Timeshare & Claims Using the Credit Consumer Act 1974

Inside Timeshare is constantly receiving enquiries from owners regarding calls they have received stating they have a claim against their timeshare but have to cancel their contract first. Many of these enquiries do have a claim using the Spanish legal system and timeshare laws, but they are told they need to cancel the contract first. So how do these “claims” companies intend to make a claim?

If you purchased in Spain after 5 January 1999 and your contract is in perpetuity or more than the 50 years allowed by law, then the contract can be declared illegal and “null & void” by a Spanish court. This is also the case for the points and floating weeks systems and also the paying of any money during the statutory 14 days cooling-off period.

The contract must be “live” with all maintenance fees paid to date, end the contract and the courts are unlikely to accept the case. Maintenance arrears will put you the owner/member in breach of contract. The timeshare company will use this to have the court reject the case, even if the court does accept the case, then the chances are you are going to lose.

For those who did not purchase in Spain or have had their contracts cancelled, the question is how can you claim “compensation” for mis-sold timeshare?

Many of our readers are being told by the “claims companies” they will seek “compensation” from the timeshare company or resort. As we have seen with the legal cases published on a regular basis, the timeshare companies are not going to pay out “compensation” voluntarily or even admit they missold the timeshare, after all, they delay or try to avoid paying on awards ordered by the court.

What many have been told is they can claim through their credit card using Section 75 of the Credit Consumer Act 1974, if they paid a deposit using their card. But what does Section 75 actually cover?

Basically the main points covered are faulty goods or unfit for purpose, the goods ordered are never delivered and the company providing the goods or services has gone bust. For a full and simple explanation, Inside Timeshare usually refers readers to the Martin Lewis website Money Saving Expert.

https://www.moneysavingexpert.com/reclaim/section75-protect-your-purchases/

In the case of timeshare, many of these “claims” companies cite “mis-sold”, but what constitutes “mis-sold”?

In a nutshell, it means that you were told “porkies” by the sales representative, for example, you are purchasing property, it will go up in value, you will get massive discounts on flights, car hire etc. None of these points are in the contract that you sign, they are embellishments by the sales reps to entice you into purchasing there and then.

As we have seen in the past from our “Letter from America” series, Diamond Resorts have always insisted that they are not responsible for what the sales reps tell you during the presentation. Yes, we do agree that what they have done is miss-inform you of the facts, but just try and prove this. It’s a case of “he says she says”!

Goods received or not fit for purpose, well you have received the goods, you own the week or the points and they are available for use. So we can rule that out.

The company goes into liquidation, we are seeing this right now with Azure Resorts, they are in the process of going into liquidation, but members will still be able to use their timeshare. The hotel where these memberships are based have assured members that they are safe, a new “management company” has been set up to run the “club”. So again that is ruled out.

What about you have never used your timeshare?

When you make a claim against your card provider using Section 75, the card provider always contacts the company which is subject to the complaint. Just because you have not used it does not mean they have not provided you with the goods or services paid for. After all, they will claim it was there for you to use, you just didn’t use it.

What about availability?

You may not have had the dates you actually wanted, again the resort will just say you were offered alternative dates.

There is also a six-year time limit set by the card providers to make a claim, most if not all timeshare owners will have purchased well before this. So again the card provider will reject the claim.

So we can say that Section 75 is virtually ruled out.

Many people purchased using a finance agreement brokered by the timeshare sales reps, this is another matter. Under the same legislation, there are Sections 140a & 140b, basically, this covers “unfair relationship”.

As we all know, timeshare is not cheap, most ordinary people would find they could not afford to pay in full. The sales reps then have the tool of offering “finance” to ensure the sale is completed.

We also know that the usual “credit” checks are not made, the finance application is filled in by the sales staff and it is on the word of the purchaser that they can afford the repayments. Unlike when you go to your bank or apply for any finance, you would usually be required to submit an official income v expenditure report. Inside Timeshare has never known one of these to be done, in fact, Shawbrook Bank announced in June 2016 “irregularities” in their timeshare loan applications process for timeshare sales. They had not completed their “due diligence” and had to set aside £9 million to offset and cover any defaults in these loans. The CEO at the time had to resign. The Inside Timeshare article is below.

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

Using Sections 140a & 140b will also require the services of a lawyer who is competent in this field, it will also usually need to be taken to court. This is going to incur legal fees, even if the “claims” company states they operate on a “no win no fee” basis (this is usually their success fee), so someone has to pay the lawyers!

Below is the link which explains Sections 140a & 140b.

https://www.legislation.gov.uk/ukpga/1974/39/section/140A

So once again we ask the question, how is the “compensation” claim going to be made?

Is it just hot air to get you to pay a cancellation fee?

We leave you the reader to decide, below are two articles which explain legal claims through the Spanish courts and what constitutes an “illegal” contract for those whose purchases or upgrades were made in Spain after 5 January 1999.

https://insidetimeshare.com/http-insidetimeshare-com-p5124/

https://insidetimeshare.com/do-i-have-a-claim-in-the-spanish-courts/

Please use our contact page if you have any questions or comments on this subject. If you would like to know if you do have a valid and viable claim for any Spanish purchased timeshare please do get in touch and Inside Timeshare will get back to you.


One Comments

  • angela brown

    October 29, 2020

    we have a timeshare with c l c date of purchase 22-10-02 and 27 10 03. This was on a points system. we were pressured on both occasions to buy .

    we have tried to claim our money back through another solicitors. We were asked to pay £3800. up front , only to be told 6 months later that they couldnt do anything for us, due to c l c coming under financial difficulties.
    Needless to say we are rather fed up. now we are being inundated with phone calls from companies that are saying that they can get us our money back. a bit confused .com

    Reply

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