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Judge Timothy Herrington

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

PDF & Word versions of the template letter

Jeff Prestridge Article

Articles on the FCA validation

Shawbrook Bank

FCA Validate BPF Azure Loans: Update

In October Inside Timeshare published the news of the FCA (Financial Conduct Authority) validating loan agreements brokered by Azure Services Ltd on behalf of Barclay Partner Finance, at the time Azure was not authorised to broker the agreements either by BPF or the FCA. This case has affected around 1,444 Azure clients, who essentially now that the validation order has been approved, may be liable to legal action if they default, as the FCA has essentially “legalised” these agreements.

In August 2018, Judge Timothy Herrington of  Upper Tribunal Tax and Chancery Division of the Royal Courts of Justice ruled that the FCA reconsider the validation order as he considered that the FCA did not consider the impact of consumer detriment.

Judge Timothy Herrington

This “consumer detriment” covers the fact that not one “income versus expenditure” report was ever completed to check the affordability and ability of the consumer to keep up the payments. That the terms and conditions, the length of the loan agreement and other factors were also not explained to the consumer. It also transpires that the consumers were also under the impression that the timeshare sales staff were actually employees of BPF.

These are just a few of the factors which Judge Herrington brought up in his ruling, now 2 years on, the FCA has validated these loan agreements, it seems obvious that they have not considered the true impact of “consumer detriment”.

In fact, from very reliable sources Inside Timeshare, the FCA only sent out a questionnaire to 82 clients out of 1,444, this is only around 5% of those affected. This decision is now looking to those clients as being just a “whitewash” with the FCA backing one of the largest financial institutions in the UK.

Although the FCA has ordered BPF to repay all interest on the loan agreements and stop any further interest on the outstanding amount, this has not had the effect of cancelling the loans as “illegal”. It now puts those who are in financial difficulty in a precarious position if they default.

Inside Timeshare is also in contact with several clients who are disgusted with the FCA decision, they are forming a group with the intention of launching an appeal against this decision. Inside Timeshare is asking all those affected by this decision to use our contact page and register your interest in this appeal as soon as possible. Inside Timeshare will pass on your contact details to the group where they will give you more information.

The way timeshare sales have utilised the easy access to loan agreements without the necessary checks has been a regular feature over the years on Inside Timeshare. Below are just a few of the previous articles on this subject.

The first article is about Shawbrook Bank who in 2016 admitted their failure in their due diligence on the affordability of the loan agreements. They set aside £9m to cover any defaults on the loan agreements, the CEO at the time had to resign.

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.

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