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

PDF & Word versions of the template letter

Jeff Prestridge Article

Articles on the FCA validation

Shawbrook Bank

Is It The End of Timeshare Sales in Europe and What About the RDO?

Welcome to the end of another week with Inside Timeshare, it has certainly been a busy one with so much news coming in from the courts and some more scam warnings were also issued. We began on Monday with news of the latest payouts to clients from cases against Anfi, this also included a warning on misinformation being put out on various forums regarding clients not getting paid out. On Tuesday we brought you more news from the courts including those from another timeshare law firm and also from an independent lawyer. We then published the story of the “fake” law firm supposedly operating out of Madrid and claiming to be working for the Courts. There is no company name but there are plenty of fake court documents. There was also more news on the “Battle for Anfi Payments”, this article followed one case which is now over with the client finally receiving their money. This story explains why there is such a “battle” to secure clients funds from Anfi, it is a real eye-opener.

Today however we have a look at the future for the timeshare industry and what it may hold for timeshare resorts/companies and the RDO (Resorts Development Organisation) the supposed “Trade Body” of the timeshare industry.

Over the past few years, we have seen many “timeshare sales” companies closing their “sales decks” with many sales staff losing their jobs.

Around three years ago, Diamond Resorts closed all their sales decks around Europe keeping on a few of the “in-house” sales reps. This was followed by Silverpoint, then recently the announcement that Club la Costa has now closed down all of their timeshare sales. It is also a fact that even Anfi has cut down on their cold line and in-house reps. The reason, well, there are several which we can think of, obviously, the first is the lack of sales on the “cold line”.

The “cold line” is your first introduction to timeshare, you will probably have been picked up on the street by an “OPC” with those wonderful “scratch cards” where you are the “only” winner of the “star prize”. (Sorry, but everyone’s a winner).

You spend several hours (after being told it is only 90 minutes), being given “the hard sell” along with “selling the dream”. Everything sounds great and you are then convinced to sign up. You are now a “proud” timeshare owner, but you also now are fodder for the in-house reps to attempt to upgrade you every time you holiday.

As people have become aware of the tactics used to get you to these presentations, it has become increasingly difficult for the OPC’s on the street to get people  “on the tour”. Those that do are not as easily convinced to purchase as they were years ago when timeshare first appeared and during its heyday in the late 80s and early 90s.

Another reason is that so many of the current owners/members are now elderly and are giving up their timeshares either through relinquishment or by taking the case to court having the contract declared null and void plus the return of their purchase price. Now there is a severe lack of new members, the management companies are now liable for the maintenance on the unsold and returned weeks.

So with the lack of sales, the closure of the sales decks, the diminishing membership base what is the future for the timeshare industry and the RDO?

Timeshare ownership has been on the decline for years, leaving the management companies with more weeks on their inventory than members in many cases, so they need to make up the shortfall. This has been done by advertising those weeks on various booking websites, this has tended to infuriate members who due to owning floating weeks or points (which incidentally are illegal in Spain) find that there is a lack of availability. Many are able to book cheaper than the annual maintenance fees!

As for the RDO, over the years they have always backed up their members, they have ignored the fact that it is their own members who have been selling contracts which are illegal in Spain. It is their own members who are being taken to court for these illegal contracts, yet they make no mention of it apart from the odd statement that they believe the Courts and the Supreme Court have interpreted the law incorrectly. We wonder why?

A great case in point is that of Silverpoint, for years this company along with their predecessor Resort Properties sold many illegal contracts, the most prolific were the “investment packs” of weeks. These were supposedly weeks which would gain a rental income and after 2 years be resold at a profit. This was later replaced with the “company participation scheme”, the same thing under another name.

These “products” have been clearly deemed as illegal and there are hundreds of cases waiting to be heard in court, which is a large contributing factor to the closure of sales and the liquidation of Silverpoint. Yet, Silverpoint were one of the largest contributors to RDO funds, the CEO of Silverpoint, Mark Cushway was also a director of the RDO!

So it is not rocket science why the RDO does not mention or sanction these companies for their “illegal” practices, it is their payments that keep this “organisation” afloat.

Now when Silverpoint withdrew their membership and Cushway resigned as a director, the RDO still said absolutely nothing, even though they were no longer members and have been completely discredited in the courts.

This also brings us to Kwikchex, this company replaced the discredited Alberto Garcia and mindtimeshare website, their brief is to bring to the attention of timeshare members the “bogus” practices of the many companies on the periphery of timeshare. But, only if they are not members of the RDO, yet did they say anything about the practices of Silverpoint, the answer is a resounding NO!

So what of the RDO if other timeshare companies go the same way, how will the RDO be able to function without their annual subscriptions?

That is the million-dollar question as it would not take much to diminish that income, after all, it appears that the RDO only represents around 10% of the timeshare industry in Europe and these are the major companies such as Diamond, Club la Costa and Anfi.

We know that Anfi is also in dire straits legally and financially, the majority shareholders and controllers of Anfi is the Cazorla Group, they are on the verge of being placed into liquidation. The number of claims and the amounts being seized by the courts is absolutely staggering, there is no way the sales company can survive. When they do finally go, will Anfi be withdrawing from the RDO?

This year has been very hard for the holiday industry with all the restrictions being imposed around the world, hotels have had to close resulting in a severe loss of income, timeshare, however, has fared a little better.

The reason being is that they are still demanding the payment of the annual maintenance fees even though the members cannot use it, resulting in many complaints about the fees. Will they get a refund, will they get a reduction in next year’s fees?

Unfortunately from the enquiries received by Inside Timeshare, this does not seem the case. In fact, Anfi has been downright despicable in this matter.

Members are basically being “blackmailed” into signing the new Anfi contracts or they will not receive a voucher to save this year’s week. The reason for the “new” contract is very simple indeed, ever since the introduction of the timeshare laws on 5 January 1999, Anfi has continued to sell their product in breach of these laws. Again nothing from the RDO except their backing of the Anfi claim the “law is wrong”.

The issue of the “new” contract is specifically designed to bring them within the law, with the duration set at the maximum of 50 years, along with the allocation of a week number and apartment number which then gives the impression that it is a fixed week. In fact, the contract still calls it a floating week. We also suspect that the same weeks and apartments have been allocated to several members at the same time!

So to answer our question of what does the future hold, well it does look very bleak indeed, timeshare seems to have had its day, people have found better and cheaper ways to holiday without the huge initial income of the timeshare purchase and the obligatory annual fees. The standard of hotels on package holidays has also improved considerably as many of the timeshare resorts have become dated. Along with the increasing number of elderly members wanting out and no new young blood purchasing, the timeshare industry will slowly diminish with many timeshare resorts reverting to standard hotels. Could this be the future for Anfi if they do liquidate, after all the minority shareholders with no direct control at present, are a major hotelier?

As for the RDO, with the demise of the industry who are they going to represent, after all, we have said that they only seem to represent 10%, so to lose another few of their main contributors would certainly reduce their influence.

Kwikchex, well your guess is as good as mine, we are sure the CEO Chris Emmins who has a rather colourful track record (see link below), will find another company to “contract” their services!

Chris Emmins CEO Kwikchex

In the end, the timeshare industry has only itself to blame for its demise, for years they have reaped millions of euros in sales yet have given virtually nothing in return. They have flouted the laws in virtually every place they operate and all with the full sanction of the RDO who will not investigate or adjudicate on any complaint against their members.

The industry does need to change and wake up to the realities that they are no longer the “must-have product” of the past, they need to reevaluate what they do and how they do it, they need to become more consumer/member aware. There will still be a timeshare industry, but this will be limited and more than likely appeal to the high-end market rather than the ordinary Joe in the street who was “kidnapped” and cajoled into purchasing.

Timeshare as we know it is a thing of the past, this year I believe has really put a spanner in the works, owners/members are waking up to the fact that they mean nothing to the companies apart from a readily available source of income. What we call “cash cows on a money-making conveyor belt”.

Are you experiencing problems with your timeshare, are you getting what you paid for and were promised, is your contract illegal, do you want out for whatever reason?

If you are answering yes to these questions and would like further information on your legal rights and your options, please use our contact page and Inside Timeshare will get back to you.

Have a great weekend.

Article on Kwikchex

General search on RDO articles