UK holiday-makers fall victim to fresh schemes since introduction of new Timeshare Directive

UK holiday-makers fall victim to fresh schemes since introduction of new Timeshare Directive

Study of complaint figures conducted to mark National Consumer Week 2012

UK consumers are falling victim to 'questionable tactics' by traders attempting to get around the new Timeshare Directive (2008/122/EC) introduced across the EU in 2011 to enhance consumer protection surrounding timeshares and holiday products.


Complaints to the UK European Consumer Centre (UK ECC) which fit into the 'other-related propositions' category of timeshare and holiday clubs have increased by six per cent in the 20 months since the Directive was introduced in many EU countries in early 2011. A handful of countries were slow to transpose it into national law – the last country being Spain in March 2012.


Loyalty cards, cashback schemes and the emergence of legal services offering to recover consumers' money from timeshare and holiday club deals which have gone sour are the new order of the day, although of course sometimes these do work for consumers.


A study of complaint figures covering the timeshare and holiday club arena was conducted by the UK ECC as one of the sponsors of next week's National Consumer Week 2012, to be launched by the Trading Standards Institute on 12 November.


Sonia Payne, Acting UK ECC Director, said: "Our message to cold callers – whether on the doorstep or on the phone – is clear and blunt: NO. National Consumer Week 2012 will seek to give consumers the confidence to say no to cold callers."


Two of the key messages are:

•    Never deal with cold callers – they could be anyone.

•    No means no!


Complaints about timeshare and related/similar products (which includes discount holiday clubs, timeshares and the resale of both) reduced by 17% in the 20 months after the Directive compared with the 20 months beforehand, but it was the category involving complaints about cashbacks, loyalty cards and legal services which saw a 6% rise over the same period.


Sonia said: “An analysis of our figures shows that the picture is not at all straightforward, showing that the market is complex. Timeshares and holiday clubs are virtually impossible to sell and often people are saddled with properties or holiday club deals they can no longer afford, particularly if there are regular maintenance fees to pay. If consumers have fallen for a scheme once, they are more likely to be targeted again.


"All EU countries have now implemented the new Timeshare Directive (2008/122/EC) giving more consumers protection than before. The overriding aim of the regulations was to enhance consumer protection by extending the scope of the previous rules to include new products which emerged onto the market after the original Directive in 1994. The Directive created a simplified and coherent framework for the regulation of timeshare and long-term holiday products, as well as exchange and resale.


“The new rules created a level playing field across Europe in the market for timeshare and certain other holiday-related products. The rules were designed to mean that the best possible protection would be in place for consumers in the modern holiday market, and that rogue traders would no longer be able to exploit loopholes in the law."


But she added: "But as time has gone on, traders have adapted new schemes to part honest UK consumers from their hard-earned money in the timeshare and holiday club market. However, although this Directive is clearly working to some extent in that the number of complaints and dispute about timeshare and related/similar products overall has fallen, there is a trend towards 'questionable tactics' in the areas of cashback schemes, loyalty card and legal services.


"In these financially challenging times, consumers are more likely to grasp at straws in order to recover some of the money they've already lost in deals that have gone sour. We would urge consumers not to be drawn into such schemes."


Cashback schemes are when consumers are promised cashback after a specified period from a separate cashback company as an incentive when buying timeshare or holiday club products (usually the same fee they've paid for their original product). This can go wrong for a number of reasons, especially if the redemption instructions are not followed to the letter.


Loyalty cards are essentially membership holiday clubs which consumers are lured in to with the promise of a free or cheap holiday. But rather than a one-off holiday, the trader's confirmation letter ties the consumer into a contract which almost always involves a fee and means that the consumer has to book their holiday as a club member (according to the membership scheme’s terms and conditions).


Legal services in the timeshare or holiday club market can mean that the consumer is cold called from a trader saying that they have access to a fund for people who need to sell their timeshare/holiday club product. The consumer is told that the fund has been set up usually by the Spanish government but that the UK consumer must pay a tax before the money is released because they do not live in Spain. The consumer pays the fee, but never sees his or her refund.

 

If UK consumers find themselves in dispute with a trader based in a European country outside the UK, they can contact the UK ECC – our advisers will assist consumers in the attempt to resolve the complaint. Consumers can make contact with the UK European Consumer Centre via the website – www.ukecc.net – or by phone on 08456 04 05 03 weekdays between 10am and 3pm.


***ENDS***

Notes to Editors


New Timeshare Directive (2008/122/EC)


Under the new Timeshare Directive (2008/122/EC) consumers across the UK were set to benefit from greater protection when buying and reselling timeshare holidays, or timeshare-like holidays on cruise boats, canal boats, caravans and "discount holiday clubs". The new Regulations extended the scope of previous rules to cover:

•    long-term holiday products (i.e. holiday clubs)

•    shorter term contracts - all purchases for a period of one year or more including tacit renewal of shorter periods

•    all forms of holiday accommodation (including boats and other moveable property such as caravans or cruise ships)

•    resale of timeshare or holiday club memberships by consumers

•    exchange services (i.e. some timeshare owners pay an extra fee to join an exchange club, where they can swap their week in, say, the Canaries for a week in another location).

Until the introduction of the new Directive, consumers who bought new timeshare and discount holiday club related products  developed since the adoption of the original Directive did not get the same rights or levels of protection as those who bought more conventional timeshare products. Examples were: consumers using different kinds of property (e.g. cruise boats, caravans or canal boats), or contracts which lasted for less than three years. Re-sale and exchange of timeshare schemes had also not been covered.

The change in rules meant that UK consumers who buy any of these products now get the same rights or levels of protection as those buying the more conventional timeshare products. Essentially, these consumers now also have a 14-day cooling-off period.


UK European Consumer Centre - 08456 04 05 03


•    For further information please contact UK European Consumer Centre’s press office on 08456 08 96 06 or ecc@tsi.org.uk


•    The UK European Consumer Centre is part of the European Consumer Centre Network (ECC-Net). There are 29 centres covering Europe, plus Iceland and Norway. The aim of the network is to provide advice and support to consumers who have a dispute with a trader based in a European country outside the UK. The Network will assist consumers in the attempt to resolve the complaint.


•    UK ECC can provide advice in the following main areas: buying goods and services, online shopping, internet auctions, holidays, timeshare and holiday clubs, air travel.


•    UK ECC is co-funded by the Department for Business, Innovation and Skills (BIS), and the European Commission. The UK ECC service is delivered by the Trading Standards Institute (www.tsi.org.uk)


•    The UK ECC provides advice and support to consumers who have a dispute with a trader based in a European country outside the UK and will assist consumers in the attempt to resolve the complaint.


•    Consumers can make contact with the UK European Consumer Centre via the website – www.ukecc.net – or by phone on 08456 04 05 03 weekdays between 10am and 3pm.


•    If in doubt before you buy, contact our sister organisation – the European Consumer Centre for Services – for                        pre-purchasing advice: www.ukecc-services.net