Wednesday, September 06, 2006
Another timeshare Scam In Court
Two more Grand Cayman timeshare operators are lawsuit defendants after cases were filed in Grand Court recently.
Morritt’s Properties Ltd., operator of Morritt’s Tortuga Club and Morritt’s Grand Resort, and Grand Caymanian Resorts Ltd, operator of The Grand Caymanian Beach Club and Resort, have both been sued by persons or entities that provided employed or managerial services.
The two cases come in the wake of the collapse of the Indies Suites timeshare operation after it sustained serious damage in Hurricane Ivan. That collapse led to a high profile legal action initiated by timeshare owners, and a subsequent call for government regulation of timeshare operations.
Leader of Government Business Kurt Tibbetts has said that the government has asked Attorney General Sam Bulgin to look into the possibilities of regulating the timeshare industry.
In the case concerning Morritt’s filed on 18 August, accountant and former employee Robert White is suing two Cayman companies, Morritt Properties (Cayman) Ltd. and Morritt’s Shopping Centre Ltd., as well as David Morritt personally.
In Mr. White’s statement of claim filed by the law firm Campbell’s, he said he agreed in writing on 1 January 2003 to act as the Chairman of the Board of Morritt Properties Cayman Ltd. and of a company called Global Resort Management Inc., which is a U.S.–based resort management company. As part of his employed duties, Mr. White was also to organise, negotiate and manage a two–phase shopping centre and apartment development in Colliers.
Global, along with Mr. Morritt and Morritt Properties Ltd, was also named in another lawsuit filed in Florida by Mr. White.
Mr. White was employed with Morritt’s/Global through December 2005, one year before his employment contract was to expire. His dismissal from the company is a matter dealt with in the Florida lawsuit.
In the action filed in Cayman, Mr. White is seeking other agreed–to benefits from the defendants, including a 7.5 per cent share in Morritt Properties (Cayman) Ltd, a 7.5 per cent beneficial interest in the real property underlying Morritt’s Shopping Centre, and 7.5 per cent of the net operating profits can capital of Morritt’s Shopping Centre.
In the other timeshare lawsuit recently filed, Thompson Resorts Ltd. and Grand Caymanian Operations Ltd. are suing Grand Caymanian Resorts Ltd. and Grand Caymanian Beach Club & Resort Ltd.
The Statement of Claim, which was filed by the law firm Walkers, seeks the sum of US$56,954 for Thompson Resorts Ltd, which was engaged as the manager and exclusive marketing agent/manager for The Grand Caymanian Beach Club and Resort from 28 April 2000 until October 2000.
The amount claimed represents alleged unpaid amounts in commissions, corporate services and out–of–pocket expenses.
Subsequently, on 16 October 2000, Grand Caymanian Operations Ltd. was engaged as the manager and exclusive marketing agent/manager of The Grand Caymanian, an arrangement which continued until December 2001.
The claim seeks the amount of US$628,959 in alleged unpaid fees for marketing, management, rental commissions, out–of–pocket expenses, sunset tours and corporate services.
Two more Grand Cayman timeshare operators are lawsuit defendants after cases were filed in Grand Court recently.
Morritt’s Properties Ltd., operator of Morritt’s Tortuga Club and Morritt’s Grand Resort, and Grand Caymanian Resorts Ltd, operator of The Grand Caymanian Beach Club and Resort, have both been sued by persons or entities that provided employed or managerial services.
The two cases come in the wake of the collapse of the Indies Suites timeshare operation after it sustained serious damage in Hurricane Ivan. That collapse led to a high profile legal action initiated by timeshare owners, and a subsequent call for government regulation of timeshare operations.
Leader of Government Business Kurt Tibbetts has said that the government has asked Attorney General Sam Bulgin to look into the possibilities of regulating the timeshare industry.
In the case concerning Morritt’s filed on 18 August, accountant and former employee Robert White is suing two Cayman companies, Morritt Properties (Cayman) Ltd. and Morritt’s Shopping Centre Ltd., as well as David Morritt personally.
In Mr. White’s statement of claim filed by the law firm Campbell’s, he said he agreed in writing on 1 January 2003 to act as the Chairman of the Board of Morritt Properties Cayman Ltd. and of a company called Global Resort Management Inc., which is a U.S.–based resort management company. As part of his employed duties, Mr. White was also to organise, negotiate and manage a two–phase shopping centre and apartment development in Colliers.
Global, along with Mr. Morritt and Morritt Properties Ltd, was also named in another lawsuit filed in Florida by Mr. White.
Mr. White was employed with Morritt’s/Global through December 2005, one year before his employment contract was to expire. His dismissal from the company is a matter dealt with in the Florida lawsuit.
In the action filed in Cayman, Mr. White is seeking other agreed–to benefits from the defendants, including a 7.5 per cent share in Morritt Properties (Cayman) Ltd, a 7.5 per cent beneficial interest in the real property underlying Morritt’s Shopping Centre, and 7.5 per cent of the net operating profits can capital of Morritt’s Shopping Centre.
In the other timeshare lawsuit recently filed, Thompson Resorts Ltd. and Grand Caymanian Operations Ltd. are suing Grand Caymanian Resorts Ltd. and Grand Caymanian Beach Club & Resort Ltd.
The Statement of Claim, which was filed by the law firm Walkers, seeks the sum of US$56,954 for Thompson Resorts Ltd, which was engaged as the manager and exclusive marketing agent/manager for The Grand Caymanian Beach Club and Resort from 28 April 2000 until October 2000.
The amount claimed represents alleged unpaid amounts in commissions, corporate services and out–of–pocket expenses.
Subsequently, on 16 October 2000, Grand Caymanian Operations Ltd. was engaged as the manager and exclusive marketing agent/manager of The Grand Caymanian, an arrangement which continued until December 2001.
The claim seeks the amount of US$628,959 in alleged unpaid fees for marketing, management, rental commissions, out–of–pocket expenses, sunset tours and corporate services.
Monday, August 28, 2006
How To Avoid A Timeshare Scam
• Timeshares offer the right to stay at a property for a set period of time and can be exchanged for time at other resorts. Often, it is deeded real estate.
• Properties require a minimum income, often $50,000 or more annually, to take a tour. Both members of the couple must attend. Tours last 90 minutes to two hours.
• A salesperson will discuss how ownership works. Some resorts sell a points-based system for flexible use, while others sell fixed or floating weeks.
• A finance manager will go over pricing options, which can be $7,000 to $25,000 or more.
• Prices do not include property taxes, club dues or fees for maintenance, reservations, housecleaning or exchanges.
• If you buy in Arizona, you may cancel within seven days of signing a contract. Other states have cooling-off periods of three to 14 days.
• Do some homework before taking a tour. Many clubs offer basics about their time shares on their Web sites.
• Ask for recommendations and check with the Better Business Bureau and the state Department of Real Estate, which regulates time shares.
• Time shares generally do not appreciate in value.
• Look for signs of good management, such as desirable amenities, friendly service and good housekeeping. Ask if the property is a member of the American Resort Development Association, which follows a code of conduct.
• Several companies, including Redweek Inc. and the Timeshare Store Inc., specialize in time-share rentals and resales.
• Renting may help you decide if a time share is the right choice. A recent online search found Arizona time shares renting for $700 to $2,400 a week.
• Some time share resorts offer discounted accommodations for those who tour the property so they can try before they buy.
• Timeshares offer the right to stay at a property for a set period of time and can be exchanged for time at other resorts. Often, it is deeded real estate.
• Properties require a minimum income, often $50,000 or more annually, to take a tour. Both members of the couple must attend. Tours last 90 minutes to two hours.
• A salesperson will discuss how ownership works. Some resorts sell a points-based system for flexible use, while others sell fixed or floating weeks.
• A finance manager will go over pricing options, which can be $7,000 to $25,000 or more.
• Prices do not include property taxes, club dues or fees for maintenance, reservations, housecleaning or exchanges.
• If you buy in Arizona, you may cancel within seven days of signing a contract. Other states have cooling-off periods of three to 14 days.
• Do some homework before taking a tour. Many clubs offer basics about their time shares on their Web sites.
• Ask for recommendations and check with the Better Business Bureau and the state Department of Real Estate, which regulates time shares.
• Time shares generally do not appreciate in value.
• Look for signs of good management, such as desirable amenities, friendly service and good housekeeping. Ask if the property is a member of the American Resort Development Association, which follows a code of conduct.
• Several companies, including Redweek Inc. and the Timeshare Store Inc., specialize in time-share rentals and resales.
• Renting may help you decide if a time share is the right choice. A recent online search found Arizona time shares renting for $700 to $2,400 a week.
• Some time share resorts offer discounted accommodations for those who tour the property so they can try before they buy.
Monday, August 14, 2006
Check Scam For Timeshare Hits Greenbelt Resident
A Greenbelt resident has recently been the victim of a counterfeit check scam, losing approximately $6,500.
The victim placed an ad on Craig’s List to list a timeshare for rent in Kissimmee, Fla.
According to the Greenbelt Police Department, the victim was contacted by the suspect via e-mail the week of July 2 through July 8, who advised that he lived in London, and was interested in renting the timeshare for himself and his family.
Greenbelt Police spokesman officer George Mathews said after several e-mail exchanges, the parties agreed on a price of $1,200 to be paid by cashier’s check. The suspect advised that his place of employment, which was allegedly paying for the trip, mistakenly wrote a cashier’s check in the amount of $6,500.
The suspect stated that it would be impossible to get the company to reissue the check in the proper amount, and asked if it would be possible for the victim to deposit the check into her account, then send back the difference.
The victim agreed and deposited the check and sent the difference back to the suspect by way of Western Union.
A few days later, the victim’s bank contacted her and advised that the suspect’s cashier’s check was counterfeit.
The suspect then contacted the victim by e-mail and advised that as they left the Western Union with the money that the victim sent to them, they were robbed by three suspects who took all of the money and stabbed his wife.
The suspect then asked the victim to return $1,000 of the $1,200 that the victim paid to the victim, telling the victim that she could keep $200 for all of her stress,” Mathews said.
The victim did not send the suspect any more money.
The Greenbelt resident finally reported the incident on July 15.
Mathews said the Greenbelt Police Department is investigating and will try to work with the Police Department in London to see what they can do.
A Greenbelt resident has recently been the victim of a counterfeit check scam, losing approximately $6,500.
The victim placed an ad on Craig’s List to list a timeshare for rent in Kissimmee, Fla.
According to the Greenbelt Police Department, the victim was contacted by the suspect via e-mail the week of July 2 through July 8, who advised that he lived in London, and was interested in renting the timeshare for himself and his family.
Greenbelt Police spokesman officer George Mathews said after several e-mail exchanges, the parties agreed on a price of $1,200 to be paid by cashier’s check. The suspect advised that his place of employment, which was allegedly paying for the trip, mistakenly wrote a cashier’s check in the amount of $6,500.
The suspect stated that it would be impossible to get the company to reissue the check in the proper amount, and asked if it would be possible for the victim to deposit the check into her account, then send back the difference.
The victim agreed and deposited the check and sent the difference back to the suspect by way of Western Union.
A few days later, the victim’s bank contacted her and advised that the suspect’s cashier’s check was counterfeit.
The suspect then contacted the victim by e-mail and advised that as they left the Western Union with the money that the victim sent to them, they were robbed by three suspects who took all of the money and stabbed his wife.
The suspect then asked the victim to return $1,000 of the $1,200 that the victim paid to the victim, telling the victim that she could keep $200 for all of her stress,” Mathews said.
The victim did not send the suspect any more money.
The Greenbelt resident finally reported the incident on July 15.
Mathews said the Greenbelt Police Department is investigating and will try to work with the Police Department in London to see what they can do.
Thursday, August 03, 2006
Destination Clubs: Understand The Risks
While the benefits of destination clubs are compelling, the industry is still in its early stages and not without its risks. With membership deposits ranging from $30,000 to $3 million, consumers must be assured that the club they’re joining is one they can enjoy for years and that they will receive the refundable portion of their deposit back if they choose to leave.
In 2006, several new startups have launched, some clubs have stalled in their growth, and an industry pioneer has declared bankruptcy. Meanwhile, leading destination clubs continue to attract members and outside capital while expanding their portfolio of homes and services.
Helium Report suggests you consider four categories of risk when evaluating destination clubs: Business, Reservation, Resignation, and Member Deposit Appreciation.
Business Risk
A sustainable business model must serve as the foundation to ensure member deposit obligations can be met at any and all times. Most clubs commit to using membership deposits to acquire real estate or to be held as a cash reserve.
Operating expenses, including sales and marketing, should be covered by the non-refundable portion of the deposit and annual dues. Many clubs raise working capital to provide them with resources to get started and to survive any downturns in membership sales.
New entrants sometimes find it difficult to grow beyond the initial “charter” members. Competition within the industry is high. We expect to see consolidation among players, which will make it even more difficult for clubs with only a few homes to attract members who are looking for diverse vacation experiences.
As evidenced by the recent bankruptcy filing of industry pioneer Tanner & Haley, destination clubs need to limit the amount of leased homes in their portfolio. Helium Report recommends at least 70-80% of the portfolio should be owned to ensure a sufficient asset base to offset member deposit liabilities.
Reservation Risk
The destination club concept is fundamentally a shared usage model. Prospective members must realize they’re unlikely to reserve the same home, for the same week, every year. In that sense, destination clubs differ greatly from owning a specific week in a timeshare or fractional residence club.
Instead, variety is one of the key features the clubs offer members. Members will have a combination of advanced reservations and last minute access options available to them, depending on the policies of each specific club. It’s important to see if there’s a balance of exotic resort destinations and nearby luxury homes you can access spontaneously.
Resignation Risk
As covered earlier, destination clubs need to have sufficient assets to ensure they can refund member deposits. Most clubs have a clause in the member agreement that requires two or three new member sales before you can resign your membership. Unlike timeshares, there is no secondary market for membership, so the club must have growth momentum in order for you to leave.
There is typically a time limit, however, which requires the club to refund you with 12-18 months. In a worst case scenario, a club is no longer delivering the service it promises, dissatisfied members ask to leave, and the club’s financial resources are severely strained.
Some clubs have included “wind-down” scenarios in their membership agreement to assure members of an orderly liquidation of assets if such a “run on the bank” occurs.
Membership Deposit Appreciation Risk
Several destination clubs promote programs that promise to share the upside of real estate appreciation. We’ve seen many variations on the program, all of which are designed to address consumer concerns that the club enjoys all of the profits of an appreciating real estate portfolio.
Helium Report remains cautiously skeptical of these deposit appreciation programs since they are relatively unproven. Most offer a refund of the “future value” of the membership deposit, which assumes fees will continue to increase over time. In contrast, industry leader Exclusive Resorts only commits to 80% of the amount you paid when joining.
The other clubs are selling against the industry leader with innovative models. For example, Private Escapes Platinum issued a several thousand dollar “club credit” to members earlier this year. Other clubs such as Crescendo and BelleHavens position themselves as equity alternatives where members participate directly as real estate investors.
While the benefits of destination clubs are compelling, the industry is still in its early stages and not without its risks. With membership deposits ranging from $30,000 to $3 million, consumers must be assured that the club they’re joining is one they can enjoy for years and that they will receive the refundable portion of their deposit back if they choose to leave.
In 2006, several new startups have launched, some clubs have stalled in their growth, and an industry pioneer has declared bankruptcy. Meanwhile, leading destination clubs continue to attract members and outside capital while expanding their portfolio of homes and services.
Helium Report suggests you consider four categories of risk when evaluating destination clubs: Business, Reservation, Resignation, and Member Deposit Appreciation.
Business Risk
A sustainable business model must serve as the foundation to ensure member deposit obligations can be met at any and all times. Most clubs commit to using membership deposits to acquire real estate or to be held as a cash reserve.
Operating expenses, including sales and marketing, should be covered by the non-refundable portion of the deposit and annual dues. Many clubs raise working capital to provide them with resources to get started and to survive any downturns in membership sales.
New entrants sometimes find it difficult to grow beyond the initial “charter” members. Competition within the industry is high. We expect to see consolidation among players, which will make it even more difficult for clubs with only a few homes to attract members who are looking for diverse vacation experiences.
As evidenced by the recent bankruptcy filing of industry pioneer Tanner & Haley, destination clubs need to limit the amount of leased homes in their portfolio. Helium Report recommends at least 70-80% of the portfolio should be owned to ensure a sufficient asset base to offset member deposit liabilities.
Reservation Risk
The destination club concept is fundamentally a shared usage model. Prospective members must realize they’re unlikely to reserve the same home, for the same week, every year. In that sense, destination clubs differ greatly from owning a specific week in a timeshare or fractional residence club.
Instead, variety is one of the key features the clubs offer members. Members will have a combination of advanced reservations and last minute access options available to them, depending on the policies of each specific club. It’s important to see if there’s a balance of exotic resort destinations and nearby luxury homes you can access spontaneously.
Resignation Risk
As covered earlier, destination clubs need to have sufficient assets to ensure they can refund member deposits. Most clubs have a clause in the member agreement that requires two or three new member sales before you can resign your membership. Unlike timeshares, there is no secondary market for membership, so the club must have growth momentum in order for you to leave.
There is typically a time limit, however, which requires the club to refund you with 12-18 months. In a worst case scenario, a club is no longer delivering the service it promises, dissatisfied members ask to leave, and the club’s financial resources are severely strained.
Some clubs have included “wind-down” scenarios in their membership agreement to assure members of an orderly liquidation of assets if such a “run on the bank” occurs.
Membership Deposit Appreciation Risk
Several destination clubs promote programs that promise to share the upside of real estate appreciation. We’ve seen many variations on the program, all of which are designed to address consumer concerns that the club enjoys all of the profits of an appreciating real estate portfolio.
Helium Report remains cautiously skeptical of these deposit appreciation programs since they are relatively unproven. Most offer a refund of the “future value” of the membership deposit, which assumes fees will continue to increase over time. In contrast, industry leader Exclusive Resorts only commits to 80% of the amount you paid when joining.
The other clubs are selling against the industry leader with innovative models. For example, Private Escapes Platinum issued a several thousand dollar “club credit” to members earlier this year. Other clubs such as Crescendo and BelleHavens position themselves as equity alternatives where members participate directly as real estate investors.
Tuesday, August 01, 2006
Marriott aims To Change Timeshare Image Of Scams
Timeshare holiday resort scams have become almost synonymous with travel scams, pesky salesmen and unfulfilled promises.
But Marriott International aims to change the unsavoury experience of timeshare holiday ownership in Asia with its new Marriott Vacation Club International (MVCI), Asia Pacific, which is headquartered here in Singapore.
In fact, the 79-year-old hospitality company — with 22 years of timeshare experience in the West — will be the first branded hotel name to enter the timeshare resort market in Asia.
"We are aware that there are some perception issues with the concept of timeshare in Asia, but we are confident that the Marriott name will help to positively change current perceptions to make timeshare more acceptable and desirable," said Mr Harold Derrah, MVCI senior vice-president and managing director at the launch on Friday.
For a start, the MVCI timeshare model is "bankruptcy proof" as the rights to the properties are placed in an independent trust, he added.
For a one-off payment starting from $14,000 and an annual fee of $276, members will get 12,000 points a year, which they exchange for hotel stays. Valid for the next 50 years, they can choose holidays such as a two- to four-night villa stay at the flagship Marriott Phuket Beach Club.
The number of Asian hotel resorts in the programme is expected to grow from the current four to 10 or 12 in the next five years.
Although the global timeshare hospitality industry has a turnover of US$10 billion ($15.8 billion) annually, its growth in Singapore has been marred by consumer unhappiness.
According to the Consumers Association of Singapore (Case), an average of 2,620 complaints were received against timeshare companies over the past two years. Since January, 1,001 complaints about pressurising sales tactics and misleading claims have been filed.
Case executive director Seah Seng Choon said: "We'd like to advise all consumers to know their rights. There is a three-day cooling off period, excluding weekends and public holidays, for consumers to rescind a timeshare contract. Consult your lawyer before making any commitment as the contract involves a large sum of money."
Timeshare holiday resort scams have become almost synonymous with travel scams, pesky salesmen and unfulfilled promises.
But Marriott International aims to change the unsavoury experience of timeshare holiday ownership in Asia with its new Marriott Vacation Club International (MVCI), Asia Pacific, which is headquartered here in Singapore.
In fact, the 79-year-old hospitality company — with 22 years of timeshare experience in the West — will be the first branded hotel name to enter the timeshare resort market in Asia.
"We are aware that there are some perception issues with the concept of timeshare in Asia, but we are confident that the Marriott name will help to positively change current perceptions to make timeshare more acceptable and desirable," said Mr Harold Derrah, MVCI senior vice-president and managing director at the launch on Friday.
For a start, the MVCI timeshare model is "bankruptcy proof" as the rights to the properties are placed in an independent trust, he added.
For a one-off payment starting from $14,000 and an annual fee of $276, members will get 12,000 points a year, which they exchange for hotel stays. Valid for the next 50 years, they can choose holidays such as a two- to four-night villa stay at the flagship Marriott Phuket Beach Club.
The number of Asian hotel resorts in the programme is expected to grow from the current four to 10 or 12 in the next five years.
Although the global timeshare hospitality industry has a turnover of US$10 billion ($15.8 billion) annually, its growth in Singapore has been marred by consumer unhappiness.
According to the Consumers Association of Singapore (Case), an average of 2,620 complaints were received against timeshare companies over the past two years. Since January, 1,001 complaints about pressurising sales tactics and misleading claims have been filed.
Case executive director Seah Seng Choon said: "We'd like to advise all consumers to know their rights. There is a three-day cooling off period, excluding weekends and public holidays, for consumers to rescind a timeshare contract. Consult your lawyer before making any commitment as the contract involves a large sum of money."
Friday, July 21, 2006
Tips On Staying Out Of Timeshare Scams
Advisers with Middle America Planning, a fee-only financial-planning firm in Mount Lebanon, Pa., offer the following tips if you’re thinking about buying a timeshare in a vacation destination:
• Do not consider timeshares a financial investment. They are a method for buying future vacations.
• Never purchase a timeshare without having a lawyer review the contract.
• Resist high-pressure sales tactics and free gifts that entice you to sign on the spot.
• Never purchase a timeshare without first visiting the property. Look for signs of good property management.
• Make sure the time share is associated with an exchange company if you want to trade in your timeshare.
• Make sure the timeshare will meet your needs 10 or 20 years down the road as the vacation needs of your family evolve.
• Understand that maintenance fees may increase over time.
Follow these guidelines for a Timeshare scam free purchase.
Advisers with Middle America Planning, a fee-only financial-planning firm in Mount Lebanon, Pa., offer the following tips if you’re thinking about buying a timeshare in a vacation destination:
• Do not consider timeshares a financial investment. They are a method for buying future vacations.
• Never purchase a timeshare without having a lawyer review the contract.
• Resist high-pressure sales tactics and free gifts that entice you to sign on the spot.
• Never purchase a timeshare without first visiting the property. Look for signs of good property management.
• Make sure the time share is associated with an exchange company if you want to trade in your timeshare.
• Make sure the timeshare will meet your needs 10 or 20 years down the road as the vacation needs of your family evolve.
• Understand that maintenance fees may increase over time.
Follow these guidelines for a Timeshare scam free purchase.
Thursday, July 20, 2006
EU Plans Legislation To Thwart Timeshare Scams
THE EUROPEAN Commission was yesterday looking at ways of improving legislation so that European consumers are not scammed into signing away thousands of pounds to buy into timeshare holidays that are not what they appear.
The Health and Consumer Protection Directorate-General (DG SANCO) yesterday held an all-day stakeholder workshop on the revision of the Timeshare Directive (94/47/EC).
The meeting followed the launch of a nine-week public consultation on the Directive on June 1, which aims to identify gaps in the legislation’s scope.
The purpose of the workshop in Brussels was to collect key stakeholders’ and Member States’ views on the current state of play in the market for timeshare and other long-term holiday products, with a view to identifying regulatory needs, and improving market outcomes for consumers and businesses.
The workshop provided a forum for Member States, industry, consumer associations, academics and the European Parliament to exchange views on issues including new ‘timeshare-like’ products and travel discount clubs on the market, the ‘cooling-off’ period and the scope for any future extension of the legislation.
The Commission will take the results of the workshop and consultation into account when examining any potential extension of the legislation.
On June 1 the Commission launched a wide public consultation on the Timeshare Directive (94/47/EC). Timeshare contracts entitle consumers to spend a period of time (at least one week) in a holiday property for at least three years. The Timeshare Directive sets minimum standards for consumer protection throughout the EU, such as ensuring that consumers receive adequate information on the property.
The legislation also seeks to prevent “pressure selling” by allowing for a cooling-off period where withdrawal is possible and money deposits are not allowed. However, some operators have introduced new timeshare-like products which take advantage of regulatory loopholes, leading to a number of complaints by consumers.
“Consumers should have every confidence that they will not be taken for a ride if they opt for a timeshare formula or similar products” Health and Consumer Protection Commissioner Markos Kyprianou said.
“I want to make sure that unscrupulous traders do not take advantage of potential clients – many of whom sign up to these products after falling in love with a holiday resort.”
Since the Timeshare Directive was adopted in 1994, a number of new products have come onto the market, such as contracts which are similar to timeshare, but where the contract is for 35 months (so-called “timeshare-like products”).
Other new products include “travel discount clubs”, whereby consumers pay a membership fee – sometimes as much as 20,000 euros – to access a booking site promising discounted air tickets and accommodation. However, some consumers are finding that the accommodation does not reach the standards promised. These new products fall outside the scope of the Directive and allow some operators to take advantage of regulatory loopholes.
The nine-week consultation is being launched along with a discussion paper, which explores a series of timeshare-related scams – identified in close cooperation with key industry and consumer groups. These mainly concern the scope of the timeshare legislation, including issues such as re-sale and exchange of timeshares. Other issues addressed include information requirements, professional and financial requirements of operators, systems of arbitration and redress, and criminal sanctions for infringements.
The Timeshare Directive is one of the eight directives which are encompassed by the review of the consumer acquis, which is currently being undertaken by the Commission. Cross-cutting issues will be examined in a horizontal context. However, some of the problems related to timeshare and certain other holiday products require more urgent action. This is why the Commission has decided to launch a separate consultation on the review of the Timeshare Directive.
On the basis of the outcome of the consultation, the Commission will come forward with proposals to address any existing gaps.
The purpose of this paper is to launch a wide public consultation on the scope and nature of the problem of timeshare scams and elicit stakeholders’ views as to possible solutions. If the findings of the consultation and meeting confirm the need for a revision of the directive the Commission will adopt a legislative proposal updating the directive towards the end of the year.
THE EUROPEAN Commission was yesterday looking at ways of improving legislation so that European consumers are not scammed into signing away thousands of pounds to buy into timeshare holidays that are not what they appear.
The Health and Consumer Protection Directorate-General (DG SANCO) yesterday held an all-day stakeholder workshop on the revision of the Timeshare Directive (94/47/EC).
The meeting followed the launch of a nine-week public consultation on the Directive on June 1, which aims to identify gaps in the legislation’s scope.
The purpose of the workshop in Brussels was to collect key stakeholders’ and Member States’ views on the current state of play in the market for timeshare and other long-term holiday products, with a view to identifying regulatory needs, and improving market outcomes for consumers and businesses.
The workshop provided a forum for Member States, industry, consumer associations, academics and the European Parliament to exchange views on issues including new ‘timeshare-like’ products and travel discount clubs on the market, the ‘cooling-off’ period and the scope for any future extension of the legislation.
The Commission will take the results of the workshop and consultation into account when examining any potential extension of the legislation.
On June 1 the Commission launched a wide public consultation on the Timeshare Directive (94/47/EC). Timeshare contracts entitle consumers to spend a period of time (at least one week) in a holiday property for at least three years. The Timeshare Directive sets minimum standards for consumer protection throughout the EU, such as ensuring that consumers receive adequate information on the property.
The legislation also seeks to prevent “pressure selling” by allowing for a cooling-off period where withdrawal is possible and money deposits are not allowed. However, some operators have introduced new timeshare-like products which take advantage of regulatory loopholes, leading to a number of complaints by consumers.
“Consumers should have every confidence that they will not be taken for a ride if they opt for a timeshare formula or similar products” Health and Consumer Protection Commissioner Markos Kyprianou said.
“I want to make sure that unscrupulous traders do not take advantage of potential clients – many of whom sign up to these products after falling in love with a holiday resort.”
Since the Timeshare Directive was adopted in 1994, a number of new products have come onto the market, such as contracts which are similar to timeshare, but where the contract is for 35 months (so-called “timeshare-like products”).
Other new products include “travel discount clubs”, whereby consumers pay a membership fee – sometimes as much as 20,000 euros – to access a booking site promising discounted air tickets and accommodation. However, some consumers are finding that the accommodation does not reach the standards promised. These new products fall outside the scope of the Directive and allow some operators to take advantage of regulatory loopholes.
The nine-week consultation is being launched along with a discussion paper, which explores a series of timeshare-related scams – identified in close cooperation with key industry and consumer groups. These mainly concern the scope of the timeshare legislation, including issues such as re-sale and exchange of timeshares. Other issues addressed include information requirements, professional and financial requirements of operators, systems of arbitration and redress, and criminal sanctions for infringements.
The Timeshare Directive is one of the eight directives which are encompassed by the review of the consumer acquis, which is currently being undertaken by the Commission. Cross-cutting issues will be examined in a horizontal context. However, some of the problems related to timeshare and certain other holiday products require more urgent action. This is why the Commission has decided to launch a separate consultation on the review of the Timeshare Directive.
On the basis of the outcome of the consultation, the Commission will come forward with proposals to address any existing gaps.
The purpose of this paper is to launch a wide public consultation on the scope and nature of the problem of timeshare scams and elicit stakeholders’ views as to possible solutions. If the findings of the consultation and meeting confirm the need for a revision of the directive the Commission will adopt a legislative proposal updating the directive towards the end of the year.
