Welcome to the start of another week with Inside Timeshare, today we publish the following press release from the Azure Malta Action and Support Group and their ongoing battle with Barclays Partner Finance. This is a story that Inside Timeshare has been following for quite some time and it is one that shows how financial institutions are actively involved in the selling of timeshare to the detriment of consumers. Although this story involves Azure Resorts in Malta, it will be familiar to any consumer who has purchased a timeshare with a loan agreement brokered by the sales agents on the day not just with BPF but also other lenders.
Dear Sir / Madam,
I am writing to ask if you would consider covering our story of what we believe to be a grave injustice. This involves mis-selling of Time-share property at the Golden Sands Resort in Malta, involving deception and fraud, affecting many thousands of British consumers, of whom the vast majority are elderly, some are very vulnerable, and several have died.
Azure Services Limited were identified as not legally permitted to broker loans during the period between 1st April 2014 and 24th April 2016, and therefore the 1448 loans worth around £48 Million, brokered by Azure and issued by Barclays Partner Finance during this time were identified as unenforceable.
On 5th February 2018, the Regulator, the Financial Conduct Authority (FCA) made a Validation Order to legalise these loans retrospectively. It appears that Barclays failed to contact all the consumers affected, and therefore most were unaware of their rights to object to this decision. However, 41 affected consumers appealed to the Upper Tribunal (Tax and Chancery Chamber) challenging the appropriateness of the Validation Order on the grounds that they had been deliberately mis-sold the loans by Azure and had suffered very significant harm as a consequence.
This appeal was heard at the Upper Tribunal in 2018 with Judge Herrington sitting.
The Upper Tribunal directed the FCA to reconsider their decision because they had not considered consumer detriment when making the Validation Order. On 3rd August 2020, after two years of apparent investigation, the FCA re-issued the Validation Order to Barclays, with a few minor conditions attached. The FCA and Barclays then, once again, failed to contact all affected. A Self-Help and Support Group was established in December 2020 and has launched a further appeal to the Upper Tribunal which is ongoing.
Since the formation of the support group, it has now become possible to piece together the scale and nature of the highly organised, deliberate mis-selling at this Resort, which took place between 2005 and 2019.
Typically, Barclays’ partner, Azure Services Ltd, used incentives to lure people to the Golden Sands Resort and then applied very high-pressure selling techniques for up to nine hours at a time. The nature of the product was misrepresented in various ways, but in all instances on the basis that it could be re-sold at a substantial profit within a year or two. Inducements (such as cash-back payments, free holidays, meals, Spa vouchers and “special – for-one -day-only” prices) were frequently offered. In this way, many people were ground down and deceived into signing contracts that were unsuitable, unwanted and unaffordable. The sales were implemented through loans from Barclays Partner Finance. The loan agreements were already printed in advance and ready for signing even before consumers had agreed to the sale. No employment, bank, ID or affordability checks were carried out. Loans were issued to pensioners, people on Government Benefits, as well as to some with life-threatening illnesses.
Many people were persuaded to buy multiple loans, with repayments to run concurrently. Typically this seems to have been achieved as follows: a consumer who is on holiday at the resort is approached by the Azure salesperson to be given “updates” about the resort. The consumer says that they are worried that they can’t afford the loan repayments on their existing loan & would like to sell. The salesperson says that their particular unit is not selling very well, but more expensive ones are in high demand. Therefore, if they take out a further loan and “upgrade”, then the next year they will be able to re-sell easily and at a profit. Some people became so desperate that they yielded to this approach on multiple occasions.
Amongst the members of the Support Group, the average size of the loan is £33,100, but some individuals have ended up with loans in excess of £100,000 to service. You may infer from this that the affected people were gullible, but in truth, they are a broad cross-section of decent ordinary people including police officers, nurses, other NHS workers, civil servants, construction workers and others. They suffered due to the ruthless effectiveness of Azure’s sales techniques and the instant availability of Barclays loans. As a result, some have had to delay their retirements, and re-mortgage or “down-size” their homes in order to stay solvent.
The resort itself is lovely, and many of us enjoyed holidays there for several years. The real consumer detriment is that the “Timeshare” purchases were not for any tangible asset, as we were led to believe. When we came to try and sell our asset, we found that the contracts have turned out to be merely expensive “Club Memberships” with no resale value. The funds that we used to buy our “investment” appear to have vanished. Meanwhile we are all locked-into contracts requiring annual Maintenance payments until 2045 when most consumers will be very elderly indeed. In 2015, Azure launched a “re-sales programme” requiring payment of an annual fee, but as far as we know, no apartments were re-sold through this scheme, which appears to have been simply another money-making initiative for Azure. Azure went into liquidation in 2020.
- Why don’t consumers who were mis-sold loans before and after the “Validation Order period” have a right to appeal to the Upper Tribunal, when they suffered the same detriment from the fraudulent selling techniques of Azure and Barclays? Why isn’t our Government protecting ordinary citizens?
We have written to our MPs, many of whom have been supportive and 41 of them wrote to the Lord Chancellor asking him to change the scope of the Upper Tribunal’s powers so that these earlier cases can be considered. However the Lord Chancellor and Parliamentary under Secretary of State at the Ministry of Justice say that they cannot alter legislation on a “case by case” basis. Some MPs have also written to The Treasury (which oversees the FCA) but the Economic Secretary to the Treasury says he cannot intervene. Others have written to the FCA Chief Executive, with similar evasive replies.
- Is the Regulator Protecting Barclays?
Many members of the support group have written to the Regulator the Financial Conduct Authority (FCA) and received written replies confirming that Azure Services Limited (ASL) was not authorised or licenced to broker loans for Barclays Partner Finance (BPF) prior to 1 April 2014 and that these loans were illegal and unenforceable. As a result, thousands of consumers have been affected over more than 11 years. The FCA has taken no enforcement action against BPF or ASL, and no attempt to inform or compensate affected consumers has been made. Why is the FCA not responding to our complaints about this?
- We believe that this was large-scale, repeated fraudulent misrepresentation which is a criminal offence …… but Barclays has repeatedly rejected such claims. We have written seeking evidence of personal data held by Barclays which might indicate that affordability checks were carried out prior to the issue of loans…. but Barclays has failed to provide any. Why?
The product that was sold, was repeatedly and emphatically said to be an investment that could be re-sold at a profit within a couple of years. A very “hard sell” and many deliberate lies were told in order to convince us of this. In reality, the product is worthless and cannot be re-sold, and the money “invested” has disappeared. A critical part of the sales pitch was that the deal had to be done straight away & Barclays loans were offered there and then. The Barclays name added authenticity – we didn’t think they would be involved in anything dishonest and were sure they would have checked the deal was OK. No affordability checks were done. Many consumers were over 60 years old at point of sale. As a consequence of the loans, many have had to re-mortgage their homes, and /or have lost their life savings and pension funds. We, therefore, believe that this was large-scale, repeated fraudulent representation which is an offence under The Fraud Act (2006)…… but Barclays has so far rejected such claims. Why?
- We would like to raise awareness of the support group amongst affected consumers
We are certain that there are thousands of affected consumers. Many of them are hard to reach because they are elderly and unfamiliar with email and social media. As individuals, none of us can afford to take Barclays to court, however, we feel stronger as members of a Support Group. The membership of the Support Group now stands at 302 people and is growing daily. We are determined to ensure that our case is properly considered and that the law is applied fairly. We would like to encourage anyone who has been mis-sold a Barclays loan through Azure Services Ltd to apply to join our group.
Thank you for reading about our story. If you feel this is a topic that could be covered by your newspaper or aired on MoneyBox Live, we would be very keen to talk with you further and discuss how this would work. All of our members have sad individual stories to tell. They are all slightly different, but with strong common themes. Some group members could give their own stories, but for others – who are particularly frail and elderly- it would be best if these could be voiced by actors.
I look forward to hearing from you.
Azure Malta Action and Support Group
If you would like to join this group or would like further information on this subject please contact the group on Facebook or use our contact page and Inside Timeshare will forward your details to the Group Administrators.