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OFT secures enforcement orders against holiday club companies

RDO / Archived Articles  / OFT secures enforcement orders against holiday club companies
13 Jun 2011

OFT secures enforcement orders against holiday club companies

Personal Travel Group and Geo Demographic Market Research in breach of OFT rules
The High Court has granted the Office of Fair Trading (OFT) enforcement orders against two holiday clubs: Personal Travel Group Limited (PTG) and Geo Demographic Market Research Ltd (GDMR). The orders also apply to seven individuals, two of whom are directors of PTG and were directors of holiday club Incentive leisure Group Limited (ILG) which is currently in liquidation.

 

 

The case was opened in 2009 following referrals from a South East Regional Scambusters Team at Essex Trading Standards and the receipt of consumer complaints by OFT.

 

 

The court order prohibits the companies and individuals concerned from using sales and marketing practices that OFT considers to be misleading or otherwise unlawful when selling and marketing holiday club memberships and other holiday-based products.
Jason Freeman, Director in the OFT’s Goods and Consumer Group, said, “The enforcement orders put a stop to activities that we consider to be unlawful, and which we believe were causing serious harm to consumers. It is important that traders do not mislead consumers or exploit their fears in order to make a hard sell. In particular, these are contracts where we believe consumers should have been given cancellation rights and we are pleased that the traders have accepted that they have to give notice of such rights in accordance with the law.”

 

 

The OFT became concerned that timeshare buyers were attending presentations on the promise of being able to dispose of their timeshares, along with their annual maintenance charges, when in reality they were subjected to lengthy presentations by sales representatives who used high pressure sales pitches. As a result, buyers were being sold expensive holiday club memberships costing up to £12,000 on the premise that they would be able to claim back 95% of the monies paid through a “reclaim” scheme but sales personnel not fully explain or disclose the restrictions that applied.

 

 

The sales reps also played on buyers’ fears that their children would otherwise be liable for timeshare maintenance fees, and numerous consumers wanted to cancel their holiday club memberships but were not allowed to.

 

Interim Enforcement Orders – Personal Travel Group and Geo Demographic Market Research
Interim enforcement orders were obtained against Personal Travel Group Limited (PTG), Geo Demographic Market Research Limited (GDMR) and two individuals who are directors of PTG and were directors of Incentive Leisure Group Limited (ILG). (ILG is no longer trading and is in liquidation in Gibraltar)

 

 

Final Enforcement Orders
 

Final enforcement orders were obtained against five individuals associated with PTG and GDMR, one of whom was also a former director of Incentive Leisure Group.

 

 

The parties above are now prohibited from engaging in misleading sales practices when dealing with consumers who wish to sell their timeshares, and must give consumers cancellation rights in certain circumstances.

 

 

Statements on the OFT website say:
 

“The orders follow the launch of High Court proceedings by the OFT in December 2010 against these companies and individuals for their involvement in activities which the OFT believes breach consumer protection law. The interim enforcement orders against PTG, GDMR and the individuals concerned will last until there is a final hearing of the OFT’s court action. A date for the final hearing has not yet been set. The final enforcement orders conclude the OFT’s action against the individuals concerned.

 

 

No interim enforcement order was sought against ILG as it is not trading and is in liquidation in Gibraltar. However, the OFT is monitoring the progress of the liquidation and intends to continue its action through the High Court against the company.”

 

 

The content of the orders was agreed by the companies, the individuals and the OFT, and approved by the Court.

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