Holiday scams Timeshares and holiday clubs
Timeshare legislation
Buying a timeshare means you purchase an identifiable period (eg a certain week of the year) within a pool of accommodation for a number of years. Ownership rights are confirmed by a real estate register or trustee and can be passed on or sold.
The Timeshare Directive 1994 only governed timeshare products that ran for three years or more. New legislation, which came into force in February 2011 by the European Commission extends the law to include holiday clubs and other long-term holiday products. The changes mean:
- A consumer now has a 14 day cooling off period during which they can withdraw from the contract without any penalty.
- The seller cannot ask for, or accept, any money from the consumer during the cooling off period.
- The seller must provide written information in the consumer's preferred language setting out information about the timeshare or holiday club.
- The customer must receive written notice of the right to cancel the contract and a cancellation form.
Timeshare resale scams
Which? has received a multitude of letters and emails complaining about companies who have promised to sell on their timeshare.
The unfortunate reality is a timeshare is not a financial or property investment, although it is often sold as such. It’s therefore unlikely that when you sell, you will receive an amount similar to what you paid. If you’re offered an unrealistically high sum, beware. Unless you own peak-time weeks at a popular resort a timeshare probably won’t retain its value.
The scam techniques to watch out for:
'We have a buyer!'
A company calls you out of the blue and says they have a buyer lined up for your timeshare. The buyer is so keen that they are willing to pay a very generous price. The person on the phone appears to know all about your property, what weeks you own and how long you’ve been trying to sell, insisting they obtained your details from your timeshare company or some other legitimate source. All you need to do next is pay a fee upfront which is refundable once the sale is complete. They take your credit card details and you never hear from them again.
'Come to our presentation'
You are invited to attend a presentation under the pretence that the company will sell your timeshare for you. Sometimes you are told you must attend the presentation in order to meet buyers wishing to purchase your timeshare or that the offer being made is conditional upon you attending the presentation. Whatever you are told, typically the presentation turns into a high pressure sales pitch in which the company tries to sell you one of its own timeshare products. Often you will be told that if you sign up to the company's 'superior' product, they will take your old timeshare off your hands and sell it. This rarely happens and you end up with two timeshare products and with the responsibility of paying for two sets of annual maintenance fees, neither of which you want.
'The cash-back scheme'
You’re approached by a company, usually inviting you to attend a presentation, telling you that if you buy their timeshare product you will receive a cash-back certificate. At a date in the future (usually several years from the date of the presentation), you will be able to cash in the certificate and get all your money back. But there is a catch. Invariably, the conditions attached to cashing in your certificate are so prohibitive that it's unlikely you will ever be able to successfully claim any money back.
'Soliciting solicitors'
So, you've been caught out by a resale company and have parted with hundreds of pounds. Now you can no longer get in touch with them and they're not answering your calls. Enter the seemingly sympathetic 'solicitor'. You receive a phone call from someone claiming to be a solicitor who describes what has happened to you, telling you that many others have fallen into the same trap and that he is currently working on a class action lawsuit to retrieve these monies. The only catch is that you have to pay a fee. This usually isn't as much as the amount paid to the resale company, but it's significant nonetheless – typically upwards of £200. Usually these fake 'solicitors' are based in Spain or the Canary Islands; they take your money and you never hear from them again.
Holiday clubs
Holiday clubs differ fundamentally from timeshare in one basic way – buying into a holiday club means you have simply bought the chance to buy 'discounted' accommodation, flights and car hire from a particular company. You haven't bought a tangible product. No ownership or rights come with a holiday club.
Most holiday clubs do not own any properties. Quite often you are simply given a password to a website offering flights, accommodation and car hire. According to the Office of Fair Trading prices offered by these clubs are typically no less than those on the high street or internet, often meaning you have paid a membership fee for nothing.
Tips
- To avoid temptation, don't take your credit card or debit card to any timeshare or holiday club presentation.
- Ensure you get a full written description of the product, all fees, legal rights and obligations.
- Make sure you know the company’s address and take notes of what is said if possible.
Read more in our guide to buying property abroad.
