Timeshare – an Excellent Holiday Choice but be Wary of Fraudsters Targetting Owners

It has shaken off its reputation of old and with the vast majority - 87% - happy with their timeshare, rating highly the quality of accommodation and the ability to travel extensively and stay at similar resorts throughout the world, complaints today from the 1.5 million European families that own timeshare are at an all time low.

What’s more, compared with owning a second home outright, timeshare really makes sense:

• You avoid the hassle of maintaining the property and having to deal with unforeseen emergencies such as flooding or burglaries

• It does not lie empty for weeks on end, particularly during the winter months

• You are not depriving the local community of housing – it’s a socially responsible way of taking holidays

• The initial outlay for timeshare is far less than buying a property outright – the average price for a week’s timeshare in 2007 was under €10,000

• Owning timeshare over a number of years is also cheaper than renting
 

The process of buying timeshare is, today, a safe one. By law, purchasers signing a contract in the EU are protected by the European Timeshare Directive and, importantly, have the right to a minimum 10 day cooling off period during which they may cancel the agreement without penalty.

Resorts in membership of the trade body, RDO (Resort Development Organisation) sign up to a code of conduct that provides consumers with extra protection and always provide a cooling off period. RDO offers a free of charge service to members of the public who have a query or complaint about one of its members and a cost-effective dispute resolution scheme is available if the complaint is not resolved to the satisfaction of the consumer.

Warning to Owners

Holiday clubs claim to offer savings and discounts at luxurious resorts around the world but the discounts are not guaranteed and many customers have reported that the reductions are no better than those available on the high street

In recent years, timeshare owners, particularly those looking to sell, have reported that they have been contacted by unscrupulous resale companies taking significant upfront fees but failing to sell their timeshare. Others may be invited to conclude the sale of their timeshare at the company’s office but instead are persuaded to buy membership of a ‘holiday club’. Holiday clubs claim to offer savings and discounts at luxurious resorts around the world but the discounts are not guaranteed and many customers have reported that the reductions are no better than those available on the high street.

These scams are not timeshare and are condemned by the industry, which is doing all it can to stamp out deceptive and fraudulent practices, working closely with the police and enforcement agencies in both the UK and Spain.

As an owner, you are urged to be on your guard and think twice about dealing with a company if:

• You receive an unsolicited phone call - your telephone number may well have been obtained illegally as neither your resort, the exchange company nor the industry trade body, RDO, would ever give out your contact details

• You are offered an unusually high price for your week and are informed that a buyer has already been found. Timeshare is not a financial investment and if the price sounds too good to be true, it probably is! This is a common hook used to persuade owners to pay a significant upfront fee and frequently, the sale fails to take place

• Do not agree to pay a resale company an upfront registration fee. You will probably find this is non refundable and if the company fails to sell your timeshare, you will have lost the money

• Do not agree to travel to a resale company’s offices, whether in the UK or overseas (frequently Spain). There is absolutely no need to do this and you may well find that rather than selling your timeshare, you are persuaded to sign up to a holiday club

• Do not agree to post your ownership documents to a company you do not know is reputable. You may never see the paperwork again but at the same time if the sale is not finalised, you may still be liable for your annual management fees

• Do not respond to callers claiming to represent law firms which, for a fee, offer to obtain a refund/compensation for monies lost to resale companies and holiday clubs. The majority of these so called law firms are bogus.

• Beware – unlike timeshare, most resale and holiday club operators do not offer a cooling off period, so once you’ve signed a contract, you may not be able to cancel. Check the paperwork carefully and if this is not in writing, walk away. RDO members, including its resale agents, always offer a cooling off period

• Be careful of accepting invitations to join class actions as the actual claim may not exist or be quite as risk free as promised. You may also find that if you attend a meeting to discuss such an action, you are in fact being sold a holiday club

Useful web links

RDO help and advice: http://www.rdo.org/node/121

OFT warning about signing up to bogus holiday clubs: http://www.oft.gov.uk/shared_oft/consumer_leaflets/general/oft642.pdf