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Law 4/12

Tribunal-Supremo

Spanish Timeshare Laws Simply Explained

Over the past few months Inside Timeshare has received many enquiries regarding timeshare claims, in this article we look at the law in Spain and what constitutes a valid claim.

In December 1998 Spain passed Law 42/98 which came into effect on 5 January 1999, this was a result of the European Timeshare Directives which were put into place to protect consumers. Under these directives each member state had to put into their own domestic laws regulations governing the sale of timeshare.

Spain was one of the first to do this, as a result they have some of the strongest regulations in Europe.

For a long time many resorts / developers failed to abide by them, continuing to sell the same way as before. This has now resulted in many cases going to court with resorts / developers being penalised for their failure to comply.

At first, many cases taken to court by consumers were being lost as the resorts successfully argued that they were in compliance of the laws. This all changed in March 2015, when the Supreme Court in Madrid ruled on the very first timeshare case.

justice

This case involved a Norwegian lady who had a case against Anfi in Gran Canaria, the case took around 5 years to complete, but it had a profound effect on cases to follow.

The timeshare laws which have been the subject of consistent breaches have been the taking of deposits or any payment within the cooling off period, this also includes by a third party. Many resorts tried to get around this by using Trust Companies, but the court has also ruled that this is indeed a third party.

The other main area of contention was the perpetuity contract, the law states that contracts should be for a minimum of 3 years and a maximum duration of 50 years.

Both of these have been ratified by the Supreme Court on many occasions, which now puts them into jurisprudence. What this means is that they are no longer up for discussion and all courts must abide by them.

There have also been some other significant rulings made by Spain’s Highest Court which have strengthened the law and benefited consumers.

The points and floating week systems is another which the Supreme Court has also ruled on and is now enforceable by all courts in Spain. The reasoning behind this ruling is that these systems have no actual substance, unlike the fixed week fixed apartment system which was the original timeshare model, there is no week number or apartment number attached.

With the old fixed week system you were guaranteed the week and apartment assigned, this could be changed using either the internal exchange system or one of the major exchange companies. So it was actually flexible. It also made it impossible for the resort to oversell membership, as they could only sell 51 weeks of each apartment.

With the points and floating systems you actually own nothing, you are a member of a vacation club with the right to use subject to availability. This also allowed the resorts to oversell the membership as they were not governed by the 51 weeks in each apartment. This has obviously led to many complaints of not being able to book the weeks that members actually wanted.

Another major breakthrough came in January 2017, when the Supreme Court ruled against Silverpoint. This came about due to many cases against Silverpoint for selling packs of weeks as an investment.

The theory behind these sales was purchasers would buy a series of weeks, which the company promised to sell within 2 years, with the purchaser making a profit. Very few if any ever achieved this, usually the story was that what they had purchased was not selling well and they would need to upgrade to a better resort in order to sell. This has left many with huge loans as these were financed mainly by Barclays Partner Finance, with the loan agreements being completed by the sales staff.

There were many cases taken through the courts but Silverpoint successfully argued that the purchasers were investors not consumers.

The first case involving a UK purchaser ended up at the Supreme Court, the total time from start to finish was around 5 years. This court ruled that these purchasers were indeed consumers of a timeshare product and not investors. The thinking behind this ruling was that maintenance fees were also part of the purchase, also the court believed that to be classified as investors, this must be a primary source of income. This resulted in these consumers having full protection of the timeshare law, which also maintains that timeshare should not be sold as an investment.

Since the first ruling in March 2015, there have been 84 rulings made by the Supreme Court, each and everyone backing up the previous one. At present there are still around 100 cases pending and waiting to be heard by this court, some of these will also bring new changes and clarification to the laws.

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There has also been an update to the 42/98 law with the introduction of Law 4/12 which has included the changes brought in the Timeshare Directive of 2008.

So unless you purchased or upgraded in Spain after January 1999, have at least one of the major points ruled by the Supreme Court you may not have a valid claim. You will also need to employ the services of a Spanish Registered lawyer, preferably one with the experience of timeshare claims.

At Inside Timeshare we have heard from one consumer who decided they wanted to employ the services of a lawyer registered to practice in Spain but of their own nationality. His claim failed. The lawyer did not have the knowledge or experience of this complex area of law, believing that because of the Supreme Court rulings it would be an easy case to win. This client has now taken on the services of another lawyer with the experience in this field to lodge an appeal as he was not given the correct legal advice. This has obviously cost him more, hopefully he will win the appeal.

This does go to show that just because the Supreme Court has made these rulings, it is in the end down to the lawyer or law firm that you engage, if they do not have the knowledge or experience in this field then you may end up losing a lot more.

If you have any question on this subject or wish to check if you have a valid claim contact Inside Timeshare and we will give you the facts.

hand up

The Tuesday Slot: Giving You a Helping Hand

For many people it can be a daunting task to prepare a complaint against a large company, how is it written, who do you file it with? These are all questions that need to be answered.

In Europe the matter of making a complaint against a timeshare company has actually become easier, especially in Spain, where the laws are on the side of the consumer. But trying to deal with a company that has for the most part tied you up in contracts and legal jargon, has resulted in many complaints by consumers just being put aside with the feeling what is the point?

In today’s article Irene shows how to write the complaint and who to file it with, the most important point is don’t let it get you down there is always help out there. So on with the advice.

How to File a Timeshare Complaint

complaints

By Irene Parker

September 12, 2017

After Inside Timeshare received 135 US timeshare complaints (as of September 8, 2017), this guide evolved to use as a blueprint to file a complaint. Previously, we published an article called “The 3Rs or F of Timeshare” because no one should have to own anything in perpetuity if they can no longer use or afford the product.

http://insidetimeshare.com/part-ii-three-rs-timeshare/

How to File a Timeshare Complaint

  1. Name (s) and age of member
  2. Phone Number
  3. State of Residence
  4. Number of points owned per contract
  5. Member Number
  6. Loan Number  
  7. Current Maintenance Fees
  8. Total purchase price per contract
  9. Location purchased
  10. Sales agent and sales agent ID Number if available
  11. Original Loan Amount, Loan Number and stated interest rate
  12. Current Loan Balance
  13. What do you want? Do you seek Refund or Relinquishment?
  14. Why? Is it due to Deception, Health, Age or Financial Burden?

If your investment is $40,000 or less and you owned and used your timeshare for ten years or more consider relinquishment.

Availability:  Dissatisfied in general with availability complaints will go unheeded.

MOST IMPORTANT – Purchase Timeline

It is better to state your narrative as a narrative referring back to the contracts and figures at the top of your complaint. Begin with when you first became involved with the company and proceed chronologically. Keep your history brief up to the point when things began to go wrong.

The most common complaint is bait and switch. If you feel you were deceived list the reasons why.

who what

How Advocacy Works

Email Inside Timeshare your complaint if you would like to talk to someone about your concerns. Before you begin, raise your right hand. Do you promise to tell the truth, the whole truth, and nothing but the truth, so help you God? It is important to present your information factually and without opinion.

Consider becoming a volunteer report writer if you have reporting experience.

If you have questions, email Irene Parker – ireneparker377@gmail.com

Cell – 270-303-7572 EST – Feel free to call any day of the week between 1 to 5:00 PM EST or if you are unable to prepare your own report.

We are not attorneys and we do not provide legal advice. We have researched regulatory agencies and are here to direct consumers to the appropriate regulatory agencies. Agencies are listed below. We have also developed media relationships and will continue to work with broadcast and print media to alert the general public as to what questions to ask before buying a timeshare. Life events, like a hurricane, can change your life in an instant or a day. If your timeshare provides no secondary market, it can make a member feel a hostage to their vacation plan. Contact a member of the Licensed Timeshare Resale Broker Association to find out whether your timeshare has a secondary market.

http://www.licensedtimeshareresalebrokers.org/

After you complete your complaint email it to the appropriate resort department. Expect to be denied. Typically your resort reviewer will restate your concerns, conduct an investigation and report back that the sales agent (s) denied your claims. It’s a negotiation so if denied, file a rebuttal.

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If you feel you are a victim of deceit and bait and switch, send us a copy of your complaint. An Advocate will file your complaint on your behalf with the firm’s public relations office and ARDA, the timeshare lobby, for violating ARDA’s Code of Ethics which can be found on ARDA’s website. We do not recommend owners make the voluntary opt in or opt out contribution on your maintenance fee invoice for ARDA ROC (Resort Owners Coalition). ARDA is basically a PAC that lobbies for the industry when the issue is one that is at odds with members. We will also include NTOA National Timeshare Owners Association and the bank that financed your loan or issued a credit card. By having the Advocate file on your behalf, we can track complaints, documenting a pattern of criminal behavior.

Mark your email urgent if you are in financial distress. It is best to file a complaint before the debt collectors are hounding. It may take up to 30 days to hear back from the resort. Resend in three weeks if you have not heard back. If you feel you were a victim of deceit and bait and switch, give the resort a week to respond before filing regulatory complaints.

The member will report back to us with a positive or negative outcome. Due to the required non-disclosure or mutual release form, terms and conditions will not be discussed. Just report a positive outcome or resolution.

If your resort denies your claim begin filing complaints with regulatory and law enforcement agencies beginning with the Attorneys General of the state where you signed your contract, where you live and where your resort is domiciled. It can take a month or more to hear back from an AG but once your complaint has been accepted, debt collectors are not allowed to call. You can find any Attorney General by searching the state and Attorney General.

office of ag

If there was an unauthorized credit card charge or you feel you were deceived into signing off on a loan, you should file with the Consumer Financial Protection Bureau under the mortgage option (even if no mortgage) and select the bank that financed your loan or issued a credit card. One common complaint is that the buyer was told they could get a lower interest rate from a bank or credit union. File with the CFPB only if there is a loan outstanding or a credit card was used.

You should file a complaint with the state Real Estate Division in the state where the agent is licensed if your complaint is against a sales agent. The Advocate can help you if you don’t know the agent ID number. Timeshare sales agents are real estate licensed in most states.

File with the Better Business Bureau, although the company’s BBB rating can be misleading in that the BBB only rates how efficiently a company responds to complaints.

The definition of Financial Institution Fraud under the FBI’s definition of White Collar Crime is “deceit, concealment, violation of trust and bait and switch”. The FBI assigns Financial Institution Fraud the highest priority. You can read about White Collar Crime on the FBI website, but complaints are filed at IC3.gov. This is somewhat confusing because IC stands for Internet Crime and people think it has to be internet related. IC3.gov is just the name of the portal.

fbi

 

Most important, consider reaching out to local or national media. Reporters look for content and are surprisingly easy to reach. Write an article about your experience. The more people who come forward, the more the public is made aware of pitfalls before engaging in a timeshare sales presentation.

Our “Chicken Soup for Timeshare’s Soul” Inside Timeshare article is linked at the end of this article explaining what to expect or not expect when you file with a regulatory or law enforcement agency.

Summary of Regulatory and Law Enforcement Agencies

  • Attorneys General where you signed, where you live and where the resort is domiciled. Search (state name) Attorney General for contact information. Most AG complaints can be filed online.
  • The Real Estate Division of the state where the agent is licensed if your complaint is against the agent. “Right-to- use” membership programs are not defined as real estate, but the agent is typically a licensed real estate agent.
  • The FBI under the IC3.gov portal if deceit or bait and switch.
  • ARDA if you feel ARDA’s code of ethics has been violated.
  • The media – the court of public opinion is often the only court available. Inside Timeshare, published in Spain, publishes timeshare articles online focusing primarily on the need for reform and oversight.
  • The Consumer Financial Protection Bureau under the mortgage option selecting the bank that issued the travel credit card or financed your loan.
  • The Federal Trade Commission – due to lack of secondary market
  • The Better Business Bureau
  • Lawmakers – The problem is the timeshare buyer typically does not buy in their state of residence which is why lawmakers don’t seem to take timeshare seriously. Still, any effort to contact lawmakers is encouraged.

If this sounds like a work, it is, but you can file with some, all, or none of the agencies. We feel “Action and Advocacy” is the way to change questionable timeshare business practices. Change requires volumes of complaints.

What to expect from regulatory agencies

http://insidetimeshare.com/chicken-soup-timeshares-soul/

Life without timeshare through “The 3Rs or F of Timeshare”

http://insidetimeshare.com/3-rs-timeshare-part-1/

If you are granted a positive outcome, you may not say or write anything disparaging about the resort, but there is no harm in staying involved. Reach out to others when you stay at resorts. Create a business card type flyer.

Who We Are and Why We Do This

working others

The timeshare industry is wealthy and powerful, able to influence politicians and Attorneys General. Timeshare owners typically are struggling with maintenance fees, unorganized and alone. Venting on complaint sites has no effect whatsoever.

There are a number of timeshare members and non-timeshare member advocates working behind the scenes to assist in the complaint process. If all else fails, we will refer to an attorney if the member can afford one. If you are forced into foreclosure, but have an otherwise unblemished credit report, you can write to the credit reporting agencies in an effort to explain why you were deceived and why you were not able to resolve your dispute.

After retiring from Edward Jones working as an Investment Representative, I worked three years as a CASA supervisor, writing and editing court reports for Family Court on behalf of foster children. I find two commonalities between children of abuse, neglect or dependency and deceptive timeshare sales.

  • The abnormal becomes the normal. After hearing 136 complaints (as of September 5), I fear deception is endorsed and encouraged by some timeshare companies. I have interviewed nine current and former timeshare sales agents and managers. They call it “pitching heat” or “No Heat, No Eat”. Of course not all sales agents are dishonest. We hear primarily from buyers seeking assistance when victimized by unscrupulous agents.
  • Victims are silenced and isolated via non-disclosure agreements. Non-disclosure is appropriate in the case of a settlement, but when a family receives nothing after an alleged bait and switch, after spending $5,000 to $500,000 or more on a vacation plan, not allowing the victim to say anything disparaging about the company seems harsh. Many of the families we have worked with are financially devastated.

There are many who use and enjoy their timeshare. My husband and I owned three timeshares for 25 years with no problems or complaints. After we attended a pathetically aggressive sales presentation in 2015, I began researching the industry, writing articles and assisting timeshare victims. I am not compensated by anyone. Our Advocacy Group is composed of volunteers. We hope there will come a day our Advocacy Group is not needed.

Self Help Groups

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

https://www.facebook.com/timeshareadvocategroup/

https://www.facebook.com/groups/180578055325962/

September 12, 2017 Irene Parker Timeshare Advocacy Group™  

Although this article is aimed at our American cousins, the principle of how it is written will be the same for Europe. If you believe your complaint is valid, don’t give up, that’s what they want you to do, be persistent, be strong and seek help, it is out there.

In Europe the EU has set up many consumer agencies, most EU countries have consumer rights groups and Consumer Affairs offices. In the UK there are several that you could use, one which has been very good in the past is the Trading Standards Office, these are set up by local councils and have a lot of clout. They have also been instrumental in having some rather shady companies closed down.

Then there is legal action, employing a law firm to take your case to court, in Spain over the past few years this has been very successful. Law 42/98 and the updated version Law 4/12, is based on the EU Timeshare Directives, which were put into place to protect consumers and regulate the industry. Spain now has the strongest timeshare regulations in Europe, these along with other civil consumer laws protect consumers from unfair practices and contracts. These have been strengthened over the past couple of years with around 57 rulings from the Supreme Court, Spain’s highest court, which has removed any doubt about their interpretation.

It now remains for other EU countries to do the same, so no matter where you purchase, the same protection is available. We may even just see a change in the industry for the better.

If you require any further information about this or any other article, contact Inside Timeshare and we will point you in the right direction.

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