Representatives of the timeshare industry say more than half a million people own timeshares in the UK. For many, the experience is a positive one, but sadly not for all.
As reported by the BBC in 2018, a significant number of timeshare owners have encountered problems when trying to sell them or break free of the contract, leaving them with a property that continues to cost them a lot of money in annual fees, even when the timeshare cannot be utilised.
It is known that certain timeshare sellers have made false and inflated promises, which gave the impression that timeshares are a no-risk purchase that will be easy and quick to sell-on, and most likely at a profit. In these cases the buyer has been mis-sold timeshares.
Millions of pounds are collectively paid by timeshare owners every year, for maintenance charges on timeshare properties they don’t use or no longer want. It is common for these fees to increase each year, so the financial impact continues to grow.
As if that’s not enough, almost all timeshare contracts have a perpetuity clause that passes on the charges to their children and so on. And so, what was originally touted by the sellers as a smart investment can quickly turn into an enormous financial burden.
However, thankfully, the tide beginning to turn in favour of the timeshare owners!
Many are now looking for reprieve, emboldened by the landmark judgment that declared many of these contracts invalid. Based on this, industry experts have estimated that compensation claims for mis-sold timeshares could reach as high as two billion Euros.
So, if you or anyone you know has been a victim of mis-sold timeshares and are eager to seek compensation, this article should point you in the right direction.
A timeshare is a property, typically located in a popular resort or vacation area, and jointly owned by a number of people.
An individual wanting to own a ‘share’ of the property usually pays an initial lump sum, in addition to annual maintenance charges, to be able to use the property for a set period of time each year. You might also recognise a timeshare from some of the following aliases under which they are sold:
- Timeshare ownership
- Fractional ownership
- Holiday club membership
- Vacation club
- Holiday ownership
- Multi ownership
Before seeking compensation, you should first ascertain if you have been a victim of mis-sold timeshares. If you are still not sure, the following scenarios should help you:
- At the time of purchase, you were promised the value of the timeshare property would increase as the years go by, i.e. it was sold to you as an ‘Investment’.
- You were told the value of your timeshare would increase, leading to significant profit
- You were told your timeshare would be easy to sell (or the contract easy to get out of) by saying they would take the timeshare back from you at any time or sell it at a profit on your behalf.
- You paid a deposit of at least £100 or fully paid for the timeshare with a credit card or were talked into using a finance agreement to purchase your share.
- You were subjected to high-pressure and/or aggressive sales tactics.
- You were not given a cooling-off period of at least 2 weeks from when you signed the timeshare contract, thereby denying you the time to consider and reflect on the pros or cons of your decision.
- You have attempted to exit the timeshare agreement but were informed that it will only be possible if you sign a new agreement.
- Your contract is for at least 50 years or for life, i.e. no specified end date
- You used a form of credit to pay a third party company for additional service, but they defaulted.
There has been a breach of contract, i.e. the supplier failed to fulfil some of their obligations
This is not an exhaustive list, but if you can identify with any of the above practices, then you may have legitimate grounds to file a claim for compensation.
One such individual who was mis-sold timeshares is Andrew McNaught. He purchased a timeshare in Gran Canaria back in the 1990’s. Whilst he and his family originally made use of the property abroad, this stopped when his wife’s health deteriorated, and so the timeshare was no longer being used.
Nevertheless, the annual service fees on the timeshare still racked up, costing them hundreds of pounds every year. Andrew looked at ways to get out of the timeshare, but he was told there was already a waiting list of 600 other owners wanting to do the same. And worse was to come.
He responded to a company’s advert promising to help timeshare owners get compensation but was duped. When he met with them, they used aggressive (and illegal) sales tactics to hoodwink him into signing another timeshare agreement.
Andrew is just one of thousands across the UK to be a victim of this type of hard sell by unscrupulous companies here and abroad. Some are deliberately peddling misleading information and ensnaring unwitting Britons into financially draining contracts that can be very difficult to get out of.
What Should I Do To Get Compensation?
If you believe you have been mis-sold your timeshare through underhand tactics, here are some actions you can take to seek compensation.
1) Begin By Filing A Formal Complaint
Complain directly to the company as soon as you realize you have been misled into purchasing a timeshare.
Keep copies of all correspondence shared. If you call the company, write down the number of times you did, what you discussed and the actions, if any, they took. Doing this will leave a record that can be used as evidence, in the event that you need to pursue your claim further.
2) File A Credit Card Claim
If you are unhappy with the company’s response, your next action could be to file a credit claim. But, please note, this step is only for people who used a credit card when paying for the timeshare. Also, the payment you made must be under £30,000 and above £100 according to Section 75 of the Consumer Credit Act 1974.
If the above criteria applies to you, get in touch with your credit card company. Give them details concerning when you bought the timeshares, how you made the purchase and the amount you spent. Attach copies of receipts and any other relevant documents that give more information about the timeshares you purchased.
Also, give the credit card company information on what led to the breach of contract. In summary, try not to hold back any information you believe could help you in getting a refund.
Nevertheless, if your credit card company still rejects your request, despite all your efforts, then you should contact the Financial Ombudsman Service (FOS). At this point, your credit card company is obligated to inform you on how you can reach the FOS. Write to the Ombudsman, asking them to resolve your complaints, and they will review your case for free.
3) Consult A Legal Professional / Solicitor
If the above steps have failed to achieve a satisfactory conclusion, or if you would prefer for someone else to handle the compensation claim on your behalf, then it is time to contact a legal professional. We suggest you make contact with an experienced claims advisor, which you can do here if you wish, or a solicitor with knowledge of timeshare compensation cases.
They will first go through your timeshare contract to identify any loopholes or flaws in it and review the particulars of your case, to see if you have an eligible claim. Once a valid case has been identified, he or she will be able help you through the process of nullification, compensation, and represent you in court.
We urge you not to try to win a court battle on your own. Timeshare companies are experienced in such litigation and are notorious for dragging matters on for as long as possible. But with the help of a solicitor who has your best interests at heart, they will seek to get you the full compensation you deserve within the shortest time possible.
What Will Be The Duration Of My Claim?
Typically, cases dealing with mis-sold timeshares can take anywhere from 6 – 18 months to be finalised. Thus, the duration of your claim will largely depend on two things:
- The time needed to collect and collate evidence
- The readiness or refusal of the company to admit liability of mis-selling the timeshares to you
Yes, your solicitor can help you bring your ownership of the timeshares to an end if you are facing the following problems:
- You can’t use your timeshare any longer due to a change in your circumstances such as retirement, bankruptcy or redundancy.
- You are having difficulty keeping up with the maintenance fees/costs.
- Your timeshare contract has a perpetuity clause, which means its ownership will move on to your next of kin in the event of your demise.
Once you have decided to claim for damages, here are some things to keep in mind:
1) Know The Possibilities Of Exit
One of the important things to note is the exit possibilities available to you. There are some timeshare contracts that may be difficult to exit.
On the other hand, many of these contracts do not need an exit strategy. Your lawyer will reveal to you which category your contract belongs to and the possible steps to take.
2) Keep Your Decision To Yourself
Do not tell your timeshare company about your plans to file for damages or exit the contract. If you do so, they could subject you to different bullying tactics and give you false info to dissuade you from your plan.
The law gives you a time limit of six years, starting from the date you signed the agreement, to make a compensation claim on your timeshares.
If you are currently conversing with a company that wants to resell your timeshare, know that they could be out to scam you.
According to the Timeshare Consumer Association (TCA), 9 out of 10 timeshare reselling companies are setup to defraud customers. To be on the safe side, do not make any sort of payments to the company and immediately cut ties if they ask you for upfront payment.
Also, check out the TCA website to look at the required code of conduct for all timeshare resellers and make sure the company is genuine. Their website contains a list of genuine timeshare resellers approved by the TCA that you can use.
We understand if you feel quite hopeless about your chances of ever being compensated for mis-sold timeshares. We are also aware of the underhand tactics timeshare companies can use to decline responsibility when it comes to paying compensation.
The key is to remain persistent and, where necessary, seek legal representation. It is worth noting that most solicitors offer a no win-no fee arrangement, so if you want to start the process and have a no-obligation chat with an experienced claims advisor, complete our on-line form. Our aim is to point you in the right direction.