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timeshare

Lowcost Travel Group Administration

Although this is nothing to do with the timeshare industry, it was felt that an article on this company was needed.

 

Lowcost Travel Group announced on Friday 15 July 2016 that it had been placed into administration, the company dealing with this is: Smith & Williamson and CMB Partners. Customers are instructed to contact Martyn Frazer or Paul Stagg at the following email address: [email protected]

 

It is believed there are currently around 27,000 customers already at resorts, and 110,000 with bookings, who have yet to travel. For those already on holiday, there should not be any problem as their flights and hotels should have already been paid for. It is those yet to travel who will have the problems. The reason for this is the company operated on very narrow margins, it relied on new bookings to help the cash flow and pay for flights and hotels of those already booked. This does seem a little odd, that a company can operate in this way, using payments from new bookings to pay for ones booked earlier. But apparently this is not unusual in this sector of the industry.

lowcost travel

Lowcost Travel operated from bases in the UK, Spain, Switzerland and Poland, the number of job losses will be: Gatwick 120, Krakow 264, Mallorca 60 and Switzerland 7.

 

Although the redundancy numbers are low, it is the cost to the customers that will be the greatest. Those with bookings and yet to travel have been advised they may have to cover the costs of flights, pay transfers and hotel accommodation locally. They may be able to claim back through travel insurance or credit cards, but the CAA  (Civil Aviation Authority) who operates the ATOL (Air Travel Organisers Licence) scheme which is a safety net for these eventualities, has stated that these holidays are not covered by them. The reason is that Lowcost Travel relocated to Spain and being registered as an entity in Mallorca, are not in the CAA jurisdiction, the CAA warned about this in 2013. Lowcost Travel had dismissed this by stating they were covered under the Spanish scheme.

 

So why did this happen?

 

The reasons being given are, that due to the Brexit referendum, many customers delayed making their bookings, resulting in the cash flow problem, then there was the fall in the pound against the euro after the leave vote. This had the impact of reducing bookings further as they became too expensive. The Guardian newspaper published an article 10 July 2016, on the number of people opting for holidays at home, the article stated that it would cost an extra £245 for a family of four because of the 10% drop in the pound. (see link at the end).

 

Other reasons are the increased terror threat, which has impacted the travel industry. The list of destinations according to Smith Williamson are:  Egypt, Turkey, Tunisia, Orlando, Brussels, Paris and this list will now include Nice.

 

Lowcost Travel was founded by Paul Evans in 2004, he had previously been resort manager for Club 18 -30. According to their last filed accounts, in the year up to October 2014, they had sold holidays to the tune of £477 million, with a pretax loss of £47,000. It is not hard to see what the impact a drop in bookings would have by these figures.

 

If you have booked and require any information please go to the following links.

smithwilliamson

http://www.smith.williamson.co.uk/news/8711-lowcosttravelgroup-ltd-smith-williamson-and-cmb-partners-uk-appointed-joint-administrators

 

http://www.lowcostholidays.com/

 

The above link has email addresses for customers who have booked with any of the companies not covered by the administrators.

 

The Guardian article on UK tourist industry.

 

https://www.theguardian.com/travel/2016/jul/10/brexit-and-the-uk-tourist-industry

 

BBC News link

 

http://www.bbc.com/news/business-36810558

Links to information on Section 75 and how to claim from your credit card.

Claiming Money Back From Your Credit Card.

 

 

If you have any questions about timeshare or holiday ownership, resales or claims, Inside Timeshare will find the answers.

 

Shawbrook Bank Announce Irregularities in Timeshare Loans, Similar Activities in the USA.

For many people their Timeshare or Holiday Ownership was paid for on Finance, these loans were usually arranged on the day of signing the contract by the sales staff. One of these lenders is a bank called Shawbrook Bank, with their head office located in Brentwood Essex. The bank was founded in 2011 and according to their web site works closely with the holiday ownership industry to provide finance for their customers.

 

Unfortunately it was announced recently that the bank had set aside around £9 million to cover any defaults in these loans. This has come about due to the discovery of irregularities in the issuing of these loans.

shawbrook

Shawbrook Bank has admitted that it did not do its due diligence when approving the finance for holiday ownership products. One of its biggest partners is Diamond Resorts, whose aggressive style of selling has resulted in many people being over stretched financially, then being lumbered with a product that they find is unworkable. They are also stuck with management fees that are continually rising, also being unable to get out of their contracts.

 

http://www.telegraph.co.uk/business/2016/06/28/shawbrook-banks-shares-plunge-on-9m-hit-from-dodgy-lending/

http://www.thisismoney.co.uk/money/markets/article-3663651/Shares-Shawbrook-drop-challenger-bank-reveals-loan-irregularities-cost-9m-finance-chief-quits.html

 

What did Shawbrook miss on its due diligence?

 

Quite simple, finance agreements made out by sales staff on the day of the sale have not had the usual credit checks made. Normally when a loan is applied for there are several checks that are made, we all know this as at some point we have had them. Firstly, does the applicant earn enough to qualify for the loan. Secondly, can the applicant actually afford the repayments, after other payments are taken into consideration, i.e. mortgage, living expenses etc. Lastly does the applicant have a good credit history, in other words have they defaulted on any other finance, be it loans or credit cards, or have they had county court judgements made against them

 

All these are the usual checks, being unable to fulfil any of these criteria would normally prevent the loan from going through.

 

Another aspect is how the applications are filled out, Many people spoken to over the years have said that the application had been filled out by the staff. It later transpired that the purpose of the loan had been made out as “home improvements” nothing to do with the purchase of holiday ownership. In some cases, even the income has been falsified. Unfortunately, for the applicant this could lead them to the possibility of criminal charges, after all they have signed the form.

edwincoe

This is not the first time a bank has hit the news in relation to holiday ownership, Barclays Partner Finance has been the subject to action in the High Court on this matter. Edwin Coe LLP, represented many clients of Resort Properties, who had been sold “investment packs” which were then financed by Barclays Partner Finance. On 16 August 2015, Edwin Coe LLP announced that the High Court had decided in favour of the consumer.

http://www.edwincoe.com/our-expertise/group-action-litigation/resort-properties-barclays-partner-finance/

http://www.edwincoe.com/high-court-decides-in-favour-of-the-consumer/

 

Many of these loans did not have the usual credit checks made, in fact Inside Timeshare is aware of an elderly couple who had been given one of these loans. They had been talked into one of the Resort Properties / Silverpointinvestment packs”, at the time he was 8o years old his wife 76, the loan was for £30,000, yet both are on pensions. When Inside Timeshare spoke with them, the question asked was, had you gone to your bank, do you think they would have provided the loan? Well we all know what the answer to that is. They are now taking legal action.

barclays

Unfortunately this is not just the case for Europe, in the United States the same controversy exists.

 

Roddy Boyd of the Southern Investigative Reporting Foundation has been highlighting this, on 27 April 2016, he published an article on a Credit Union which has been supplying loans for Diamond Resorts clients. Quorum Federal Credit Union has been in operation for 82 years, as with all credit unions they are member based.

quorum

http://sirf-online.org/2016/04/27/the-enabler-and-the-lifeline-diamond-resorts-and-quorum-fcu/

 

Quorum, has been supplying loans for the holiday ownership industry for years, Diamond Resorts are their largest portfolio. Diamond tend to send the riskier applicants to the credit union, these are those in the lower credit ratings, what the Americans call “subprime”. In other words the banks would not touch them with the proverbial barge pole.

 

According to Roddy Boyd the deal provided around $40 million in loans for Diamond and in return these borrowers became members of Quorum. Sounds like a win win for both, (not the consumer).

 

At least Shawbrook Bank have admitted that it has seen a problem in this area, setting aside a substantial amount to cover any future problems. In the end a loan for a holiday product which will on average be around £10,000 or more, is a huge commitment, not one that should be signed and approved on the day. Especially by the sales staff who have a vested interest in getting the “deal”.

 

Inside Timeshare would like to thank Irene Parker of the The Street for supplying the link to Roddy Boyd´s article. Do read it in full yourself as we have only just touched the surface, also read the following link, again it makes interesting reading.

 

http://sirf-online.org/2016/03/07/27464/

 

If you have any questions relating to this article or any others published contact Inside Timeshare and we will try to find the answer for you.

Going to a Meeting? Best Advice.

Over the past week Inside Timeshare has had enquiries from many people about various companies they have been to see. The one theme that has been the same is the fact these meetings have been very intense, all have commented it felt like when they first bought timeshare. Must have a decision on the day, it has to be today or it will be too late.

 

They have also handed over their original documents, then once home they start to have doubts about what has happened, This is when they start to look on the web, and the realisation hits them that they may just have been conned again.

sales meeting

In one case the client even tried to stop the credit card transaction the following day, but the credit card company told them they should give this particular firm a year to see if they would deliver what was promised. This in itself is totally wrong, surely if you have doubts and report it to your bank, especially the following day, they should be on your side. After all it is preventing a possible fraud. The banks do say if you think any transaction may be fraudulent contact us to stop the payment.

 

Also in all the cases the client has handed over all the original documents, this now presents a problem. How do you get them back if you have found information that makes you change your mind about the company you have just met?

 

In most cases they are gone for good, then when you do find a genuine firm you no longer have the paperwork and they can’t then do anything for you.

 

The only advice that Inside Timeshare can give is never take the originals with you, never pay anything until you are certain you are dealing with a genuine company. Also beware the “No Win No Fee” offers, they are the enticers and usually end up with a demand for some kind of payment. Any payment you do make should also be made on a Credit Card, not a bank transfer, cheque or even debit card. Using a credit card you are then protected by the Credit Consumer Act 1974 Section 75.

 

Any genuine and trustworthy company will accept your decision to go away and think about it, make a payment later and then send the documents. Also, always keep copies yourself. Just remember how you were sold timeshare in the first place, today, today, today, pressure, pressure and more pressure.

tspresent

 

Think, research and be sure before you go, then once there, think, check and be sure before committing.

 

If you need any help in researching any company that has either contacted you or you have found, Inside Timeshare is here to help. Contact using the comments section with the company details and we will be in touch by email with any information we find. Have a good weekend