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Barclays Partner Finance

Friday’s Letter from America: Timeshare Foreclosure

Welcome to this week’s edition of Letter from America, this week Irene Parker answers a question asked by many consumers when it comes down to loans/mortgages for the purchase of timeshare. This is very much a problem for our US readers as in Europe and especially in the UK all loan agreements are considered personal loans to purchase a product, any default on the loan agreement is a civil matter and is dealt with by the County Courts. The courts can order the repayment or send in the bailiffs to seize personal property to the value of the loan. The timeshare will not be seized as the loan is not collateralised by the timeshare, after all, it is worthless.

There are not many figures available on County Court Judgements made for defaults on these loans, mainly because they are listed as personal debts not attached to anything but a debt to the lender. For instance, you may have taken out a loan for home improvements, this is treated exactly the same as a loan for timeshare. It should also be pointed out that a County Court Judgement commonly known as a CCJ destroys any credit rating and will prevent you from getting any further finance. Now, considering the average age of timeshare purchasers, they are of a generation that will pay off these defaults as a debt is a debt and to receive a CCJ is out of the question. It should also be pointed out that even if consumers receive a CCJ, they are unlikely to advertise the fact on these timeshare forums, after all, it could be very embarrassing.

Is a Timeshare Foreclosure an Installment Loan Foreclosure or a Mortgage Foreclosure? 

See the source image

Is a Timeshare Foreclosure Considered Mortgage Foreclosure? 

https://gustancho.com/timeshare-foreclosure-considered-mortgage-foreclosure

On the credit report yes, but not with mortgage lenders:  Per HUD mortgage lending guidelines, a timeshare is not treated as a regular foreclosure and is treated as consumer debt. 

The U.S. Department of Housing and Urban Development (HUD), the parent of FHA) classifies timeshare mortgages as installment loans and not real estate loans.

By Irene Parker

July 23, 2021

Over the past year, there have been six disturbing reports that indicate timeshare developers are becoming more aggressive in pursuing members who default on loans. If the reports listed below obtained from credible sources are accurate, timeshare buyers should NEVER finance a timeshare, and timeshare attorneys will be provided substantial job security. If you get sued, you need an attorney. There is nothing to prevent a timeshare company from suing a member, but it is more difficult to collect on a timeshare judgment as the loan is not collateralized with anything but the timeshare.

Last week on TIMESHARE TALKS Jessica Burke of Virginia Beach Timeshare Rentals discussed the benefits of renting timeshares. Renting avoids the initial outlay, and more importantly, gives the consumer time to evaluate different timeshares so as to make an informed decision as to which timeshare might be right for their family. Host John Raymond is a licensed timeshare broker and founder of Resort Reseller. Timeshares can be purchased on the secondary market for a fraction of the cost.  

https://tarda.org/f/should-i-buy-a-timeshare-or-rent-one

The lead spokesperson for ARDA-ROC, the timeshare industry lobby’s consumer advocacy arm, encouraged judicial foreclosure in about-face quotes:

“The best thing we can do with exit (is) judicial foreclosure, ruin the credit and enforce the contract,” said Ken McKelvey, chair of the American Resort Development Association-Resort Owners Coalition, according to letterhead minutes of the April 10, 2019 ARDA-ROC meeting.  (Contacted about the meeting notes, ARDA did not dispute their authenticity but said that in the minutes, McKelvey’s quotes were taken out of context.)

At a 2019 Florida legislative workshop I attended, Mr. McKelvey testified:  

“Most of the developers I know and certainly most of the timeshare managers I know, and I managed timeshare properties for thirty years… every single resort had a dissolution policy, every single one (one). There was a way to get out. You had to come to your management company, and based on what the board of directors instructed us to do in the terms if they had to pay a fee or if they had to be current, whatever those situations were, we did not have a one that did not have a dissolution policy and a hardship policy….” 

Timeshare members donate $5 to $10 per contract to ARDA-ROC in mostly “opt-out” donations. These donations are not as voluntary as they sound. When I asked that the $7 not be charged to my credit card along with my maintenance fees, it was charged anyway. When I called to ask that the $7 be removed, I was told they had to fill out an internal form to do so. That was back in January. Another member recently reported they had to call three times to have the $7 removed. Collectively, ARDA-ROC raises approximately $5 million a year from members.  

Following are five additional disturbing reports:

  1. One developer’s contract used to specifically state that they do not pursue summary judgments. That language has been removed.
  2. Eric Olsen, an attorney of 42 years, was quoted in Kiplinger, to the ire of timeshare developers, when asked what happens when someone stops paying: “I ran this often-asked question by Salem, Ore.-based attorney Eric Olsen, founder of HELPS, a national nonprofit law firm that helps lower-income seniors with debt they can’t afford to pay. Olsen concluded our interview by urging readers to, “Consider walking away from the timeshare, as they generally have no value. Stop paying and ignore their communications.   It will eventually get foreclosed and owing any deficiency is highly unlikely.” Kiplinger, April 26, 2021  
  3. Westgate’s VP of Mortgage Services stated in recent court documents that Westgate “probably” has a 30% default rate. Westgate’s lenders can’t be happy with that high default rate. Other developers have default rates that exceed 20%.
  4. Hilton Grand Vacations and Orange Lake/Holiday Inn have sued members defaulting on loans, according to one exit provider.
  5. Another source reported an upsurge in attorney hiring.    

What does this mean to timeshare members and owners?

According to HomeGuidesSF:

The company may sue you in civil court to obtain a judgment. If the judge issues a judgment against you, the management company may garnish your wages or levy your bank account to get the money you owe.

Deeded timeshare owners face a different dilemma. If you stop paying on your timeshare loan, you face foreclosure. Foreclosure is the process whereby the lender files to take possession of the property and sell it at auction to recover the money you owe. There are two main types of foreclosure: judicial and non-judicial foreclosure. In a judicial foreclosure, the lender files a foreclosure lawsuit and takes you to court. The judge may issue a deficiency judgment for the remaining balance due after the auction. A non-judicial foreclosure is basically a paperwork shuffle. Your contract authorizes the trustee to sell the timeshare in the event you stop paying on it. You receive the official Notice of Default and the Notice of Sale. In California, the majority of foreclosures are non-judicial foreclosures where the lender cannot receive a deficiency judgment after the sale of the property.

https://homeguides.sfgate.com/can-sued-not-paying-timeshare-51679.html

Yahoo Finance reporter Abigail Fisher recommends timeshare stocks because consumers are tricked into signing contracts they can’t get out of: 

Best Stocks to Buy According to Hedge Funds

We find evil companies to be a very rewarding hunting ground to uncover long-term stock winners. In our opinion companies like Philip Morris (PM), Facebook (FB), Apple Inc. (AAPL), Alphabet (GOOGLE) are evil companies that delivered 1000% or more gains to their investors.

In this article we are going to look at another set of evil companies that use high pressure sales tactics to trick consumers into signing complex long-term contracts that they don’t understand: timeshare marketing companies. Check out this Reddit post where the user is asking several questions about Wyndham timeshare cancellation. This person was able to cancel and receive a full refund, but many consumers don’t cancel within the 7-day or 10-day window specified in their contracts.

https://finance.yahoo.com/news/best-timeshare-stock-buy-according-135051667.html

How would this reporter feel if the buyer tricked, was her grandmother? Tiffany’s parents were kept for 11 hours, their IDs withheld. They lost their two deeds they had since 1998, and $34,000. They were told that if they didn’t convert their deed to points, maintenance fees would increase from their current fees of $2,000 to $6,000. The transaction resulted in maintenance fees of $6,000 which they could not afford. Tiffany’s interview: 

https://tarda.org/f/how-giving-up-deeded-timeshares-turned-into-tragedy

Many timeshare members and owners, who report unfair or deceptive sales and marketing practices, are senior citizens in their 60s, 70s, some in their 80s and 90s. They have maintained lifelong high credit scores, but are faced with little choice but to default on a timeshare loan if the resort dismisses their complaint because they signed a contract. There is little to no secondary market. Coupled with interest rates ranging from 12% to 20% (higher if credit card financing), a timeshare can become a financial nightmare. About a third of those reaching out are younger. The youngest was 19 and pregnant when she signed a perpetual timeshare contract at midnight – after a six-hour presentation.

Timeshare members can negotiate directly with their resort to resolve a dispute, but expect to be challenged with: 

  • You signed a contract,
  • Your allegations are unsubstantiated, 
  • We are not responsible for what our sales agents say,
  • You didn’t question this on the recorded closing (because you believed the sales agent or were coached on what to say or not say). 

How can this posturing and ongoing war between developers and those providing exit services be healthy for the timeshare industry? 

People, members of the media, and even the Federal Trade Commission have started addressing why thousands of members reach seeking release from an unwanted timeshare. The FTC lists Timeshare Sales at #7 on their current Top Ten Scam list and Timeshare Resales (fake buyers) #10.

Related Articles: FTC:  Timeshares: Yes? No? Maybe?

https://salinapost.com/posts/5de93b95-4ba0-4acb-8527-80dd7effccaf

Top Ten Scams

https://www.aarp.org/money/scams-fraud/info-2020/ftc-top-scams.html

Senior Defaults

https://www.linkedin.com/pulse/senior-timeshare-defaults-irene-parker/

HOAs Benefit from Onsite and Offsite Timeshare Resale Programs

https://tarda.org/f/hoas-benefit-from-onsiteoffsite-timeshare-resale-programs

Thank you Irene, a very interesting article and I hope it helps to answer some of the questions we receive.

It should also be pointed out that in the UK, one bank, Shawbrook Bank, did acknowledge a few years ago that they did not carry out their due diligence when authorising timeshare loans, meaning many agreements were signed without the affordability checks. The bank set aside around  £9 million to cover any defaults on these loans as they would have had great difficulty in enforcing these loan agreements in the County Courts. The CEO at the time was forced to resign as he was the one that arranged the agreements with the timeshare companies.

Another point is all timeshare sales companies must be authorised in order to broker these loans, before April 1st, 2014 these would have been authorised by The Office of Fair Trading and from that date by the Financial Conduct Authority. A case that Inside Timeshare has been following was the validation of these agreements by Barclays Partner Finance for loans brokered by Azure Service Ltd who were not authorised. This validation order would legalise the loan agreement and make it enforceable in law.

Inside Timeshare has already uncovered many timeshare companies who brokered loan agreements with various lenders and have found that the vast majority have never been authorised. This investigation is ongoing and is being used to end loan agreements.

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

Press Realease from Azure Malta Action and Support Group: Azure & Barclays Partner Finance

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.

Golden Sands Resort Malta
Sold by Azure Resorts
Financed by
Barclays Partner Finance

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.

Background

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.

Judge Timothy Herrington

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 AzureAzure went into liquidation in 2020.

Main messages

  1. 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. 

  1. 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?

  1. 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?

  1. 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.

Conclusion

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. 

Ruth Lysons

Group Administrator

Azure Malta Action and Support Group

Join Now

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.

Latest on Iconel Administration and Important Court News

As always Inside Timeshare has received many emails and also follow-up emails regarding the many “fake” law firms that are operating, today we add the latest information to one we have highlighted before Inconel Administration SL. We also bring the latest court case against Puerto Calma in Gran Canaria, this time it is not the Court of First Instance or the High Court but the Mercantile Court.

Back in March 2020, Inside Timeshare published two articles on Iconel Administration SL, at the time of writing they had only been registered as a company in Spain for 7 months. The date of their registration is 8 August 2019, at that time there was not a CIF Number on the registration, this is now B93705606, also at the time of writing the registered address was:

C/ Coronel Ripollet Edificio Santos Rein 3a 29640 Fuengirola Málaga

They have since updated their address to:

C/ Victoriano Beamud 19 Arenales de San Gregorio Ciudad Real Spain

They also show the following address on their website:

Plaza de la Iglesia Local 9 planta 2 Primera Puerta 29631  Arroyo de la Miel  Málaga

Which as you will see from the picture taken from Google Street View is a residential street located nearer Madrid than Malaga. It is also a very small place with a population of under 1000.

The registered address for Iconel Administration SL

Our reader this time was contacted by Lawrence Klein, who said he was not a lawyer, (probably the only truthful thing he did say), but a “legal advisor” with a “team of lawyers” and “forensic accountants” for Iconel.

He was offered the “guaranteed opportunity” to receive around £12,000 in compensation from the “directors” of Eze Group. The cost would be“only” £1,750 plus 10% commission on “receipt of compensation”.

Now, remember, the directors Dominic O’Reilly and his daughter Stephanie were convicted at Birmingham Crown Court and eventually Dominic O’Reilly was jailed and Stephanie received a suspended sentence (she was pregnant). The court also ordered an investigation under “The Proceeds of Crime Act”, this has not yet been completed.

So we ask how Iconel is going to get the money from the “directors” considering the case was in the UK and the investigation is not yet complete. That is if they can find any money, as no doubt the O’Reilly’s will have ensured their “cash has been stashed in a very safe place”!

In the past payments to Iconel were to be made by bank transfer, this client wanted to pay by credit card, even if his request is accepted, it will more than likely not protect him under Section 75. From what we have seen in other cases including from the list of associated companies, they will use a third party to take the payment, such as Paypal or a money transfer agency. This then becomes a third party transaction and is not covered by Section 75, sorry you lose your money!

In the links below you will find all the associations with other entities, some even go back around 10 years and include some of the most prolific “fake lawyers” at the time, including our old friends Ramirez and Ramirez with his association to many other companies.

https://insidetimeshare.com/end-of-the-week-and-another-fake-firm-emerges/

https://insidetimeshare.com/its-friday-and-the-end-of-another-week/

https://insidetimeshare.com/start-the-week-more-consumer-warnings/

https://insidetimeshare.com/more-consumer-warnings/

2016 article on the return of Ramirez and Ramirez

https://insidetimeshare.com/the-resurrected/

Yesterday it was announced that the Mercantile Court Number 1 of Las Palmas Gran Canaria, declared a Puerto Calma contract null and void, with the judge awarding over 28,000€.

Usually, these timeshare contract cases go through the Courts of First Instance which are civil courts, but this case is different in that Puerto Calma filed for liquidation. Therefore the case had to be taken to the Mercantile Court in order to have the client recognised as a “preferential creditor”.

This means the client has been recognised as a creditor and will take priority over other debts which the company may have outstanding.

It was back in November 2019 that the first case was reported and this “opened the door” for other claims to be lodged. Inside Timeshare believes there are still many more cases pending and will bring that news when it comes in.

This case was prepared and presented on behalf of the English client by Canarian Legal Alliance.

Further to our mention in previous articles on the continuing story of Barclays Partner Finance, the Financial Conduct Authority and Azure, Inside Timeshare again calls for any member who purchased from Azure with a BPF loan agreement between 1 January 2018 and the end of January 2019 to contact Inside Timeshare.

Unfortunately, due to legal restraints at present we are unable to publish some very significant news on BPF loan agreements, but suffice it to say it is probably very good news for those consumers. More when we are able to publish.

If you require any information on your timeshare, your legal rights and options then please use our contact page and Inside Timeshare will get back to you.