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Timeshares and holiday clubs
Timeshares and holiday clubs
Started by TimeshareTalk, August 28, 2018, 08:15:53
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Timeshares and holiday clubs
August 28, 2018, 08:15:53
This guidance is for England, Scotland & Wales
If you are considering buying a timeshare, joining a holiday club, or reselling or exchanging your existing timeshare it is important that you find out what your rights are under the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010. It is also important to obtain as much information as you can about the trader and the products they are selling before you sign a contract or make a payment. There are many rogue traders operating in the timeshare industry and they can cause serious difficulties for the unwary consumer.
Please note that the information below assumes that the agreement has been signed in the UK; however, the Regulations cover the whole of the European Economic Area (EEA) so the law in other countries is likely to be similar. (The EEA countries are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.)
What is a timeshare contract?
A timeshare contract between a consumer and a trader is one where the consumer pays to use overnight accommodation (property, caravans and boats) for more than one period of occupation. The contract must last more than one year or be capable of being renewed or extended so that it lasts more than one year.
What is a long-term holiday product contract?
A long-term holiday product contract (such as membership of a holiday club) is one where a consumer pays and has the right to obtain discounts or other benefits related to accommodation. The contract must last more than one year or be capable of being renewed or extended so that it lasts more than one year.
What is a resale contract?
A resale contract is a contract between a consumer and a trader where a trader, for payment, helps a consumer to buy or sell a timeshare or a long-term holiday product.
What is an exchange contract?
An exchange contract is a contract between a consumer who has a timeshare contract and a trader where, upon payment, the consumer joins the trader's timeshare exchange system.
What should I look for before I sign the contract?
Any advertising related to timeshare or holiday club membership must include details as to how you can obtain the key information about the contract. If a trader invites you to attend a sales event, the invitation must make the commercial purpose and nature of the event clear to you so that you are not misled.
Before you enter into a contract the Regulations state that you must be given key information in good time and before the contract is made to enable you to choose whether or not to purchase the product. This information should be given to you in your chosen language. It must be accessible, clear, accurate and easy to understand. It should be provided in a standard form, in writing and free of charge.
Check timeshare contracts to see how long they last. Some contracts state that you own the timeshare permanently.
Find out how much the maintenance fees are and what arrangements are in place to pay them.
Can I withdraw from the contract?
If you sign a contract you have a 14-day cooling-off period when you can withdraw. This period runs from the date the contract is concluded or the date you receive a copy of the contract, whichever is later. The Regulations state that the contract should be in writing and include specific information, such as your right to withdraw from the contract. If the trader does not comply with the requirement to provide the standard withdrawal form or the key information, the withdrawal period can be extended. You should give written notice of withdrawal to the trader. You can use the form included in the contract for this, although you are not obliged to. You are not responsible for any costs or charges if you decide to withdraw.
Any credit agreement you signed to finance the purchase of the product is automatically terminated when you withdraw.
How do I terminate a long-term holiday product contract?
You are entitled to terminate the contract, without having to pay a penalty, by giving notice of termination to the trader within 14 days of the day you received a request to pay an instalment, other than the first instalment. This termination right does not affect any other right available to you to terminate or withdraw from the contract.
When do I have to pay?
For timeshare, long-term holiday products and exchange contracts, a trader must not ask for or take any payments (including guarantees, reservations of money on account and acknowledgement of debt) from you within the 14-day cooling-off period (or the extended cooling-off period if the trader did not provide the standard withdrawal form or the key information). To take a payment of any kind during this period is a criminal offence under the Regulations. To report an offence, contact the Citizens Advice consumer service for a referral to trading standards.
For resale contracts the trader cannot collect payment from you until the timeshare or long-term holiday product has been sold or the resale contract is ended.
What is a payment schedule for a long-term holiday product?
The Regulations specify how a payment schedule should be set out by a trader. Payments must be divided into yearly instalments of equal value - taking account of the length of the contract - and the schedule must be given to you. The trader must send you a request for payment at least 14 days before it is due. If a trader fails to comply, a criminal offence is committed. To report an offence, contact the Citizens Advice consumer service for a referral to trading standards.
I have been misled, what can I do?
You may be enticed into attending a presentation by the lure of a 'free' holiday, only to discover that you have been misled and the 'free' holiday has add-ons that make it expensive; you may also be restricted as to when and where you can go.
Whilst at the sales presentation you may be subjected to the hard sell, with sales techniques designed to lure you into signing a holiday club contract costing you many thousands of pounds. You may not be aware at the time, but the small print in the contract will not match up to the glossy too-good-to-be-true sales pitch you were given.
If you own a timeshare, beware of the timeshare resale scam. You may be cold-called by a trader claiming that they can market your timeshare for you for an up-front fee and if it does not sell they will buy it from you; or they will offer to buy the timeshare if you agree to buy another one or join a holiday club. The trader may inflate the value of your timeshare to encourage you to go ahead. In some cases, the trader may tell you that there is already a buyer interested in your timeshare, which usually turns out to be untrue.
The trader's motive is to get you to part with your cash or make a card payment for what turns out to be a fraudulent service.
If a trader misled you, had an aggressive sales technique or undertook any trading practice that was unfair, they may have breached the Consumer Protection from Unfair Trading Regulations 2008. To report an unfair trading practice, contact the Citizens Advice consumer service for a referral to trading standards.
If you enter a timeshare, holiday product, resale or exchange contract because a trader misled you or because the trader used an aggressive commercial practice, the Consumer Protection from Unfair Trading Regulations 2008 give you rights of redress: the right to unwind the contract, the right to a discount and the right to damages. These rights are in addition to the rights you already have under the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010. See our guide 'Misleading & aggressive practices: rights of redress' for more information.
Do I have any protection if I sign a finance agreement or pay by credit / debit card?
If you pay for the product by credit card or on finance arranged by the trader and if it costs more than £100 but less than £30,000 you are protected by the Consumer Credit Act 1974. Section 75 of the Act makes the card provider as responsible as the trader for a breach of contract or a misrepresentation. You are entitled to take action against the trader, the card provider or both. If the cost exceeds £30,000 and is less than £60,260, and the finance was arranged specifically to buy the product, you may be able to claim against the finance company under section 75A of the Consumer Credit Act 1974.
If you use a debit card to purchase the product, you may be able to take advantage of the chargeback scheme. Chargeback is the term used by card providers for reclaiming a card payment from the trader's bank. If you can provide evidence of a breach of contract - the product was not 'as described', for example - you can ask your card provider to attempt to recover the payment. Check with your card provider as to how the scheme rules apply to your card and what the time limit is for making a claim.
Where can I find more information?
If the trader is outside the UK but within the European Union you can obtain advice from the UK European Consumer Centre, which provides information and support for consumers shopping across the EU.
Consumer Credit Act 1974
Consumer Protection froreviewed/updatedegulations 2008
Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010
This information is intended for guidance; only the courts can give an authoritative interpretation of the law.
The guide's 'Key legislation' links may only show the original version of the legislation, although some amending legislation is linked to separately where it is directly related to the content of a guide.
Timeshares and holiday clubs
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