court cases that may not be relevant.
  • Telling consumers that a (fictitious) ‘class action’ or ‘group action’ is taking place and that they need to sign up to it immediately.

Misrepresentation can also include failing to disclose important information, such as the fact that free and lower cost exit options may be available directly from your timeshare company, or that consumers can make claims directly and free to the Financial Ombudsman Service or with their bank under the UK Consumer Credit Act.

Advance Fee Fraud

Where businesses demand upfront fees and then do not provide the promised service, they may be guilty of Advance Fee Fraud, which in the UK is a criminal offence under the Theft Act.

Unfair Contracts

Several businesses include restrictive terms in their contracts, such as not allowing consumers to check facts with their timeshare company or consult with other, alternative legal advisors. They will tell consumers that this constitutes a breach of contract and often make threats. But consumers are entitled to carry out enquiries that concern their legal rights and the proper provision of services, so such terms will often be considered in themselves to be unlawful. Consumers should check for such terms before signing contracts.

Distance Selling

Consumers have additional legal rights if they are being sold to in their own homes, over the telephone or internet or in a location which is not the premises of the business selling the services. An outline of these rules can be found on this UK government link.

Data Protection – Cold Calling and Other Unsolicited Contact

Timeshare owners are often besieged by unwanted phone calls, emails and text messages trying to sell them timeshare exit and timeshare compensation services. In many cases, those making such approaches have details about timeshares owned. Often when asked about how they obtained the details, they will say that it was from a ‘central register’. The very act of making the call Is usually a breach of the data protection laws, as is the possession and use of the personal data. Lying about how they obtained the data can be considered a further offence. To help safeguard personal data, you are strongly advised to not engage with such businesses and to immediately file a report with your national data protection authority.

Claims Management Companies (CMCs)

Official Claims Management Companies (CMCs) are regulated by the UK Financial Conduct Authority (FCA). Within the timeshare sector, they are usually involved in the processing of claims under the UK Consumer Credit Act – matters involving payments by credit card or where loans have been taken out to pay for timeshare purchases. Such claims are usually a matter for the Financial Ombudsman Service to rule on. Consumers can, though make such claims / complaints directly with the ombudsman, who will help in terms of the processes involved. Claims Management Companies should make consumers aware that they are able to pursue such claims directly and at no cost. CMCs must abide by strict codes, including

  • Acting honestly, fairly and professionally in accordance with the best interests of its customer.
  • Not engaging in high pressure selling.
  • Not cold calling.
  • They must not take any payment from a customer until the customer has signed an agreement with the firm.
  • They must allow the customer to cancel the agreement during a period of 14 days beginning on the day that the agreement is entered into and permit the customer to terminate the agreement at any time after that period. A full refund must be paid if the cancellation is within 14 days and if after, the firm must not charge the customer an amount in excess of what is reasonable in the circumstances and reflects the work undertaken by the firm.

If you are dissatisfied with a CMC, you can complain to the ombudsman using the form found on this link

Lawyers

The term ‘lawyer’ can often have a broad meaning and does not necessarily mean that a person using this title is legally qualified to (for example) represent consumers in court.  It is advisable to carry out due diligence and to ask about qualifications. Where a lawyer is qualified and regulated (as for example in the case of a UK solicitor), they are obliged to comply with regulations, which may vary from country to country. In the UK they are regulated by the Solicitors Regulation Authority (SRA)  and there are strict rules as to how they must conduct business, which focus on providing exemplary care to their clients, highly professional service and expert, accurate advice. They must also pay attention to the honesty and expertise and behaviour of any business they work in cooperation with, particularly those that may refer clients to them.

If you are dissatisfied with the services of a solicitor, you can complain to the Legal Ombudsman Service. Information on the complaints process can be found on this link.

Further assistance

Citizens Advice UKhttps://www.citizensadvice.org.uk/

European Consumer Centres Networkhttps://ec.europa.eu/info/live-work-travel-eu/consumers/resolve-your-consumer-complaint/european-consumer-centres-network-ecc-net_en#contact-ecc-net

If you feel you may require the services of an expert lawyer, we will assist with this. And ask them to provide you with a free initial assessment.

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