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Timeshare Sales: Is This Familiar?

Inside Timeshare has for a long time published articles on the underhand tactics used by sales agents during “Sales Presentations”. For most people it begins on the streets with the “ticket touts” offering “free gifts” and of course the ubiquitous “Star Prize”, the start of many untruths and misinformation has begun. But what happens on these timeshare presentations, and how are you pressurised into the purchase?

It is rather difficult to explain to those who have never had the misfortune of attending a presentation what actually goes on, it is fast-moving with what can only be described as “information overload”. It appears that the “sales agent” is running on “Duracells”, they never stop talking, skipping from one benefit to the other, and as we now know most of it is total BS!

Before you even start, the sales agent is preparing for what is known as “breaking the pact”, which is a very important part of his sales arsenal. You, as a couple will more than likely have agreed that you will not do anything today and most definitely not purchase, a very strong obstacle for the sales agent to penetrate.

Using his experience, he will identify the weakest link, targeting the “great benefits” of purchasing to that person. It is well known that targeting the wife with all the luxury the apartments can offer is one of the main keys to gaining a sale.

For a little fun, there is a wonderful scene in the British Comedy, OH Marbella, released in 2003, in this scene, Rik Mayall, plays a timeshare sales rep, Greg Dubois. Unfortunately, the unsuspecting couple who have been transported from Torremolinos to Marbella by a “ticket tout”, will have the “Dubious” Greg Dubois give them the “grand tour”.

Although the scene is short and rushed, it does give you the sense of “urgency” placed on getting you to purchase, and “today and today” only.

You will also notice how the “wife” is targeted, the use of the words “your dream” being used for the bedroom, television etc. She is “sold” especially when they go into the “dream kitchen”, watch her as she notices the “dishwasher”. Well, she doesn’t have one at home!

Enjoy the scene on this link.

All we can say is thank goodness that Rik Mayall became an actor and not a timeshare sales rep!

All joking aside, this scene does show in a very short time how you are sold, we know of no other industry that has to use these tactics to get a “sale”, in a way, it does show that what you are actually purchasing is worth nothing.

In the US, timeshare sales practices are highlighted on a regular basis on consumer programs and news items, in Europe and especially in the UK, these are largely ignored. Not enough scandal we suppose, not newsworthy or the audience is not large enough to warrant a program.

Below are just two items found on Youtube reporting on timeshare sales and tactics, it really should not come as any surprise that it is newsworthy in the US, after all, from the reports and articles Inside Timeshare has published over the years, it is certainly a very big problem.

https://www.youtube.com/watch?v=tcALXEN3USQ

We are seeing in Europe a real downturn in the sales of timeshare with many of the sales companies going into liquidation, for some, it is down to the legal actions in the courts, for others it is the lack of sales. This has been greatly exasperated during the travel restrictions of the pandemic, but in the end, the writing was already on the wall.

The question is now, will timeshare ever recover?

The answer to that is in the future, but unless they completely revamp their product and sales techniques to be consumer-orientated, then the answer my friends, is a resounding no.

Did you purchase a timeshare in Spain after January 1999, if so and you would like to know if your contract is illegal and what your legal rights and options are, please use our contact page and Inside Timeshare will get back to you?

Past articles on timeshare sales

https://insidetimeshare.com/whistleblowers-expose-timeshare-sales-tactics/

https://insidetimeshare.com/secret-world-timeshare-sales/

https://insidetimeshare.com/timeshare-the-road-to-being-scammed/

https://insidetimeshare.com/page/1/?s=timeshare+sales

Timeshare Sales and Finance Agreements

Timeshare is not a cheap product, not just the ongoing costs of the annual maintenance fees, the costs of flights and not to forget the money required to feed and water your family during your stay, but the initial cost is high, to say the least. The average cost of a week’s worth of basic timeshare begins around the £10,000 mark, from many of the legal cases we have highlighted that cost has been two to four times that amount.

For those who became involved with Resort Properties which then became Silverpoint, we have seen figures going as high as £100,000, in some cases more. The reason for these high figures, as we now know, was the “investment” pitch, the purchase of multiple weeks and apartments with the promise of a rental income and then a sale of the weeks for a sizable profit.

These never materialised, a fact we can see in the court cases in Tenerife and the subsequent liquidation of Silverpoint. We also know that it did not end with the first purchase, after the two to three year period when the weeks were eventually to be sold, the unsuspecting “investors” were then told the weeks and apartments they purchased were not popular so were not selling.

Never mind, Silverpoint would take them off your hands and sell you better weeks and apartments, and so it went on.

But how were these huge purchases financed, from many of the statements from these victims, they told the sales staff it was not affordable, but that was not a problem according to the salesman. He and his manager can arrange finance, in this case through Barclays Partner Finance.

It was a simple process and the loan application would be granted without any problems, and so it was. By the end of the presentation, the “victim” had purchased the timeshares and signed the loan application. By the time they returned home, BPF had already sent the letter congratulating them on their purchase and for using BPF!

So what is the problem I hear some of you ask?

The problem is very simple, the loans were granted without all the usual checks that one would expect for a loan ranging from £30k upwards.

This is not unique to Silverpoint, other timeshare sales companies used the same technique to “broker” loans for the purchase, the “guaranteed” acceptance for the loan. All were accepted by the various finance companies they used, without question.

The three main finance institutions involved with timeshare finance are Barclays Partner Finance, Hitachi and Shawbrook Bank. Only Shawbrook Bank has acknowledged they did not do their “due diligence” when authorising these loans. They set aside around £9 million to cover any defaults in repayments for these loans and the then CEO was forced to resign. See the link below on their admission.

https://insidetimeshare.com/shawbrook-bank-announce-irregularities-timeshare-loans-similar-activities-usa/

So what do we mean by “Due Diligence”?

Very simply put, it is the lender making sure that their money is secure and will be repaid.

How many of you have gone to your bank or a finance company to ask for a loan for a sizable purchase, it may be a new car, an extension to your home, anything where a large loan is required. From personal experience, the loan was never as straightforward as it has been with purchasing a timeshare.

Apart from the simple credit checks, i.e. any CCJs or defaults, proof of income is required, usually, at least the last 3 months pay statements, for yourself and the wife if you are married. Then there is the all-important Income v Expenditure statement, in this, you will show your monthly outgoings, this is everything, from household bills, right down to what you may spend at work for lunches and coffee per month.

From this and the proof of income they can see if the loan repayments are actually affordable, that you have the “spare” income to cover the repayments without leaving you “short”. In other words “responsible lending”.

Shawbrook admitted they had not done this vital part of the application, they and the other finance companies relied on the information provided by the “timeshare sales staff”, who had a vested interest in making sure the loan was approved.

This is now where we have a problem.

It has always been the way in most sales and especially timeshare, that they are commission-based, in other words, no sale no pay. Some timeshare sales did pay a very meagre “basic” but in many instances, these were based using the old “On Target Earnings”, you don’t make your target you don’t get paid.

This means that the pressure to get you to purchase is going to be even stronger, no matter how you may try to explain you cannot afford the price, the loan option is always going to put more pressure on you to sign.

We must also not forget that the salesman also receives a commission from the finance company, so it is a double-dipper for them. Somehow I see a very “unfair relationship” here, the salesman wants the sale and the lender wants the business. After all, the total repayment is around double the original purchase price, these loans are not cheap.

A Typical BPF Loan Agreement showing the total cost of the timeshare with interest.

For the finance companies to rely purely on the information supplied by people with a vested interest in making the sale with a loan, is in our book totally irresponsible. At least Shawbrook admitted as such.

So far in all the cases that Inside Timeshare has seen on this subject, not one client has ever had to show any written proof of income or have had to provide an “income v expenditure” report. At no point has any of this information been provided by the lenders, even though upon request they must produce it, they have not even been able to produce any of this information on the loan application provided by the timeshare sales.

This would suggest that there is a very serious problem here, it also becomes more serious when we look at the loans and the timeshares they were used to purchase. The vast majority were made in Spain, which with their very strict and consumer-friendly timeshare laws, these loans were used to purchase a product that has been deemed illegal according to the law.

For these institutions to be a party to the underhand sales techniques used in timeshare makes them in our opinion worse than the timeshare companies. We have to ask the question, were the finance institutions duped into these loan agreements by timeshare or was it just greed on their part?

Somehow I think your answers will be the same as mine, GREED!

If you purchased a timeshare in Spain after January 1999, then your contract may just be illegal, if you would like to know for certain and the purchase was also made using a finance agreement, then please use our contact page and Inside Timeshare will get back to you.

Timeshare Sales, Barclay Partner Finance & The FCA

For the past couple of years, Inside Timeshare has been following the case of the Financial Conduct Authority granting a validation order for loans provided by Barclays Partner Finance, brokered by timeshare sales agents of Azure Services Ltd. This validation order was granted to BPF after the finance company found out that over 1,400 loan agreements were brokered by Azure Services who were not authorised, competent or diligent enough to broker them.

Many of the clients who signed these agreements for the purchase of timeshares, tended to be either retired or just coming up to retirement. They were lured with the wonderful patter of you are “investing in property”, “it’s not timeshare”.

There was the promise of renting out the purchased weeks, which would give an income, supposedly to cover the maintenance fees and a bit more. Then after 2 years the “investment weeks” would be sold and they would make a profit. This would cover the cost of the loan provided by Barclays Partner Finance.

Well, we all know how that story ends, remember that Azure is part of the Limora Group of companies owned by the late Robert “Bob” Trotta and was also the sister company to Silverpoint in Tenerife.

Company Participations have been likened to this!

Silverpoint, formally Resort Properties, sold the same product, in fact, it was they who originated it. They further developed the product into the Company Participation Scheme, which changed by registering the apartments for sale as “companies”. But the same idea was applied in the sales presentation, it was an investment with rental income and profit after sales when the “company” was transferred to the purchaser. (Sorry but that is the very simple version).

The vast majority of these purchases were made by loan agreements brokered by the sales staff selling the products and provided by Barclays Partner Finance.

When you consider that in the two years which the FCA is looking at for Azure clients this has affected over 1,400, the number of loan agreements financed by BPF must number in the thousands and as far as money is concerned worth hundreds of millions of pounds. Although this is just a guess it is on the figures received by Inside Timeshare on the Azure loans worth around £40 million.

We now move to the latest phase of the case, back in August 2018, Judge Timothy Herrington, ordered the FCA to re-evaluate its decision to validate the order, citing that “consumer detriment” must be taken into consideration.

Judge Timothy Herrington

Over a year later, the FCA confirmed the validation order with a provision that BPF appoints a “competent person” to investigate client detriment.

Now the appeal has been launched to overturn this decision, there is a group that has been formed to coordinate clients who are affected by this decision called Azure Malta Action And Support Group. They are a closed group on Facebook and are gaining in membership, not just with Azure owners, many others affected by the sales practices of the timeshare sales reps and their brokering of these loans.

The group has now published a letter to BPF which Inside Timeshare has placed as a downloadable link below, which demands the right to know what information was given to BPF by the broker regarding the loan application. It also calls for BPF to provide all details of any correspondence between the client and BPF.

It is a legal right under data protection and known as Data Subject Request.

This template letter is not just for Azure clients, any timeshare purchaser who was brokered a finance agreement by the sales reps with BPF or any other finance company can use it. Inside Timeshare urges you to do so, as from all the people that Inside Timeshare has spoken with none have ever provided any full financial details such as “income v expenditure” which are normal procedures especially when considering the sums involved. These reports show if the repayments are affordable and in fact, Shawbrook Bank admitted it had not carried this out several years ago.

The Azure Malta Action And Support Group along with Inside Timeshare are urging all those affected by BPF loan agreements to begin submitting these requests and then filing complaints with the FCA. Hopefully, this may force the FCA to investigate.

Unfortunately, in an article in the Mail on Sunday by Jeff Prestridge, it appears that there are some very serious concerns about the FCA.

According to the start of the article, which we must point out is also our opinion, the Financial Conduct Authority is there to protect consumers, but “is more interested in protecting its own”.

It also goes on to highlight the inherent problems of staff untrained and lacking the knowledge to actually carry out their work. They are not being trained to spot “anything suspicious” in the companies they are supposed to be monitoring.

They lack any training, knowledge or experience in dealing with consumer complaints, and as Inside Timeshare has found in the past, every complaint seems to be dismissed in favour of the industry. Sounds a bit like the Resorts Development Organisation don’t you think!

Although the article is not about timeshare it is a very damning report of the FCA and their apparent inability to actually perform the job they are entrusted with. It certainly highlights the problems being faced by consumers who have had to endure lengthy high-pressure sales presentations, ending up signing agreements for finance on the false promises of sales staff, reliant on the loans to close the sale.

The link to the full article is below along with previous articles on this subject along with the link to Azure Malta Action And Support Group.

If you have purchased a timeshare with a loan arranged by the sales staff and would like more information on what your rights are, then please use our contact page and Inside Timeshare will get back to you. If we are unable to answer your question we will find out for you.

Link to the Azure Action Group

https://www.facebook.com/groups/1152657598482168

PDF & Word versions of the template letter

Jeff Prestridge Article

https://www.thisismoney.co.uk/money/comment/article-9070435/JEFF-PRESTRIDGE-FCA-let-investors.html?fbclid=IwAR3M0bPZrnghdan3Ae5zxaGP17CHfiwYQ5llR0V0ELMTzic-j9XZD_3-72E

Articles on the FCA validation

https://insidetimeshare.com/fca-validate-azure-bpf-loan-agreements/

https://insidetimeshare.com/fca-validate-bpf-azure-loans-update/

https://insidetimeshare.com/barclays-the-fca-and-azure-the-story-continues/

Shawbrook Bank

https://insidetimeshare.com/shawbrook-bank-announce-irregularities-timeshare-loans-similar-activities-usa/