Browse Tag

Resort Properties

The Tuesday Slot: The Timeshare Industry and Scams Work Hand in Hand

Timeshare has been with us for many years now, the original concept was one that certainly sparked great interest, the quality of the resorts and the guarantee of that quality no matter where you booked. But over the years many timeshare owners have been the victims of some very unscrupulous entities, from resale companies to discount holiday clubs and now exit companies, all promising the timeshare owner a way out of their commitment. So we have to ask the question, is the timeshare industry responsible for the proliferation of the many scams involved around timeshare?

In a way, the industry is responsible, the way it has been sold and the difficulties many owners have on getting out of their contracts when they no longer require the membership has made it very easy for the scammers to take hold and make even more money out of the unsuspecting timeshare owners.

In the early days, timeshare was sold as though it was property, the pitch at sales events was very simple, you could not afford to purchase an apartment abroad just for holidays, the cost was too great. So how about purchasing a “share” in an apartment, along with other “owners” you would split the cost of maintaining the apartment and the resort, these were the annual maintenance or management fees.

At first glance this looks like a win-win situation, you get to “own” a share in a luxury apartment in the sun, a place you could call a home from home. You actually believed that you “owned” the apartment and that according to the sales pitch it would increase in value, just as though you owned it outright as real estate.

This then gave rise to the resale industry, with promises of very inflated prices, but this came at a cost. In order to place your “apartment” for sale, a fee was required to “list” your timeshare on their website. Many of these companies operated by way of cold calls, they enticed the “victim” with promises of quick sales and in most cases for more than you originally paid for the timeshare. Remember, you were conditioned at the original sale that you were purchasing property and it would increase in value.

These companies would also make the promise that if they did not sell within the year of the contract, the initial payment would be returned. Great promise until they disappeared after that year and reemerged under a different name. Thousands have been lost in this way.

Eventually, these began to be replaced by the “holiday clubs”, these were basically discounted clubs where you purchased a membership, it was also a way out of your annual maintenance costs. The “holiday club” when you purchased membership would then take your timeshare, in some cases with the cashback system which supposedly paid for the membership and your timeshare after a specific period.

This particular scheme became infamous through its use by Incentive Leisure Group, selling the Designer Way Vacation Club. This whole scheme was eventually shut down and the cashback scheme was shown for what it really was, a total fraud and in many cases, the “member” still owned the timeshare.

Eventually, these clubs have frittered away, one of the last was the Monster Travel, Monster Credits and Monster Rewards dreamed up by Mark Rowe, who was also well known as a sales rep and sales manager for Resort Properties/Silverpoint. As we know this timeshare company has been shown to be one of the most fraudulent in the history of timeshare.

Rowe even took this one step further, he set up “law firms” who would not only exit you from your timeshare contract but also get you compensation. The only problem here is that to do this you also had to “join” his “club” either Monster or the replacement Jive Hippo.

So this now brings us to the present day, the “exit & claims” companies.

Although there are many cases going through the Spanish courts all brought by genuine law firms, there is on the periphery a growing number of operations that are less than legitimate.

These claim that they will “exit” you from your timeshare contract then claim compensation once the contract is cancelled. There is however a fee that needs to be paid to “exit” you from your contract, in many cases, this can be around £3000 or more.

The vast majority of these “exits” never actually happen, we have over the years seen many companies come and go with “victims” losing thousands and finding they are now in arrears for maintenance fees of around 3 years or more. Their contracts were never cancelled despite what the company told them.

So back to our question, is the timeshare industry responsible for these frauds?

In a way they are responsible, it has been their own greed that has allowed these scams to proliferate and continue. The being locked into contracts that are virtually impossible to get out of, the huge rise in annual maintenance fees and not to forget the biggest problem of all, availability.

All these are problems made by the timeshare industry, it is these problems that make owners/members vulnerable to those who see an opportunity to make huge amounts from scamming them. After all, any industry which basically holds its members to ransom making it almost impossible to “exit”, will always be a catalyst for the unscrupulous.

It is a problem that is not going away, as long as the timeshare industry continues to operate in the same old way, there are going to be those who will take advantage of people’s fears and offer them what looks like a simple solution to their problem. Unfortunately, all it will do is empty your bank account.

If you require any information on any company that has contacted you or one that you have found on the internet, please use our contact page and Inside Timeshare will get back to you.

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

https://www.facebook.com/groups/1152657598482168

PDF & Word versions of the template letter

Jeff Prestridge Article

https://www.thisismoney.co.uk/money/comment/article-9070435/JEFF-PRESTRIDGE-FCA-let-investors.html?fbclid=IwAR3M0bPZrnghdan3Ae5zxaGP17CHfiwYQ5llR0V0ELMTzic-j9XZD_3-72E

Articles on the FCA validation

https://insidetimeshare.com/fca-validate-azure-bpf-loan-agreements/

https://insidetimeshare.com/fca-validate-bpf-azure-loans-update/

https://insidetimeshare.com/barclays-the-fca-and-azure-the-story-continues/

Shawbrook Bank

https://insidetimeshare.com/shawbrook-bank-announce-irregularities-timeshare-loans-similar-activities-usa/

Barclays the FCA and Azure: The Story Continues

Since the beginning of 2018, Inside Timeshare has been following the case of the Financial Conduct Authority’s validation of Barclay Partner Finance loan agreements brokered by Azure Services Ltd. As we know, Azure Services Ltd was not authorised or regulated to broker any loan agreements, yet Barclay Partner Finance approached the FCA to validate these “illegal” agreements to make them enforceable in law in the case of any defaults in payments. This has affected over 1,400 clients whose timeshare purchases were made using these loan agreements.

To recap, these loan agreements were made between 1 April 2014 and 24 April 2016 , the purpose was to finance the purchase of “investments” weeks at the Radisson Blu Golden Sands Resort in Malta. These “investments” were sold with the promise of rental income and a substantial profit from the resale of those weeks after two years.

This is the same “investment” product sold by Azure’s sister company Silverpoint (formerly Resort Properties) based in Tenerife, all are part of the Robert Trotta empire which all comes under the umbrella of Limora Investments Ltd.

Those sales have been the subject of many court cases in Spain and over 50 Supreme Court rulings, in every case the courts have sided with the consumer.

It is also a fact that Silverpoint, Azure and a myriad of other companies within the group have all filed for liquidation. The reason is very simple, it avoids the liability of legal action for the illegal selling of timeshare.

Virtually all of these sales were financed by Barclay Partner Finance, with all loan agreements being brokered by the sales staff, which in itself raises the question of “unfair relationship” between broker and lender.

It is also a fact that many of the purchasers through these loans were already retired or about to retire. So again it raises the question how were these substantial sums approved as we know for a fact that not one client Inside Timeshare has spoken with has ever or was ever asked to submit a full “income v expenditure” report. This is something which for any sizable loan needs to be done to ensure affordability of the repayments. (see link below on Shawbrook Bank).

By the FCA validating these agreements any client who is unable to afford the loan repayments due to a change in circumstances and then defaults, can be taken through the County Courts and receive a County Court Judgement. This also has a severe effect on any credit ratings.

Due to the FCA issuing the validation order, this has now left many vulnerable and mostly elderly people in a very difficult position. They have a loan agreement which they were promised would be paid off in 2 years from the sales of the weeks which never materialised.

To fight this decision many “consumers” have formed the Azure Malta Action And Support Group, which is located on Facebook. (link below).

https://www.facebook.com/groups/1152657598482168

Many of these members are already fighting their cases with the help of various law firms, some represented themselves, but due to the validation, they have come together to launch an appeal.

They have already sent a letter, a copy of which is on the PDF link below, to the following:

The Lord Chancellor Robert Buckland

The Right Honourable Robert Buckland, Lord Chancellor

Boris Johnson (PM)

Judge Herrington

Judge Timothy Herrington

The letter goes into great detail on how this product and the loan agreements were sold, the high pressure and lengthy sales presentations. They used techniques such as highlighting the investment into the hotel by two Manchester United players, this along with the fact that BPF was known and tended to be a trusted name, ensured that these non-existent “investments” looked very sound indeed. We do know from the Silverpoint scam, there was never any intention to begin any resales of these “investment” weeks.

This is a story which we are sure is not going away for some time, Inside Timeshare will be following developments and will publish any news on these pages.

If you have purchased through Azure between April 2012 and April 2014 with a BPF loan brokered by Azure, then you should contact Azure Malta Action And Support Group on the link above.

Letter to the Lord Chancellor Robert Buckland

Links to the full story in order of publication.

https://insidetimeshare.com/starting-the-week-2/

https://insidetimeshare.com/start-the-week-13/

https://insidetimeshare.com/fca-validate-azure-bpf-loan-agreements/

https://insidetimeshare.com/end-the-week-club-la-costa-name-change-and-barclays-acknowledge-repayment-of-interest/

General article on loan agreements

https://insidetimeshare.com/timeshare-loan-agreements/

Article on Shawbrook Bank admitting negligence on timeshare loan agreements

https://insidetimeshare.com/shawbrook-bank-announce-irregularities-timeshare-loans-similar-activities-usa/

If you purchased a timeshare using a loan agreement brokered by any timeshare salespeople and would like to know where you stand legally and what options are open to you, please use our contact page and Inside Timeshare will get back to you.