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Financial Conduct Authority

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?

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.

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.

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.

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:

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?

Top Ten Scams

Senior Defaults

HOAs Benefit from Onsite and Offsite 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.


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.


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.

Start the Week: Are They Genuine?

Welcome to the start of another week with Inside Timeshare, today we have a look at how to spot a possible scam, what to look for and the warning signs to be aware of. Over the past months, there have been numerous new “fake” law firms, claims and exits companies appearing, with Inside Timeshare issuing many warnings. Unfortunately, many timeshare owners have been taken in by them only to find they have been scammed after they have paid.

One of the first points that you should consider is the initial cold call, although cold calling is not illegal, you should be very cautious about who they are and how they have your details. What information are they holding, do they know what and where you own, do they also know about any previous contact with “fraudulent” companies? These are usually telltale signs that the data they hold may have been obtained illegally, either it has been stolen from the timeshare resort or has been passed on by other fraudulent entities, usually the same people behind the new company.

During the call it is up to you to do the questioning, what is their full company name, where are they registered, do they have a company registration number and can this be verified. This point does not guarantee they are legitimate, anyone can register a company for very little outlay, just because they are registered does not mean they are not scammers.

What is the company address, is it a permanent office or one of the virtual offices often used to register short term companies. How long has the company been registered, does this correspond with what you are told, such as they have been operating for say 5 years, yet the company was only registered 1 year ago!

Does the company name appear on any searches, or does it show many companies with the same or similar name?

Many of the new cold callers are using names of genuine law firms or variations of them, even down to a similarly named website. A good example of this point is one article published last week on the law firm Cabrera Ayala Abogados, where a genuine lawyer’s details are being used. Even down to the address being very similar. The other example is of a Spanish Registered Lawyer and UK Registered Barrister, Jeremy Scudamore, both of these can be seen on the links below.

What is their website, is it a new one or one that has been operating for a number of years, When was it registered and for how long? Is the registrant hidden by a privacy protection service, hiding the people behind it? Again another point to give concern. 

What telephone numbers are they using, have they appeared on sites such as Who Called Me, and what comments have been made?

Are they landlines, mobile or VOIP used mainly on internet telephone systems from third-party providers?

Does their email address go to the website or is it a free email service such as Gmail, Yahoo or ones that we have seen regularly with our friends the Litigious Abogados Family from Tenerife, such as or

Any email that is not directly attached to their website is usually a very good sign of a scam operation.

On the website itself, does the website show any company details, such as company registration numbers, Solicitors Regulation Authority registration, for Spain are they registered with their local Colegio de Abogados?

If they are processing claims they may also need to be registered and regulated under claims management with the Financial Conduct Authority. This does depend on the type of claims management they are undertaking. Do they have an FCA registration number?

Even if this number appears on the website, it does not mean they are registered, especially if they are a new company. They may have applied and only have “temporary” approval, permanent approval is not given straight away, there is a period where the FCA will be investigating them before they finally approve full authority, this can take at least one year.

On the website, is the information shown correct, how is it written, does it look like it has been cut and pasted from another “legitimate” website?

How is it written, is it full of spelling and grammatical errors, are they trying to use legal terms to make it look like a genuine law firm?

What services are they offering, is it a fully legal claim which will for Spanish purchased timeshares need to go through the Spanish legal system with a genuine and registered Spanish lawyer?

Or, are they offering a relinquishment first (for a fee) and a “compensation” claim on a no win no fee basis, remember once you have cancelled your contract no case can then go through the courts. The contract must still be running with all maintenance paid to date, so the question is how is the “compensation” going to be claimed

How do they expect you to make a payment?

Do they have Credit Card facilities, if so who is the payment made to, is it the company that is carrying out the work or a third party?

If this is the case you may not be covered by Section 75 of the Credit Consumer Act 1974 under the third party payment rules. As an example, you pay company A, the work is supposedly carried out by company B, which does not do the job, you have no claim against either party. Third-Party Rule.

Another point to consider is the use of third party payment companies using your credit card, these are money transfer agencies such as PayPal and Transferwise. Using your card to pay using these methods also invalidates your rights under Section 75.

If you are requested to make a payment by bank transfer, who is the payment being made to, is it a company account or to a named private individual?

Lastly, have they sent you any documents, do they look genuine?

Many of these fake documents including court rulings have been published on Inside Timeshare over the years, some are exceptionally good, especially if you have no experience of any legal documentation. There will always be telltale signs, the most common for court documents is the “case number”, these can be checked and verified, with our experience we can tell them to be fake at a glance. You unfortunately may not be so lucky.

Example of a Fake court document sent out by the Litigious Abogados Family.

These are just the basic rules to be safe when dealing with either cold callers or any company you may have found on the internet. If you require any help in verifying these companies, please use our contact page and Inside Timeshare will get back to you.