Timeshare and holiday clubs targeted in EU rulingConsumers to get protection from timeshare scams

24 October 2008

selling holiday clubs

What you need to know about holiday clubs

Consumers should be better protected from high-pressure sales presentations for holiday clubs after European Parliament MEPs voted to overhaul timeshare law and give holidaymakers more rights when being sold timeshare and other long-term holiday products.

Under the current EU-wide directive, consumers get some protection.

  • Buyers have the right to information in a prospectus before signing a contract.
  • They also have a cooling-off period (right of withdrawal) of at least 10 days. 
  • Operators are banned from taking deposits from buyers during the cooling-off period.

Timeshare loopholes

Traders, however, who found loopholes in this directive have since set up new ‘long-term holiday products’ that fall outside the rules. These include timeshare trials of less than three years, and holiday clubs – where customers pay a lump sum for membership to a website club that should offer discounted flights and accommodation.

Consumers who buy long-term holiday products don’t get the same rights such as a cooling-off period, and it is estimated that 400,000 Britons lose around £1.2 billion annually to bogus holiday clubs.

The new directive, which still needs to be rubber-stamped by the Council of Ministers, will mean that long-term holiday products - as well as re-sale and exchange schemes, and timeshare on boats, caravans and cruise ships - will also be covered by rules on cooling-off periods, deposits and consumer information. MEPs also voted to extend the cooling-off period granted to buyers after signing a timeshare contract from 10 to 14 days and to enable buyers of holiday clubs to pay in yearly instalments rather than a lump sum up-front.

Which? Holiday comment

Which? Holiday’s senior researcher Jonathan Mitcham said: 'For far too long, dubious companies have been able to pressurise thousands of consumers into signing away vast sums of money for a long-term holiday product they don’t really want.

'Which? lobbied for these new rights, and we are pleased that many of our recommendations have been adopted. We would have liked to see the cooling-off period extended to a month, as 14 days may not be long enough for holidaymakers who get targeted on the first day of a fortnight away. We also believe that better enforcement of the law will be crucial so that companies which employ illegal, heavy-handed selling techniques are punished.'

It is unlikely that the Directive will become law before 2010, so until then, these loopholes may continue to be exploited and there might even be an increase in companies selling holiday club memberships and timeshare trials of less than three years.

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