Guardian: Timeshare law to be strengthened to close holiday club loophole
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- Holidaymakers spend up to £15,000 on bogus offers
- New laws do not come into effect until 2010
Rebecca Smithers, consumer affairs correspondent,
The Guardian
Friday June 8 2007
Plans to stamp out holiday clubs - a burgeoning variation on timeshare
scams which has left hundreds of thousands of British holidaymakers
out of pocket - were unveiled by the European Commission yesterday.
People are enticed to spend up to £15,000 joining the clubs by offers
of the right to buy a property and promises of cheap accommodation and
travel. Buyers soon discover they have no guarantee on dates or
quality of accommodation, and are committed to an annual subscription
fee even if they do not take a holiday.
Investors are targeted through telemarketing or approached on holiday.
"Free" holidays and winning scratchcards are also used to lure them to
sales presentations where they are pressed to sign up.
British residents account for over half of all owners of timeshare
units in Europe and the Office of Fair Trading estimates that as many
as 400,000 have lost an average £3,000 each to holiday club scams.
Holiday clubs get round timeshare laws because membership is not
linked to any particular property, leaving consumers unprotected. The
proposals will extend existing protection to cover holiday clubs as
well as timeshare accommodation in cruise boats and timeshare resale
and exchange schemes, which also generate a high volume of consumer
complaints. The safety net was welcomed by the Department of Trade and
Industry, which has been pressing for the existing 13-year old EU
timeshare directive to be updated.
However, the DTI warned that the rules would not come into force until
2010. The department said: "Until then, our advice is for consumers to
be very wary of holiday clubs. Don't sign up during a presentation,
don't part with any money or credit card details until you have had
time to think things over. If you are told this is a once in a
lifetime offer, don't believe it."
The proposals include: a ban on holiday clubs taking money upfront; a
14-day cooling-off period; information setting out what club
membership involves, and who their contract is with. This must all be
included in their contract.