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Lowcost Travel Group Administration

Although this is nothing to do with the timeshare industry, it was felt that an article on this company was needed.

 

Lowcost Travel Group announced on Friday 15 July 2016 that it had been placed into administration, the company dealing with this is: Smith & Williamson and CMB Partners. Customers are instructed to contact Martyn Frazer or Paul Stagg at the following email address: [email protected]

 

It is believed there are currently around 27,000 customers already at resorts, and 110,000 with bookings, who have yet to travel. For those already on holiday, there should not be any problem as their flights and hotels should have already been paid for. It is those yet to travel who will have the problems. The reason for this is the company operated on very narrow margins, it relied on new bookings to help the cash flow and pay for flights and hotels of those already booked. This does seem a little odd, that a company can operate in this way, using payments from new bookings to pay for ones booked earlier. But apparently this is not unusual in this sector of the industry.

lowcost travel

Lowcost Travel operated from bases in the UK, Spain, Switzerland and Poland, the number of job losses will be: Gatwick 120, Krakow 264, Mallorca 60 and Switzerland 7.

 

Although the redundancy numbers are low, it is the cost to the customers that will be the greatest. Those with bookings and yet to travel have been advised they may have to cover the costs of flights, pay transfers and hotel accommodation locally. They may be able to claim back through travel insurance or credit cards, but the CAA  (Civil Aviation Authority) who operates the ATOL (Air Travel Organisers Licence) scheme which is a safety net for these eventualities, has stated that these holidays are not covered by them. The reason is that Lowcost Travel relocated to Spain and being registered as an entity in Mallorca, are not in the CAA jurisdiction, the CAA warned about this in 2013. Lowcost Travel had dismissed this by stating they were covered under the Spanish scheme.

 

So why did this happen?

 

The reasons being given are, that due to the Brexit referendum, many customers delayed making their bookings, resulting in the cash flow problem, then there was the fall in the pound against the euro after the leave vote. This had the impact of reducing bookings further as they became too expensive. The Guardian newspaper published an article 10 July 2016, on the number of people opting for holidays at home, the article stated that it would cost an extra £245 for a family of four because of the 10% drop in the pound. (see link at the end).

 

Other reasons are the increased terror threat, which has impacted the travel industry. The list of destinations according to Smith Williamson are:  Egypt, Turkey, Tunisia, Orlando, Brussels, Paris and this list will now include Nice.

 

Lowcost Travel was founded by Paul Evans in 2004, he had previously been resort manager for Club 18 -30. According to their last filed accounts, in the year up to October 2014, they had sold holidays to the tune of £477 million, with a pretax loss of £47,000. It is not hard to see what the impact a drop in bookings would have by these figures.

 

If you have booked and require any information please go to the following links.

smithwilliamson

http://www.smith.williamson.co.uk/news/8711-lowcosttravelgroup-ltd-smith-williamson-and-cmb-partners-uk-appointed-joint-administrators

 

http://www.lowcostholidays.com/

 

The above link has email addresses for customers who have booked with any of the companies not covered by the administrators.

 

The Guardian article on UK tourist industry.

 

https://www.theguardian.com/travel/2016/jul/10/brexit-and-the-uk-tourist-industry

 

BBC News link

 

http://www.bbc.com/news/business-36810558

Links to information on Section 75 and how to claim from your credit card.

Claiming Money Back From Your Credit Card.

 

 

If you have any questions about timeshare or holiday ownership, resales or claims, Inside Timeshare will find the answers.

 

One Foot In The Grave!

“I don’t believe it, I just don’t bloody believe it!” said Victor Meldrew. But yes it is true, the Supreme Court has just issued their fourteenth and fifteenth judgements.

 

Canarian Legal Alliance just keeps them coming in, they announced this news late yesterday 13 July 2016. On Tuesday the court awarded 18,500€ to a UK family and declared their contract null & void because it was longer than the 50 years stipulated by law. The following day Wednesday another UK family had their contract declared null & void and awarded 13,000€, including double the deposit back for payment within the 14 day cooling off period. They had also been sold floating weeks, again in contravention of the laws laid down.

 

The Supreme Court has now consistently ruled that contracts over 50 years, floating weeks and points along with the taking of deposits within the cooling off period, are contravening the laws on the selling of timeshare in Spain. It now has to be asked when other countries are going to enforce these rules which were laid out by EU Timeshare Directives?

 

Spain is obviously leading the field in this area, with these judgements all lower courts must now abide by them.

anfi logo

So, just in the past week Anfi have been penalised for considerable sums, the question now is how long can they sustain this? There are more cases waiting to be heard by the Supreme Court, all because Anfi have taken the decision to appeal rulings by those lower courts. If they had any sense, I would have thought they would pull out of those appeals and just admit defeat.

 

The next question is how long will it be before other companies such as Diamond and Club la Costa have more cases brought against them? Is it the death knell for timeshare in Europe?

 

How will this news affect Apollo Global Management after their takeover of Diamond Resorts International? There are already rumours across the great lake that Wyndham is looking to buy the shares, the price has already been put at around $36 to $39 a share. I hope to get some insight into this from my American colleague Irene Parker who writes for the financial journal The Street, ( see link for her article on Hilton). Inside Timeshare will keep you posted on this as and when the news comes in.

 

Once again Inside Timeshare congratulates these two families and the legal team of Canarian Legal Alliance for their splendid work. They certainly have paved the way for others to follow.

 

If you need any information or advice on any timeshare related matter, Inside Timeshare will do its best to provide you with the best answers.

 

https://www.thestreet.com/story/13636683/1/hilton-worldwide-and-spinoffs-are-good-investments-now-or-later.html

TWO MORE SUPREME COURT RULINGS FOR THIS WEEK

 

 

Supreme Court Roller Coaster

It would appear that the roller coaster of rulings from the Supreme Court just isn’t going to stop, it was announced on 8 July 2016 that Canarian Legal Alliance had just received ruling numbers 12 and 13.

CLA Logo

In ruling number twelve, their Norwegian clients had their contract cancelled and were awarded 31,998€ plus all the legal fees. The court has upheld previous judgements that contracts over fifty years and floating weeks are illegal.

 

Following on from that, ruling number thirteen was for a family in the UK, they were awarded a total of 82,808€ including double the deposit paid, legal fees and interest. As before the same principle was applied, contracts cancelled due to being over 50 years, floating weeks and the taking of a deposit within the 14 day cooling off period.

 

So within two days Anfi has been penalised by over 114,806€ for breaches of the timeshare laws. This does go to show the Spanish legal system will not tolerate companies who defy the legislation put into place to protect the consumer.

tribunal supremo

It is a wonder the timeshare industry has been able to get away with these illegalities for so long. Could it be because they held so much influence in the past they actually believed they were immune from the law?

 

Yet, we hear nothing from the trade body for the industry the Resorts Development Organisation, or even TATOC, the so called owners committees association. Surely if these two organisations were what they purport to be, I would have thought they would at the very least, make some kind of statement that they would sanction any member who still broke these rules. It is their members who are selling products deemed illegal, but not a word of warning to them.

 

It must also be pointed out that although these rulings have been made against the Anfi Group, it affects all timeshares whether fixed weeks, floating weeks or points sold anywhere within Spain, Balearic Islands or the Canary Islands. These rulings apply to any company that has not complied with the laws which came into force in January 1999.

2 MORE SUPREME COURT SENTENCES ( THATS 13 SO FAR )

 

So once again congratulations to the two families and well done to the legal teams at Canarian Legal Alliance.

champagne glasses

If you have any questions about this subject or anything about timeshare, resale or claims companies, Inside Timeshare will do its best to give you the answer. If we don´t know we will find out.

Warning to Diamond Owners from across the Atlantic.

Since Inside Timeshare published the article on the Apollo Global Management buyout 30 June 2016

 

http://insidetimeshare.com/700-2/

 

We have been informed that Apollo and Diamond have issued a Fraudulent Calls Alert in the United States, this is published below.

 

Fraudulent Calls Alert

It has been brought to our attention that some of our members have been contacted by a company purporting to be representing Apollo Global Management, (Apollo) and referring to the recent merger agreement between them and Diamond Resorts International®. These calls are not genuine; Apollo does not, and will not, engage in any communication directly with any Diamond owner or member. Please be extra cautious when accepting contacts from anyone using any such introduction in which to discuss membership issues, particularly if you have been ‘cold called’ and/or being offered services such as resales and relinquishment options. Various tactics are sometimes used to manipulate timeshare owners into making payments on the pretext of promises made to resell, transfer or relinquish their ownership. Members can be persuaded to pay a significant up-front fee and very often, no service is provided.

 

We are publishing this as a preliminary warning to Diamond owners, no doubt as has happened in the past what goes on across the Atlantic will surely happen in the UK and Europe. The advice is be cautious and do your research before committing to anything. Inside Timeshare would like to thank the American readers for this information.

 

If you are contacted in this manner Inside Timeshare would like to hear from you so we can publish details in order to warn others.

Diamond Resorts or A Nightmare on Timeshare Street.

sunterradri logo

Diamond Resorts were unknown in Europe until the takeover of Sunterra in 2007, for many members, they believed it was going to be a new start. Sunterra formerly Grand Vacation Club had a reputation that was to say the least heavy handed, the sales side was aggressive and showed no quarter to those pulled in from the streets. Long standing members with fixed weeks refused to change as they had originally been sold their timeshares as “investments” in property. They also had the right to vote on maintenance fees and other matters which affected the resort they owned.

 

When Sunterra filed in the US for Chapter 11, which is the equivalent to filing for bankruptcy, many owners wondered what would happen to their “investment”. For those on holiday the talk around the pools and bars was what would happen next, rumours abounded. Information was non existent, the sales decks had been closed with all the reps being laid off. There were still a few of the in-house reps but they had no idea what was going on.

 

It was then announce that a new company from the States was looking at taking over from Sunterra. The takeover was announced in the Las Vegas Review Journal 28 April 2007. Steven Cloobeck´s privately owned Diamond Resorts paid around $700 million, and also took on responsibility of Sunterra´s debt of $375 million. Was this the new beginning the owners had been waiting for?

 

Unfortunately, as time has moved on, it has turned into a nightmare for many.

 

The points system was marketed very aggressively, more so than under Sunterra, owners were basically forced into converting. Around 2008 the first additional levy was introduced, Diamond claimed it was due to the state of the Euro to the Pound. This was only the start, in the first three years management fees increased by around 20-25% annually, for many owners this was a huge burden and they wanted out.


Keep Reading

Diamond Resorts Bought by Apollo Global Management

News came in to Inside Timeshare yesterday afternoon 29 June 2016 that a Private Equity Firm, Apollo Global Management had bought Diamond Resorts International.

 

The deal is reported to be worth $2.2 Billion, the stock for Diamond had risen from $25 to $29 a share within hours of the announcement. One analyst in the States, Chris Demuth has already suggested that the Wyndham Group may even purchase the company. He believes that Wyndham may even pay around $36 to $39 a share.

dri logo

Apollo Global Management was founded in 1990 by Leon Black, he was a former banker with Drexel Burnham Lambert. Drexel had closed earlier that year after a securities scandal which resulted in the bank having to pay $650 million in fines. Being unable to repay a $100 million debt it collapsed.

 

According to the online financial journal The Street, Bloomberg had called Drexel Burnham Lambert “Renegades of Junk”, due to its involvement in the junk bond market. Irene Parker a writer for The Street and a Diamond timeshare owner herself, believes that this title is more fitting for Apollo Global Management after its acquisition of Diamond Resorts. (follow link below).

 

http://www.thestreet.com/story/13624491/1/is-apollo-returning-to-its-junk-roots-with-its-acquisition-of-diamond-resorts.html

 

In her article for The Street, she explains her anger at the way Diamond has treated owners of its timeshares. She is in the process of writing a series of articles highlighting this, Inside Timeshare will be keeping you informed as they appear.

nyt logo

On the subject of the share prices, Inside Timeshare published an article in April, based on a report by Gretchen Morgansen of The New York Times. It highlighted the plunge in share prices following a series of reports about Diamonds treatment of owners, especially the elderly. It followed the story of a 77 year old lady called Mary Ann Gutierrez, she was subjected to an intense presentation by Diamond reps and basically held captive for around 5 hours, It was an attempt to upgrade her for a steep upfront fee, even though she had firmly told them no she was not interested.

 

The article also highlighted how Diamond hike up the maintenance fees after it buys a bankrupt resort. European owners are well aware of this themselves, after all they did see huge rises when Diamond took over from Sunterra around ten years ago. We are also well aware of how they make it virtually impossible to get out of the contracts. For those who purchased in Spain there is at least hope that these contracts can be declared “Null & Void”, also resulting in all the original payments being given back. All this has been made possible due to the strengthening of the laws in Spain, and the rulings of the Supreme Court, these can be found on the Canarian Legal Alliance website. (see following links).

 

http://insidetimeshare.com/diamond-resorts-international-share-price-falling/

 

http://www.canarianlegalalliance.com/diamond-resorts-court-case-victory-2/

 

If you have any questions as to how this may affect you, contact Inside Timeshare and we will try to find the answers for you. If you would like to know where you stand as far as making a claim or how to get out of your contract Inside Timeshare will be happy to give you the best advice and information possible.

 

My Thoughts Today End of June

So here we are the end of another month and half way through the year, and what a month it´s been. More rulings from the Supreme Court, more clients awarded substantial amounts and even more cases in the pipeline.

 

The article published 13 June 2016, regarding maintenance arrears and debt collectors has had a great response. Lots of support for the plight of Mrs B, including some personal messages from some legal eagles on how to help her, for that Inside Timeshare is grateful.

 

So far there has been no contact from Network Credit Services, even though they gave her a final notice to pay up within 7 days. Since then she has had her phone connected to BT Call Guardian, so she can block any unwanted calls. Having spoken with her today she is in good spirits especially after giving her the news of support coming in from many different quarters.

debt collectors

On the point of timeshare companies actually going to court for maintenance arrears, Inside Timeshare has been advised from a reliable source that one company has indeed done so. The owner actually had court officials knocking on his door to enforce the order to pay Anfi the arrears. We are waiting for written confirmation of this. Again are these companies by-passing the Spanish legal system to enforce payments, due to the fact that under Spanish law those contracts are illegal and unenforceable? Is it a case that the courts in the UK need to get a grip and realise what is going on?

 

There is still no news from the courts regarding the RCI Action, being brought by Edwin Coe LLP. As stated before the wheels of the law do move at a rather slow pace, but when we find out we will let you know.

 

On 14 June 2016, the spoof article on the new member to the blog writers trade association was published, it was fun to write and certainly made people laugh. But underlying the article was a very important point, this has been borne out by some of the comments received. It was very surprising to find how many people actually agreed with it. Yes it was scathing, but that was point. A trade body set up to regulate an industry should do just that, not allow its members to do as they wish and ignore the laws that are in place to protect the consumer.

 

The TCA also published an article about Silverpoint Vacations (an RDO member), losing at the courts in Tenerife. The full translation of the document shows the case was another to do with the perpetuity contract being illegal. In their article the TCA do state which company brought the case on behalf of the client. But it does show the courts are finding on behalf of the consumer.

 

Also this month we have highlighted a company which is stating they can claim against the timeshare companies. From the many enquiries received and the information given by those who have attended meetings, our first impressions have been found correct. Again this goes to show that in-depth research is required in order to safeguard yourself.

on holiday 2

The summer holiday season is also now upon us, for those travelling to Europe, the only advice is beware the ticket touts. Remember if you do decide to purchase anything such as timeshare or one of the numerous holiday clubs, it is illegal to take any payments within the 14 DAY COOLING OFF PERIOD. Do your due diligence, if it sounds too good to be true, alarm bells should ring. If you are unsure, then don’t sign. Happy holidays.

Maintenance Arrears and Debt Collectors.

Further to Fridays Article 10 June 2016, Inside Timeshare has been doing a little digging. The TCA published a list in August 2015 of timeshare companies that have threatened legal action to force payment of the maintenance fees. The first part of the list are those that have threatened legal action using either debt collectors or solicitors, in some cases even bogus lawyers.

tca logo

The above companies have made the threats, but as far as can be ascertained have never actually taken any case to court.

The following companies have taken legal action but what the success rate has been is at present unknown.

So where do you the owners actually stand?

Keep Reading

Breaking News: Its A Strike!

Well, well, well, they just seem to keep on coming, it was announced yesterday, 7 June 2016 by CLA of yet another judgement by the Spanish Supreme Court.

victory2

This now brings the number made to an incredible TEN, with apparently many more waiting to be heard. The latest ruling is again against Anfi, this time the client is English. In this ruling the court once again reaffirmed that Floating Weeks are illegal, also reaffirming their previous rulings that contracts in Perpetuity are also illegal.

 

The court has awarded them over 20,000€ plus all legal expenses.

 

Yet another blow to the timeshare industry, and they still believe that these ruling are wrong. How many more will it take for them to realise that the game is up, that they should now put their house in order and start playing by the rules. It is only a matter of time before other States in the EU implement the same rulings. Once this happens we will see cases being brought for timeshares not sold in Spain.

 

Once again congratulations to this particular client and well done the Legal team at CLA.

champagne

If you require any information, or have any comments Inside Timeshare would like to hear from you, if we don’t know the answer we will find it.

 

The Villacana Story: A Repeat of Past Deeds.

The world of timeshare is full of controversy, from perpetuity contracts to owners being forced to continue paying maintenance fees even when unable to do so due to age etc. One of these is the ongoing argument between MacDonald Resorts and various owners groups, the most recent being Villacana.

villacana

There is an ongoing argument between these two parties that has been running for several years, this has resulted in the MacDonalds Resorts Legal Action Group, MRLAG. This has been set up to fight the proposals by MacDonald Resorts to transfer all fixed week fixed apartment owners to floating weeks. Now this does seem surprising as floating weeks have been declared illegal in Spain.

 

So why are the owners against this, apart from floating being illegal?

 

It would seem it is about control. They have seen this from other resorts where this was pushed through. As fixed week fixed apartment owners they have a say in the running of the resort, after all they are technically the owners. When a company like MacDonalds changes to floating weeks they basically become the owners of the fixed weeks and apartments, which then gives them control.

mcdonaldsresortlogo

 

 

 

 

 

 

 

With many of the other resorts where this has happened, the main argument was that the owners did not want to go ahead with the proposal. But the votes have not gone their way, many owners complaining that MacDonalds received the necessary vote because they controlled any vote not cast by a member, either in person or by proxy. Not to forget that the resort developers control any votes for weeks not sold. (see previous article)

Manipulation of votes by resorts and resort owners

The other point in this argument is that the floating weeks do not guarantee a holiday as they are subject to availability. Also MacDonalds as the controlling owners have the right to sell or rent these weeks as they see fit, even to non members, and at the member’s expense, plus while still enjoying your maintenance fees.

 

Then we have the problem of getting out of your timeshare, we all know that there is no resale market. But MacDonalds offer what can be described as a derisory solution. Every two years offering a limited number to hand back their timeshare, but at the cost of 4 years maintenance.

 

The TCA have been highlighting this for some time with regular updates.

 

So what of TATOC in all of this?tatoc logo

 

Well as we know TATOC is supposed to represent the timeshare owners committees, in other words you. But as we have seen they are throwing their full weight behind the MacDonalds Proposal. For those of you who are not in the know, TATOC receive the bulk of their funding from the timeshare industry, such as MacDonalds Resorts who pay annual fees to be “ACREDITED” by TATOC.

 

Somehow I don’t think this is actually in the interests of you the owners / members. I agree that the owners committees should have good relations with the resort developer, but this should be on an equal partnership. After all it is your money that is paying for it and keeping the resorts open and maintained.

 

It certainly seems that it is time for new organisations and associations to be set up to serve your interests, as well as a new and non industry related body to oversee the developers and resorts. So get rid of TATOC and The RDO, then you may at last have some say as well as justice.

 

If you have any questions or thoughts on this subject Inside Timeshare would be pleased to hear from you. If you want any information regarding any timeshare matter we will try to answer it, if we don´t know we will find it out.