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Resort Properties

Timeshare Sales and Finance Agreements

Timeshare is not a cheap product, not just the ongoing costs of the annual maintenance fees, the costs of flights and not to forget the money required to feed and water your family during your stay, but the initial cost is high, to say the least. The average cost of a week’s worth of basic timeshare begins around the £10,000 mark, from many of the legal cases we have highlighted that cost has been two to four times that amount.

For those who became involved with Resort Properties which then became Silverpoint, we have seen figures going as high as £100,000, in some cases more. The reason for these high figures, as we now know, was the “investment” pitch, the purchase of multiple weeks and apartments with the promise of a rental income and then a sale of the weeks for a sizable profit.

These never materialised, a fact we can see in the court cases in Tenerife and the subsequent liquidation of Silverpoint. We also know that it did not end with the first purchase, after the two to three year period when the weeks were eventually to be sold, the unsuspecting “investors” were then told the weeks and apartments they purchased were not popular so were not selling.

Never mind, Silverpoint would take them off your hands and sell you better weeks and apartments, and so it went on.

But how were these huge purchases financed, from many of the statements from these victims, they told the sales staff it was not affordable, but that was not a problem according to the salesman. He and his manager can arrange finance, in this case through Barclays Partner Finance.

It was a simple process and the loan application would be granted without any problems, and so it was. By the end of the presentation, the “victim” had purchased the timeshares and signed the loan application. By the time they returned home, BPF had already sent the letter congratulating them on their purchase and for using BPF!

So what is the problem I hear some of you ask?

The problem is very simple, the loans were granted without all the usual checks that one would expect for a loan ranging from £30k upwards.

This is not unique to Silverpoint, other timeshare sales companies used the same technique to “broker” loans for the purchase, the “guaranteed” acceptance for the loan. All were accepted by the various finance companies they used, without question.

The three main finance institutions involved with timeshare finance are Barclays Partner Finance, Hitachi and Shawbrook Bank. Only Shawbrook Bank has acknowledged they did not do their “due diligence” when authorising these loans. They set aside around £9 million to cover any defaults in repayments for these loans and the then CEO was forced to resign. See the link below on their admission.

So what do we mean by “Due Diligence”?

Very simply put, it is the lender making sure that their money is secure and will be repaid.

How many of you have gone to your bank or a finance company to ask for a loan for a sizable purchase, it may be a new car, an extension to your home, anything where a large loan is required. From personal experience, the loan was never as straightforward as it has been with purchasing a timeshare.

Apart from the simple credit checks, i.e. any CCJs or defaults, proof of income is required, usually, at least the last 3 months pay statements, for yourself and the wife if you are married. Then there is the all-important Income v Expenditure statement, in this, you will show your monthly outgoings, this is everything, from household bills, right down to what you may spend at work for lunches and coffee per month.

From this and the proof of income they can see if the loan repayments are actually affordable, that you have the “spare” income to cover the repayments without leaving you “short”. In other words “responsible lending”.

Shawbrook admitted they had not done this vital part of the application, they and the other finance companies relied on the information provided by the “timeshare sales staff”, who had a vested interest in making sure the loan was approved.

This is now where we have a problem.

It has always been the way in most sales and especially timeshare, that they are commission-based, in other words, no sale no pay. Some timeshare sales did pay a very meagre “basic” but in many instances, these were based using the old “On Target Earnings”, you don’t make your target you don’t get paid.

This means that the pressure to get you to purchase is going to be even stronger, no matter how you may try to explain you cannot afford the price, the loan option is always going to put more pressure on you to sign.

We must also not forget that the salesman also receives a commission from the finance company, so it is a double-dipper for them. Somehow I see a very “unfair relationship” here, the salesman wants the sale and the lender wants the business. After all, the total repayment is around double the original purchase price, these loans are not cheap.

A Typical BPF Loan Agreement showing the total cost of the timeshare with interest.

For the finance companies to rely purely on the information supplied by people with a vested interest in making the sale with a loan, is in our book totally irresponsible. At least Shawbrook admitted as such.

So far in all the cases that Inside Timeshare has seen on this subject, not one client has ever had to show any written proof of income or have had to provide an “income v expenditure” report. At no point has any of this information been provided by the lenders, even though upon request they must produce it, they have not even been able to produce any of this information on the loan application provided by the timeshare sales.

This would suggest that there is a very serious problem here, it also becomes more serious when we look at the loans and the timeshares they were used to purchase. The vast majority were made in Spain, which with their very strict and consumer-friendly timeshare laws, these loans were used to purchase a product that has been deemed illegal according to the law.

For these institutions to be a party to the underhand sales techniques used in timeshare makes them in our opinion worse than the timeshare companies. We have to ask the question, were the finance institutions duped into these loan agreements by timeshare or was it just greed on their part?

Somehow I think your answers will be the same as mine, GREED!

If you purchased a timeshare in Spain after January 1999, then your contract may just be illegal, if you would like to know for certain and the purchase was also made using a finance agreement, then please use our contact page and Inside Timeshare will get back to you.

Friday’s Letter from America

For a long time now Inside Timeshare has reserved Friday for our Letter from America articles, which over the years has given consumers on both sides of the “Great Lake” or “The Pond”, depending on which side of it you are on, a glimpse to the similarities owners/members put up with. Even the scams are basically the same, from “Fake” law firms to “Resales”, even the Modus Operandi tend to be the same. Many of these have been highlighted on our pages, some of the emails and experiences have been hard to read, many have been words of thanks.

One of the main points which has been a subject for discussion on these pages are the “SALES” tactics used during the “Presentation”, this has become a thing to be dreaded by so many. The constant “upsell”, with all the false promises.

The tactics we have published in our Letter from America series are, to say the least disgusting, we dubbed them Nightmares on Timeshare Street

In most cases, the “victims” are elderly, vulnerable and sometimes with severe illness, in other stories we have heard how Veterans have been harmed, serving forces personnel have been at risk of losing their positions and security clearance. Others still, have been low-income families, we even had one story of a family losing their home.

But this is not unique to the US, in Europe, we have had our fair share of “Nightmares on Timeshare Street” stories.

One was the recurring story of Mrs B and her very long battle with MacDonald Resorts, a Scottish based company. Then there was the operation running out of Tenerife, which was once dubbed The Biggest Fraud in Timeshare History. That is one description Inside Timeshare totally agrees with.

Yes, we are talking about Silverpoint/Resort Properties, this one took timeshare to another level of fraud.

The Suites at Beverly Hills Heights, Tenerife. Sold by Silverpoint, managed by Excel. Both are part of the Limora Group.

They did not just sell one or two weeks, which is what most people actually need, no, they sold “packs” of weeks and apartments, usually around 6 to 8 in each sale. These were pitched as an “Investment” in “Property”, they would yield an income through rental, then after 2 or 3 years when they “went up” in value, they would then be sold by Silverpoint. You, making a tidy profit, NOT!

Again the smooth-talking, well-trained sales staff and managers loved to target the retired, just retired and about to retire, another group that can be added are those that were being made redundant/early retirement. It didn’t end there, as the court cases and investigations go on, more is coming to light.

In the US regulation is very complex, there are so many laws each dependent on individual states, there is no Federal Law to regulate the industry and protect consumers. The same was the case in Europe, it was a complete mish-mash, there was no Europe wide protection. Then in 1994, the first EU Directive on Timeshare was brought in. Over the years these have been augmented and updated, taking into account the lessons learnt from the past, such as increasing the cooling-off period in all EU Countries. It was also required that they were incorporated into domestic law, not just to regulate the industry but also to protect the consumer.

It’s not perfect, some countries watered them down, some strengthened them, Spain was at the forefront to enable what have become the strongest Timeshare Laws in Europe. These came into force on 5 January 1999, but, as we now know many of the timeshare companies failed to comply with Spanish Law and ignored them.

Would you accept watered-down wine?

The result is the legal cases being lost by them on a daily basis, they believed they were “untouchable”, all we can say is “It’s your own damn fault!”

Since Inside Timeshare began the US perspective, we have all learnt one thing, that you are not a lone voice, there are others out there who are going through the same thing. It is a fact, whatever practices are used across the pond, they will eventually be used this side of the great lake and vice versa.

The Fridays Letter from America slot will still be a part of Inside Timeshare, myself and Irene have learnt a great deal from these exchanges, we are also sure that all you readers have as well, we still have a lot to learn, as they say, timeshare never sleeps. The new format will not be weekly but a monthly slot, as Irene is involved in a great deal of important research work, but she will be dropping us an occasional letter. Obviously, if and when important news develops such as the Hilton acquisition of Diamond, that news will be fitted in.

Have a great weekend and join us again next week.

Trade & Regulatory Bodies: Can You Trust Them?

A couple of weeks ago Inside Timeshare published two articles, the first was on Celebrity Endorsements, the second on Sponsorship Deals. Both painted a rather sorry picture, but it doesn’t end there in the battle to get as much money out of you as possible, regardless of what the product is. There is another form of endorsement, “TRADE BODIES” and so-called “REGULATORY BODIES”.

You have all seen them, in fact, there has been a proliferation of them over the past few years, they may be small, and aimed at a specific trade, for instance, self-employed plumbers, gas fitters and a host of other things. Their purpose is to give you the confidence to employ them.

The person wanting to become a member will usually have to prove their quality, customer satisfaction and also abide by a code of conduct and ethics. Usually, the new member will be under a probationary period, then if the trade body is satisfied with how they conduct business, they will allow them to display the logo etc.

Generally, these small trade bodies work very well, rogue traders are normally weeded out fairly quickly, after all, the other traders will definitely not be happy that their livelihood is jeopardized by a rogue.

Unfortunately, it cannot be said for all Trade Bodies, it would seem that the larger and more wealthy the “TRADE”, they will do nothing to protect the consumer.

OK, you’ve guessed it.

We are talking about the RDO (Resort Development Organisation) in Europe and ARDA (American Resort Development Association) in the US. Today we will focus on the RDO.

Trade and Regulatory Bodies as we have said are there to promote good practice and quality, they have their “Codes of Conduct & Ethics”. They say they will sanction any member who breaks these rules. But do they?

Here is where I would like to bring in the subject of Silverpoint, formerly Resort Properties, the CEO was Mark Cushway. We all know the story, it has been published on Inside Timeshare, the Press, TV, and numerous forums.

How many people were duped into forking out huge sums (into the millions of Euros) on the “products” that the company peddled, and we must not forget the “PARENT” company, The Limora Group? It was the “Empire” of the late Robert “Bob” Trotta. I know the spelling for the surname is different, but it does conjure up a favourite “good villain” in a great British comedy show.

Joking aside, you only have to search Inside Timeshare to get the whole sorry tale.

This went on for years but did the RDO do anything even though both companies were “Paid-up Members”, and surely they must have received many complaints from consumers?

The answer my friends is a resounding NO!

According to the RDO “Code of Conduct & Ethics, they will not mediate in any dispute between the consumer and the member!

What a get out!

Now we introduce you to one of the former Directors of the RDO, yep, it’s our old friend Mark Cushway. As the CEO of Silverpoint/Resort Properties and under the control of The Limora Group, he was a director of the RDO until he resigned a few years ago. It should also be pointed out that Silverpoint/Resort Properties were reputedly the largest contributors to the RDO funds.

Say no more.

Mark Cushway, Former CEO Silverpoint and Former Director of The RDO

Several years ago Inside Timeshare published the article “A New Member to EGTBW”, it was a spoof article written to show how much of a joke these trade bodies are. EGTBW stands for the European Guild of Timeshare Blog Writers, it is affiliated to the IATBWG, the International Association of Timeshare Blog Writers Guilds

The “Code of Conduct & Ethics” for this article was actually inspired by the RDOs own codes and their unwillingness to act on behalf of the consumer. Everything they seem to announce and publish appears to those of us who follow these events as nothing but “Smoke & Mirrors”.

Yet they have the ear of the lawmakers, their lobbying machine is very efficient, to the point they influenced the House of Commons and the House of Lords into the very watered down English Timeshare Laws, in other words, the very basics. These laws were initially instigated by the E.U. Timeshare Directives to protect consumers and had to be placed in domestic law. Spain so far is the only European Country whose lawmakers have ignored the lobbying and put into place very strict regulations protecting the consumer of timeshare. Well, in Europe, Spain was the “Hotbed” of timeshare sales.

This is quite clearly shown with all the timeshare companies that operate in Spain who are now losing in the courts on a daily basis. It is costing them Millions of Euros, yet what do we hear from the “Trade Body”? It’s the Judges, they have got it wrong, they are interpreting the law wrongly!

What a joke, attempting to back up their “members” who are on the ropes and losing hand over fist and they blame the judges who ruled on 130 cases at The Supreme Court, Spain’s highest place of justice. If they were a genuine “Trade Body” shouldn’t they be on the side of the consumer and either make the timeshare resorts comply with the laws of the country they operate in or sanction them?

After all, their own “Code” does say that all members must abide by the jurisdiction and laws of the country they are operating in. You can’t get any plainer than that!

Once again, Inside Timeshare leaves it up to you the reader to decide, we welcome your comments so please do use the contact page or comments section. I’m sure that we will receive some good ones.

In the link below is the original article “A New Member to EGTBW”, which was first published on 14 June 2016, wow, that long ago. Have a read it will make you chuckle, but there is a very important message in there.

Inside Timeshare must point out that at the time of writing the resort mentioned had ceased to be a member. This fact was published later, but it still begs the question, if they will not protect the consumer from their own members, why did they not help consumers against the non-member, in other words, the “rogue” trader?

Below is the link to “Exclusive Breaking News: The Truth Behind Silverpoint Exposed.” It is a six-part article that was published between 5 June 2019 and 24 June 2019. The link also covers the Azure liquidations, they are also part of The Limora Group and sister company to Silverpoint.

Enjoy your reading. It certainly is an eye-opener.

If you purchased a timeshare, either fixed week, points, floating weeks or fractional and would like to know if your contract is illegal under Spanish Timeshare Laws, please use our contact page and Inside Timeshare will get back to you.