Welcome to our first article for July, we start this week with some news from the Courts in the UK.
On Tuesday 19 June at the Royal Courts of Justice, The Upper Tribunal, Tax and Chancery Division, sat on hearing brought by the Financial Conduct Authority and Barclays Partner Finance. Presiding over the case was Judge Timothy Herrington.
The case centers around a petition to the FCA by Barclays Partner Finance to issue a validation order for finance agreements made between April 2012 and April 2014 for loan agreements involving timeshare sales in Malta.
It transpired that the company which brokered the finance agreements, Azure Resort Services Limited, were not authorised or licenced by Barclay Partner Finance. They approached the FCA to have these validated and claimed that no consumer detriment had been caused by this.
The FCA did issue a validation order on the evidence it had from Barclay Partner Finance, they then received many complaints from many of those affected, this numbered around 1,444 clients.
On investigation it was found that consumer detriment may well have been caused with the new evidence coming to light. But the FCA felt it did not have the authority to reverse the validation orders and the case went before the Tribunal to have the validation orders reversed.
Canarian Legal Alliance along with other law firms representing clients had representatives in court. In the case of the CLA client, the loan agreements was for the purchase of multiple timeshare weeks. These were upgrades to original purchases in the “investment” packs being sold by Azure Resorts, which is the Malta arm of Silverpoint in Tenerife.
These multiple weeks were sold with a promise that a resale program would be put into place, then after two years they would be sold and the “investors” would be able pay off the loans with the money they would make on the sales.
As we know this ploy has been going on for years in Tenerife by Resort Properties / Silverpoint, which are subject to many cases going before the Tenerife Courts and the Supreme Court in Madrid. These sales have never taken place.
The CLA client was given a loan of over £20,000 to finance the purchase, they were misled into believing that the weeks would be sold and the loan agreement would be only for a two year duration. In fact the agreement was for a 15 year repayment term.
It is also known that the clients who were 75 at the time of signing had the loan approved within days of signing. At no time were they asked for any proof of income versus outgoings reports. These clients also signed the purchase agreements and the loan application forms after more than 5 hours of intense high pressure sales. They also felt they had no choice but to make these purchases so as not to lose out on money previously “invested” for weeks which had not been sold. The excuse they were given was what they had previously purchased were not selling as they were not the type of weeks and apartments which people wanted to buy.
The Judge presiding over the case then adjourned the hearing for deliberation, a verdict is yet to be announced.
If the validation order is reversed by the court, then this leave Barclays Partner Finance in a very difficult position, the upshot is if these agreements are not validated then Barclays Partner Finance cannot pursue the borrowers if they decide not to continue the payments. The lawyer for BPF assured the Court that until the judgement, BPF would not enforce the agreements for those who have defaulted.
This also leaves many other questions regarding finance agreements for timeshares, how many more have been made by unauthorised licenced brokers?
It also poses the question of ability to afford the repayments, especially when these agreements have been approved within days of signing, how many have been granted the loans without showing any proof of income versus outgoings reports?
Shawbrook Bank acknowledged this back in 2016, which we reported in an article in July that year, the CEO also resigned over this matter. (see links below)
Now for some news from the Spanish Courts last week.
The Supreme Court in Madrid issued two more rulings against the timeshare industry, number 123 and 124. These once again involved Silverpoint SL in Tenerife, they also lost in two cases in the Courts of First Instance held in Tenerife.
In cases held at the Courts of First Instance in Maspalomas, Anfi were on the receiving end, with contracts being declared null and void and being ordered to repay the clients their purchase price back.
Diamond were also on the receiving end of a Court of First Instance ruling, again the contract was declared illegal and therefore null and void.
With these 7 cases the timeshare industry has been ordered to repay over 160,000€ and in most case legal fees and legal interest.
The lawyers involved in all these cases are the lawyers from Canarian Legal Alliance.
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Been contacted by a company or found one on the internet and you are not sure about them, then contact Inside Timeshare and we will point you in the right direction.