Summary of the Royal Courts of Justice Tribunal Ruling by Judge Timothy Herrington.
This case was heard on 19 June 2018 and revolves around a validation order made by the Financial Conduct Authority (FCA) which validates (makes legal) loan agreements taken out by clients of Azure Resorts Malta, using Barclays Partner Finance (BPF).
The loan agreements were made by Azure Service Ltd between 1 April 2014 and 24 April 2016, with this company not being authorised as a licenced broker to arrange or introduce clients to BPF. On finding out that these loan agreements were made by an unauthorised entity, BPF applied to the FCA to have the loans validated or made legal.
This validation order was issued, affecting some 1,444 clients and could cost Barclays around £47 million.
An appeal by the clients and their legal representatives forced the FCA to apply to the Upper Tribunal Tax and Chancery Division of the Royal Courts of Justice for a hearing on the legal implications and guidance to overturn the validation Order.
On 1 August 2018 Judge Timothy Herrington issued his judgement.
He ruled that the FCA did not take into account “Client Detriment” when they issued the validation order, his ruling was that the FCA re-evaluate that decision and take into account the client detriment.
He stated that the client detriment revolves around the following:
- Clients were not given sufficient information as to the terms and conditions of the loan agreement required by law;
- There were no major credit checks made as to the affordability of the repayments such as income versus outgoings reports;
- The length of the loan agreements were not explained, with client under the impression that they were for two years;
- Clients were pressured into signing these agreements;
- False representations were made to clients relating to the financial impact of regulated agreements;
- Clients were subject to long high pressure sales tactics to purchase the timeshares;
- Clients were sold timeshares which were not appropriate for them;
- Vulnerable consumers were treated inappropriately;
- Concerns about commission arrangements and disclosure thereof.
The FCA must now re-examine the original validation order and take into account the client detriment statements of the borrowers.
With this ruling it makes it almost impossible for the FCA to uphold the original validation order, therefore it must overturn the previous decision and rule that these loan agreements cannot be validated and are thereby unenforceable in law.
This means that all 1,444 clients will be entitled to be repaid all the money plus all interest paid.
Once the FCA issued a cancellation of the original validation order, this will no doubt have an effect on any loan issued by a timeshare company through BPF. Although the company brokering the agreement may be authorised, the points listed above may make it possible for any loan to be contested.
This will be of significant interest to all Silverpoint clients who entered into contracts under the investment weeks scheme.
At present it is not known how long the FCA will take to issue their findings.
Latest news surrounding Tauro Beach.
The scenes witnessed a few weeks ago of the destruction of homes situated on Tauro Beach have been the subject of many news articles, the local people are understandably very angry.
This was done without any apparent court orders, which leaves us to believe that the destruction may just be illegal, even if the land is owned by the Cazorla’s.
It does leave us to wonder how the members of the Anfi resort must feel about this, that the company they pay high annual maintenance fees can behave in such a manner?
Do they actually understand what is going on?
It also begs the question how the Ambassador for Anfi David Silva, the renowned footballer and local boy must feel about how the company he represents in advertising is treating his own people and neighbours?
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For the full story of the whole project search Tauro Beach in the search box.
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