The law is catching up with those involved in 'Leisure Credits' and Bogus Holiday Club scams, with arrests, prison sentences and heavy financial penalties taking place.
Way back in 2013, the UK European Consumer Centre warned of a new holiday product that was set up to intentionally avoid the legislation that protects consumers in the timeshare sector. They described how holidaymakers were being promised holiday club memberships or discounts for years to come on future accommodation bookings, as well as other leisure products such as spa days, or the use of sports facilities and were being typically being charged up to £15,000 to sign up.
What was not made clear at the time was the 'double-scam' involved - the targeting of timeshare owners, lured in with false offers of anything from a part-exchange for their timeshare to purported legal services to terminate timeshare contracts and claim monies back.
The news that father and daughter Dominic and Stephanie O'Reilly, who ran the substantial EZE Group scam have been ordered to pay back over £400,000 has recently highlighted the way that legal and claims services formed an integral part of the scams taking place. The O'Reillys had previously been convicted and given prison sentences and now UK National Trading Standards has had court orders imposed on them to claw back the illegal profits they made
The Bait & Switch
As described by Trading Standards, EZE typically targeted timeshare owners, persuading them to sign up "for services they did not want or need, including services to dispose of timeshares and a 'club membership' offering discounts that didn't really exist. The presentations made false claims that victims' existing timeshares would last in perpetuity and that huge debts would be passed onto their children unless consumers signed up to EZE timeshare disposal services." Other businesses were also involved to help convince consumers of the supposed 'benefits', including closely connected travel and legal services companies. In the case of EZE, consumers were passed on to the likes of 'Everywhere Travel' - controlled by Stephanie O'Reilly and Praetorian Legal - a regulated Claims Management Company (CMC) that Dominic O'Reilly served as a director of before falling out with owner Gary Smith - the latter who also served as the EZE 'Legal & Compliance Director' and who used another company, LCM Law to pursue EZE victims for payments and threaten legal actions against consumers who publicly complained about EZE.