Timeshare Loan Agreements

One of the main enquiries from many readers regarding their purchase of timeshare has been the loan agreements to conclude the purchase. These are invariably brokered by the sales staff themselves and are a very important tool in their arsenal to ensure a timeshare sale. After all, most timeshare sales reps only get paid commission on successful sales, so the loan agreements will boost sales from those who could not actually afford the purchase price. Plus they will also receive a commission for brokering the agreement, so for the timeshare sales reps, this is a very lucrative tool.

You have all been there, attended a sales presentation either for the first time or for an “upgrade” meeting with the in-house reps. The product is laid out before you, the sales patter begins and you are now in the grip of a rep who has only one goal, to sell you a timeshare or an upgrade.

You can claim until you are blue in the face that you cannot afford the timeshare or upgrade, but that will not cut any ice with your rep.

The product will be shown in its best light, they will pressure you into wanting the timeshare or the upgrade, that it is something that will only give you great holidays and enormous amounts of pleasure. You really can’t do without it.

Enter the final part of the sales pitch, “what if I can make this affordable”?

I am sure you have all heard that one.

Enter the loan agreement, this will be with either the sales companies own in-house finance or more than likely with one of the major lenders such as Barclay Partner Finance or Hitachi.

The sales rep or his manager will explain very briefly the loan agreement, that it is “guaranteed” to be accepted, once you sign the agreement, by the time you arrive back home from your holiday you will receive a letter welcoming you to whichever company and for taking out a loan with them.

Not bad, a quick loan and you now own the timeshare or have upgraded. There is only really one big problem, can you actually afford the repayments, did you complete an “expenditure v’s income” report to show that the prepayments are affordable and do not leave you short?

In all the loan agreements which Inside Timeshare has come across, these reports which are a basic part of taking out any loan have never been done. The question we have to ask is what sort of credit checks have been made after all these loans are very substantial, the average is around the £20,000 mark?

It should also be noted that it is not just the cost of the timeshare that needs to be taken into consideration, but it is also the very high-interest payments. In most cases that we have seen the amount to repay back is almost or more than double the original purchase price, so why have there not been stringent credit checks and affordability checks?

The answer is pure and simple, greed.

One question that Inside Timeshare has asked on many occasions, especially the older purchasers, had you gone to your bank for a loan of this size to purchase timeshare, do you think your bank would have given it to you without all the stringent affordability checks, or even due to their age. Every answer was the same, no they would not have approved the loan.

It is also a fact that Shawbrook Bank back in July 2016 announced they had found “irregularities” in their “due diligence” on approving loans for timeshare. They had not done the usually required credit checks or affordability of repayments. They set aside £9 million to offset any defaults on these loan agreements. The CEO of Shawbrook at the time had to also resign.

This is not a subject that is new to Inside Timeshare, below are links to other articles on this subject, one of the biggest finance companies which have found themselves the subject of many court cases is Barclay Partner Finance. They infamously provided all the finance agreements for one of the biggest frauds in timeshare history, the loan agreements for the Silverpoint “investment packs”. On average the purchase of these packs have reached over £60,000 and that is without the interest!

There are ways that these loan agreements can be challenged, but that does need the case to be taken to a UK court by a competent and experienced lawyer in this field. The one-piece of legislation which is being used is Sections 140a & 140b of the Credit Consumer Act 1974.

Basically, this covers the “unfair relationship” between the broker (sales staff) and the loan provider. The fact the sales staff require the loan agreement to make the sale creates a very unfair relationship against the consumer. After all, he needs to earn his commission.

Inside Timeshare has also come across readers who have made an arrangement with BPF to reduce the amount being repaid, this does sound like a good idea if you are struggling, the unfortunate thing is that BPF will place you on a defaulters register and that will affect your credit rating. One reader is going through this at the moment, it is stopping them from getting a mortgage, so the wonderful image of a timeshare purchase for this reader has turned into an even bigger nightmare.

Inside Timeshare just wonders how many thousands of people have been caught up with purchases made by loans brokered by the sales staff, we also wonder how many of these have now lost all credit ratings due to being unable to afford the loans. This is a problem which has been going on for years and yet we see nothing from any of the regulatory authorities such as the Financial Conduct Authority siding with the consumer, they just seem to be siding with the finance industry. (See yesterday’s article)

The sooner the finance companies do what Shawbrook Bank has done and admit they have made very serious errors in their “due diligence”, the better it will be for all those caught up in these high-interest loan agreements.

Past articles on the subject of loan agreements 




FCA Validate Azure BPF Loan Agreements

Back in June 2018, at the Royal Courts Of Justice in London, a case was brought against the Financial Conduct Authority (FCA), regarding a validation order they issued to Barclays Partner Finance to legalise loan agreements made by Azure Services Ltd. These loans were brokered between 1 April 2014 and 24 April 2016 and involve around 1,444 clients, introduced by Azure sales staff for loan agreements to pay for the sale of Azure timeshare in Malta. At the time Azure Services were not authorised to broker the loans. The case was brought against the FCA as they validated these agreements which are detrimental to the clients.

An appeal was made by the clients and their representatives 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.

The case was heard by Judge Timothy Herrington, he eventually made his ruling in August 2018.

Judge Timothy Herrington

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:

  1. Clients were not given sufficient information as to the terms and conditions of the loan agreement required by law;
  2. There were no major credit checks made as to the affordability of the repayments such as income versus outgoings reports;
  3. The length of the loan agreements were not explained, with the client under the impression that they were for two years;
  4. Clients were pressured into signing these agreements;
  5. False representations were made to clients relating to the financial impact of regulated agreements;
  6. Clients were subject to long high-pressure sales tactics to purchase the timeshares;
  7. Clients were sold timeshares which were not appropriate for them;
  8. Vulnerable consumers were treated inappropriately;
  9. Concerns about commission arrangements and disclosure thereof.

The FCA had then to re-examine the original validation order and take into account the client detriment statements of the borrowers.

Inside Timeshare has now learned that the FCA has finally made their decision and it is not what we were expecting, going by Judge Timothy Herrington’s ruling, it was expected that the FCA would overturn their validation order which would have made these loans unenforceable in the event of any default in payments.

The FCA it appears have sided with Barclay Partner Finance and validated these loan agreements which means they are now enforceable in law for any default. This is a decision which will surely have all 1,444 clients involved feeling very annoyed and totally let down by the FCA.

Inside Timeshare is at a complete loss as to why these loan agreements have been validated, it does make us wonder if these authorities such as the FCA are actually there to protect consumers or just playing lip services to them while actually being on the side of the financial institutions!

As more information becomes available Inside Timeshare will keep you informed. Please see the links below for the original stories.




End the Week Roundup

It is the end of another week with Inside Timeshare, we began this week with an old story, that of Mrs B and her long-running battle with MacDonald Resorts over maintenance arrears for a timeshare she no longer legally owns. We also highlighted two new companies who have begun a cold calling campaign, Timeshare Refund Calculator and World and European Marketing Ltd. Once again these have been supplied by our regular readers who have been contacted by them. Another major article this week was the article Lopesan Sue Apollo Capital Management in UK Courts, a story that has aroused the interest of some of our US readers.

There was also some very good news from the courts, these were mainly sentences against Anfi. Many of these were judgements from the High Court of Las Palmas, GC, these were appeals by Anfi against the rulings from the Court of First Instance, in every case, the appeal was dismissed with the original sentence endorsed and returned to the original court for execution of sentence.

Considering the number of appeals that Anfi is making to the High Court, with all of them being rejected and sentences endorsed, it makes Inside Timeshare wonder why Anfi continues to appeal?

We suspect they are playing for time and just delaying the inevitable, possibly to deter any new claims being filed using time as a tool. After all, we know how devious Anfi can be!

We finish this week with news of another court case, this time it is not Anfi, but Holiday Club based in Gran Canaria.

The Court of First Instance Number 4 of SBT, has declared the clients contract null and void, they have also awarded over 20,000€ plus legal interest and legal costs.

This amount also includes the payment of double the amount of the deposit taken within the statutory cooling-off period.

Apparently, this is another case where the judge decided that a full trial would not be necessary and issued his sentence at the pre-trial stage. This means the case has been dealt with within a very short period of time, from filing with the court to the sentence has only been 6 months. It certainly is speeding things up now judges are dispensing with full trials.

This case was brought on behalf of the Norwegian client by Canarian Legal Alliance, with the Lawyer Eva Gutierrez preparing the case and representing the client in court, with Claims Consultant Michael Gadman assisting the client during the process.

That is all for this week, join us again next week for more news and information on the murky world of timeshare.

Remember, do your homework before engaging with any company, have a great weekend.