How to cancel the acquisition of a timeshare or holiday clubs and get your money back.
signed before 23 February 2011
signed in an EU country that had NOT implemented the new Timeshare Directive on the date that you bought (check implementation dates)
signed in a country outside the EU
PLEASE CONTACT US AT THE TIMESHARE CONSUMERS ASSOCIATION
Continue reading the following advice as you, the consumer, are protected by the The Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 and their equivalents in other EU countries.
A Quick Guide
You are entitled to cancel the acquisition of a timeshare or holiday club within 14 days of signing.
If you are cancelling an acquisition which included a ‘parallel’ or ‘linked’ loan then it is ESSENTIAL you also separately cancel the loan with the lending institution.
The cancellation MUST be:
- In writing. A Recorded Delivery letter is strongly recommended although an Email will suffice. Do not attempt to hand deliver the cancellation or proffer the cancellation verbally.
- Put in the post not later than day 14 – Day 1 is the day you signed.
You do not need to give a reason for the cancellation. Simply say “We are cancelling agreement number xxxxx signed on xxxx date” is sufficient.
In the alternative, you can use the pro-forma cancellation notice (note the law requires you have to been given the pro-forma cancellation notice with your contract). It is advised, this notice is sent by Recorded Delivery.
If you have not been given a pro-forma cancellation notice then the cancellation period extends to one year and 14 days.
If you paid any money (which is illegal), then you should demand that this be returned to you “forthwith”.
If you have any nagging doubts about WHAT you have acquired, please read a full summary of the Timeshare Regulations.
If you encounter any problems making a quit or cancellation please contact us
Please read ALL this page before proceeding with action, many situations are complex.
1. Your rights
1a. Other Rights under UK laws
In addition to the rights you have under the Timeshare Regulations 2010 described above you probably have other rights under UK laws.
If the sale of your timeshare took place away from the sellers business premises (i.e. in a hotel, leisure centre, golf club etc. or your own home), then a consumer will have a 7 day cooling off period granted by the “Doorstep” Regulations (amended 1 October 2008). If so, a consumer must be given written notice of this right (and a pro-forma cancellation). Failure on behalf of the seller to give this notice renders the agreement void. This right also applies to consumers who are courted from the street to a sales presentation on business premises in all Spanish countries.
Distance Selling Regulations
If the sale took place on the telephone or remotely, a consumer is entitled to a 7 working day cancellation period under the ‘Distance Selling’ regulations. If you paid any money, it should be returned to you if you write (recorded delivery) to cancel. Replaced in 2014 by The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
Trade Body ‘Code of Ethics’
- The trade body, Resort Development Organisation (RDO) require all their members (and agents of their members) to comply with a Code of Ethics which includes requirements to;
- Comply with all relevant laws;
- Disclose in a prompt manner on the acquisition agreement which the purchaser has a minimum of a 14 day cooling off period;
- Conduct their business “with integrity and honesty, further, in a manner that will uphold the credibility, positive reputation and goodwill of the timeshare industry and the RDO” and
- Many RDO members fail to disclose their membership, or trade under a different name than that registered with RDO, it is often impossible to establish whether or not a trader is a member of RDO. However the three leading trustees are members as are RCI so any purchase agreement involving a trustee and/or RCI would be covered by the RDO Code of Ethics.
Our advice is to therefore register your complaint with RDO in every case. If RDO admits the “complained of” trader is a member then please contact us for details of how to deal with RDO.
1b. Purchase in non-EU countries
Each non-EU country has different but similar laws, those seeking to join the EU generally comply with the laws for the purchases in EU countries. Ask TCA about any updated information.
1c. Rights under contract
In addition to whatever rights of cancellation you have under statute law, you may also be given rights by the seller in the contract. However, Consumers should be certain that these rights afforded are in writing and unambiguous. If you have any doubt about the wording check with a solicitor (or with TCA).
2. How to cancel outside a cooling off period
In law, you possibly may not have a right to cancel an agreement after the end of a cooling off period (if a cooling off period existed in the first place). The seller may have a right to take you to court to compel you to complete the contract.
The main defences to a court action are, and subject to confirmation by your legal advisors appear to be:
- the contract is invalid and void in law. You, the consumer, will need to exhibit the agreement to a solicitor to establish whether the actual contract is valid or not;
- you were given information which was false (misrepresentation). This information, you honestly relied upon which, if you had known the truth, you would not have signed the agreement – ‘misrepresentation’.
It is the general position for sellers to threaten legal action if you cancel outside a cooling off period. History tells us that the TCA have no knowledge of any action being taken by non-UK based companies and of very few actions having been taken by UK based companies against purchasers who cancelled outside a cooling off period.
In the event, the seller communicates with the consumer, any and all correspondence received should be responded to in full. To ignore such correspondence, in the confines of a dispute, could prove disadvantageous at a later stage. That said, if the seller merely repeats a position then the consumer should acknowledge the letter and refer the seller to previous correspondence. In the event the seller chooses to engage the services of a solicitor or debt collector, the consumer should consult their own solicitor.
Make comprehensive notes of everything that you were told at the presentation. You may need to rely upon the pre-contractual representations at a later stage.
If you acquired from an RDO member who failed to provide (or disclose) a 14 day cooling off period, then please contact us.
3. Getting your money back
3a Under the Credit Card Companies’ voluntary ‘charge back’ code
Irrespective of your statutory rights of cancellation, card companies operating VISA or Master card will charge back your deposit in the following circumstances:
if you signed an agreement to acquire a timeshare or holiday or travel club membership – in any country
you discharged the payment by a personal card (Master card, or VISA).
you can disclose evidence of terminating the contract by way of a written cancellation within 14 days of signing the agreement (consumers are recommended to make demands for a full refund from the seller before contacting your card company).
you make your claim for the return within 60 days (120 days for VISA) of signing.
When writing to the card issuer, briefly explain the facts, enclosing
a copy (not original) of the Purchase Agreement
a copy of the cancellation letter
a copy of the proof of posting of the cancellation letter asking them to “chargeback” the money paid.
As with all companies/banks, some card companies/banks are more helpful than others. If your card company denies responsibility, inform them they have an obligation to claw back and, if they fail to do so then write to the Financial Ombudsman Service (FOS) asking them to resolve the dispute. (The credit card company is obliged to tell you how to contact the FOS). Contacting the ombudsman and asking them to deal with your complaint is free.
As with most disputes, persistence may be needed! Generally speaking, people who refuse to take “No” for an answer often succeed at the second or third attempt. Your local Citizens Advice Bureau may be able to help you write the claim letter. That said, at present, the Citizens Advice Bureau is somewhat over stretched and at all times, you should keep your eye on the timescales so as not to prejudice your position.
Noteworthy is that recovering your money does not ‘cancel your contract’ and the seller may have the right to take you to court.
If you have discharged payment by Bank Transfer, Cheque; PayPal, Ukash, Western Union, Money Gram, cash etc. there is little chance of getting any money back.
3b. Under the Consumer Credit Act 1974
If you have paid the full amount claimed on the agreement, and chosen to pay by personal credit card issued in the UK or with a ‘linked”‘loan, you enjoy rights under Section 75 of the Consumer Credit Act 1974.
3c. From the seller
When considering claiming a repayment directly from the seller, any consumer has to appreciate it is the sellers job to sell its products and when it has completed its task and has received what it believes is its payment, the seller will generally fight considerably harder. In the scenarios of the finance Companies and banks, they will consider matters on a risk basis, however, this train of thought generally is not operated by sellers who dig their heels in. This being so, the consumer is advised to use all aspects of patience as the procedure for obtaining a refund will be longer.
4. General advice
Consider only paying any money to a solicitor who has your interests at heart.
If you have terminated your agreement, avoid contact with any marketing company. Ensure, that if you are speaking to the timeshare operator, you point out that any and all discussions are on a ‘without prejudice’ basis so as not to weaken your position.
If you are persistently pestered on the telephone, you are advised to obtain the persons email address and the company they represent and write to them explaining you consider their methods harassment and if they do not cease in their activities, you will report them to the Police.
If, in the event, it is too late to cancel the agreement and you have not paid by credit card, it will always be beneficial to consider renegotiating for a reduced service or perhaps forgoing a cash back scheme.
If it is your choice to make further payments so as to maintain the status quo, ensure that all future payments are made by credit card as it will provide security under the Consumer Credit Act 1974.
If you require help please contact us for a list of approved solicitors. If you are very concerned about the forward costs of the solicitors, consumers are advised to make contact with their home insurance providers who may assist with funds to defend any future litigation.
5. Reporting to the relevant enforcement authorities.
If, after consideration you believe you have been misled into a purchase, contact one of the government enforcement authorities as they may be able to assist you.
Particularly in the UK, Trading Standards officers are responsible for traders complying with a number of consumer laws including the Timeshare Mis-Selling Regulations, the Consumer Protection Regulations, the Advertising Regulations (which also cover “oral” advertising), the “Doorstep” Regulations etc. Trading Standards offices will accept complaints about purchases made in any EU country – for handling by the Office of Fair Trading.
The UK office of the European Consumer Centres may be able to help resolve a problem. Their web site is www.ukecc.net and you can forward them a message off their web site.
You can make communications with your local Trading Standards office (the address will usually be under your Local Authority). Explain what has happened and why you think a law may have been broken. The local Trading Standards officer will contact their counterpart in the area of the trader and exact a response to your assertions.
In some circumstances, the Trading Standards Officer may consider the police should be involved. They can advise a consumer how to make a report to the police. After advice, a consumer can report what they consider to be a fraud, carried out anywhere in Europe, to your local police force.
After considering the above, and are still unsure what to do about cancelling, please complete our Help Form – we will try to give you helpful, practical advice.
Please look through the above Regulations – do we assume that points, fractional points, fractional ownership, etc. are under the umbrella of ‘long-term holiday products’?
There is no mention of points nor fractional points nor fractional ownership in the entire document.
Should you research ‘fractional points’ – we did so, on Google 11:30am 27/8/15 – the results were for ‘Diamond Resorts’ and ‘Fantasy Football’. There is a reason for these results – nobody else appears to know what the ‘right to buy points’ actually means or what value they could possibly have.
PART 2 – KEY DEFINITIONS – Long-term holiday product contracts
8. A “long-term holiday product contract” means a contract between a trader and a consumer—
(a) the main effect of which is that the consumer, for consideration, acquires the right to obtain discounts or other benefits in respect of accommodation, and
(b) which has a duration of more than one year, or contains provision allowing for the contract to be renewed or extended so that it has a duration of more than one year,
irrespective of whether the contract makes provision for the consumer to acquire other services.
PART 3 – PRE-CONTRACTUAL MATTERS – Key information
12. (4) The information must be—
(a) clear, comprehensible and accurate, and
(b) sufficient to enable the consumer to make an informed decision about whether or not to enter into the contract.
The information must be sufficient. Sufficient means ‘adequate’ – voluminous notes that are incomprehensible are not ‘sufficient’. The aim of this is for the consumer to have an understanding of what they are buying/signing for before they enter into the contract and pay. If the information is so lengthy, the language esoteric and complex then the consumer may not be able to comprehend the agreement they are entering into. This is clearly unfair. The Regulations are intended to safeguard the consumer in this respect.
Requesting the consumer to sign a two page ‘tick list’ (sometimes after signing their contract) that states they clearly understood all parts of the contract they are about to enter into may not be robust.
For example, Grand Vacation Company Limited has: a 52 page legal documentation which in turn has 54 of their own ‘definitions’ (these ‘definitions’ are given with the caveat ‘unless the context otherwise requires’), 13 definitions are references to ‘Points’ – the system they have effectively just ‘made up’. What are points ‘rights’ – the right to buy points? It is worth spending a little more time on to see what actually is behind the documents being signed:
“Accommodation Assets, Accommodation Unit, Act, Aggregate Management Costs, Applicant, Articles, Authorised Person, Board, Bonus Points, Chairman, Club Suite, Club Suite Points Rights, Club Suite Service Charge, Common Facilities, Company, Final Year, the Founder Member, the Founder Member Directors, Holiday Period, Holiday Unit, Home Resort, Issuable Points, Issuable Points Rights, Management Charge, Management Company, Management Sub-contractors, Members, Members Report, Membership, Membership Certificate, Moveables, Occupancy Rights, Office, Owning Companies, Points, Points Certificate, Points Grading, Points Holding, Points Rights, Points System, Points Tables, Purchase Agreement, Remuneration Percentage, Resort, Rules and Regulations, Standard Points Rights, Title, Transfer Agreement, Trust Deed, Trustee, Unissuable Points Rights, Use Period, Use Year, Whole Unit.”
The Legal Documentation from another Resort Company was 50 pages long and in small print. These articles of association – for example – ‘allowed’ the Founder Member to remove your fixed week (paid for ) timeshare and replace it with points. Whether you agreed or not was immaterial. The consumer had no option.
Comparable to buying a decent Mercedes then having it swapped for an old banger only to be told that, in the minutiae of the Company’s Articles and Memorandum, you were a member of the club (but effectively had no voting rights in it) that ratified such a decision. On top of that you are then still expected to pay not just ad infinitum but even higher premiums.
It may be argued that to make a contract ‘non-voidable’ (by effectively unfair terms) the signatory consumer may not need to know every tiny detail in the contract. However, if those ‘details’ prevent the said consumer from voting (effectively) in the changes to their existing rights within the contract it is material the consumer understands what they are getting themselves involved with.
These are not low value, one off purchases of tangible goods. The sellers (resorts? Resort companies or Trusts?) are selling lifelong onerous contracts with maintenance fees issued at their discretion.
For example, again we use Grand Vacation Company Limited:
” “the Founder Member” means Grand Vacation Company Limited… or such other person or company as it shall transfer its Founder Membership to;”
So it potentially doesn’t mean Grand Vacation Limited? Surely, if Mr Smith or Smith Limited was the founder member then they will forever remain to be the ‘founder member’. If they resign then there is a new member who is not the ‘founder member.’ If the founder member and the person/company you made a contract with were one and the same then it may (or not?) be of significance the founder member who enjoys the voting rights/benefits can change at any time.
Their ‘Points System’ is worth looking at:
“(h) In exchange for introducing Accommodation Assets into the Company the Founder Member shall, subject to terms of the Articles, be entitled to all Issuable Points Rights arising therefrom and any Issuable Points allocated pursuant to such Issuable Points Rights. The Resort at which the Accomodation Unit which gives rise to the Points Rise is located shall be the Home Resort in respect of such Points rights. The Founder Member shall alone have the right to issue such Points Rights and such Points to existing or potential Members (conditional on their becoming Members) at such price and subject to such conditions (not inconsistent with the provisions of Article 7 or any other provisions of the Articles) as the Founder Member may determine in its sole discretion from time to time.”
So, it would appear the Founder Member can change at any time and, as per above (h), the price of the points be altered by that Founder Member. What are ‘points’ worth? Which doesn’t answer the question what are ‘points rights’ worth?
More baffling is the use multiple and complex company arrangements involving companies registered off shore in the Virgin Islands, Isle Of Man and the use of specialist trust companies to create trustees and deeds:
“Owning Companies” means the non-trading companies exclusively controlled by the Trustee which shall hold unencumbered Title to the various Accommodation Assets beneficially owned by the Company from time to time (and includes any entity being the nominee of the Trustee being exclusively controlled by the Trustee);
What Grand Vacation Company Limited means here and intends to achieve by such statements is unclear – the entire Articles are unclear and therefore not sufficient and in turn unfair it will be argued.
If consumers have to join/be member of a club in order to buy long-term holiday club membership benefits – they need to know their voting rights as a member, understand The Memorandum & Articles of Association, Deed of Trust, etc. All relevant to comply with Part 3, 12 (4) (a) and (b) of The Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010.
For the Termination of Points Products/Long-Term Holiday Product Contracts (i.e. in theory, ‘non-timeshare’) the below applies. It is clear in its intention.
PART 6 – PAYMENTS – Termination of long-term holiday product contracts
24.—(1) A consumer who is party to a regulated contract that is a long-term holiday product contract may terminate the contract in accordance with this regulation without incurring any penalty.
(2) The consumer may terminate the contract by giving notice of termination to the trader no later than 14 days after any day on which the consumer receives a request for payment of an instalment under regulation 26(4).
(3) The right to terminate the contract under this regulation does not affect any other right available to the consumer to terminate or withdraw from the contract.
(4) The reference to “instalment” in paragraph (2) does not include the first instalment.
Payment schedule: long-term holiday product contracts
26.—(1) A trader must not accept any payment in respect of a regulated contract that is a long-term holiday product contract unless the payment is made in accordance with a schedule which complies with the requirements of this regulation.
(2) The schedule must provide for all payments under the contract (including any membership fee) to be divided into yearly instalments of equal value, taking into account the duration of the contract.
(3) The schedule must be prepared by the trader and provided to the consumer.
(4) The trader must send a request for payment in writing to the consumer at least 14 days before a payment of an instalment becomes due under the schedule.
(5) A trader who contravenes paragraph (1) or (4) commits an offence.
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Last modified: March 11, 2016